reprimand. watched house coverage on c- span. and coming up this hour, an update on the national deficit commission's recommendations with congressman xavier becerra, who serves on the panel. then congressman kevin brady on expiring bush tax cuts and the debt commission report. later, robert atkinson of the information technology and innovation foundation discusses new technology and the economy. from the nation's capital, this is "washington journal." >> i do know there is no turning back now. the era of debts denial and consequences are over. each of you, i think, can take enormous pride in that. together i think we have started an adult conversation that will dominate the debate.

until the elected leadership here in washington does something real. >> the denizens of darkness. i think the workers of the dark arts, and the words of harry potter. those are the groups waiting out there in the temples around the city to shred his baby to bits. and they are ready. they have been waiting for a long time to to this one to pieces. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] host: erskine bowles and alan simpson, of president obama's deficit commission. do you think the commission is off to a good start? here are the numbers to call -- good morning on this thursday,

december 2. the deficit commission will vote tomorrow on the plan. it needs the support of 14 members before it can go to congress. let us take a look at some of the latest news reported from "the wall street journal." this story -- "deficit plan wins backers." the piece begins -- are question for you is, is the deficit commission off to a good start? to get a better sense of what is

actually in the final plan, unveiled just this week's, let us go to "the wall street journal" where they detail the commission's proposals and what the elements are. increase the gas tax to 15 cents a gallon, freeze pay for federal workers, a lemonade in school interest subsidies in federal student loan programs, shifting to five day delivery, cut congressional and white house budget by 15%, eliminate all congressional earmarks, and change the medicare physician payment formula to reward quality instead of quantity. there are also other proposals involving taxes. changing the brackets. and then deductions, the way to deal with them would be that itemized deductions are eliminated so all individuals take the standard deductions instead. capital gains would be taxed at ordinary income rates.

when it comes to mortgage interest deduction, 12% non- refundable tax credit, no credit for mortgages above half a million dollars. no credit for interest from second residence and equity. when it comes to charitable giving comment instead, there would be 12% non refundable tax credit. available above 2% of adjusted gross income floor. consolidate retirement accounts -- accounts, pat tax-deferred contributions to lower of $20,000 or 20% of income. when it comes to income -- employer provided of insurance, exclusion capped at 75th percentile of premium levels in 2014 and phased out by 2030 -- 2038. excise tax reduced to 12%. corporate tax rate, one bracket at 28%. our question for you is, do you think the commission is also a good start? let us hear from william on our democrats' line from kentucky.

>> good -- caller: good morning. how are you this morning? ok, the balance of trade act -- i remember this because i am 78 years old now. they repealed back right after the second world war. why don't they reenact the balance of trade act and quit buying more than they sell. host: let us go to baltimore, maryland. kevin, independent line. good morning, you are on. caller: as far as whether or not the debt commission is off to a good start, i really do not think they are. what they are trying to do is patch together a system that, as time goes on, is shown to be more and more effective with our current tax structure and the way government spends money. if they really wanted to make a difference, if they really wanted to fix things, the first

place they would start would be tax reform because when you have a tax code that is so large and so convoluted and complicated, that even the guys who write it don't understand it, that should tell you something right there. host: there is a call to simplify the tax structure, that is part of it. that would be involved. have you gotten a chance to look at those details yet? caller: actually, i have. the two things i looked at the most are the fairfax plant and actually going to a national sales tax. i've got a lot of friends who are very conservative, very liberal, and the biggest objection that they have to either the fair tax, flat tax or national sales tax, is they believe it is going to inappropriately affect lower

income earners. if you attack a national sales tax on everything in the country and then people who are living hand to mouth, low-wage people, they will not -- the buying power. host: let us look at this from "the washington post." they bracket out various aspects of the plan. looking at the presidential bipartisan deficit commission and what it would do. when it comes to taxes, $960 billion -- it wipes out all tax expenditures, including the tax- free treatment employer-paid health insurance and mortgage interest deduction. lores top tax rate to 23% from 35 percent for individuals and to 26% for corporations. let us go to illinois. mike, republican.

caller: i think it is a funny, you ask people to comment on what the deficit commission did, good, bad, indifferent, and i did not think anybody is addressing their points yet. what you ticked off, about the only thing i would have issue with is raising the federal gas tax. and reason being, it disproportionately affects those at lower income levels. i am up about 80 grand a year, so another 15 cents a gallon, no big deal. the mortgage tax deduction, the levels you are talking about there, i guess what i don't know from historical standpoint and what i don't remember is we have so many members of this commission that are going to vote for it -- how does it compare to years past?

thank you for c-span. host: here in "the wall street journal" david russell writes about a big hurdles to jump to keep the plan from being dead on arrival. let us go to mexico on our democrats' line. caller: good morning. i think they are off to a great start, from their point of view, because they managed to be taken seriously and have avoided talking about some very big problems which are very expensive, such as two wars. two wars are not minor things that should be forgotten. they cost billions of dollars a month. and as long as we process cake -- prosecute these two wars, that have gone on longer than world war ii, they have to be paid for.

they also managed to come up with proposals to tax the impoverished majority of the people. the top 5% in the economic bracket in america now owns about 25% of the wealth. we have seen it david stockman, reagan's finance adviser, in the media, mentioning that from 1985 until 2007, top 5% of the country increased its net 12 from $8 trillion to $40 trillion. and they are not in this package. the most objectionable thing is the notion intimate people who are 65 go on working until they are 68 or 69 until they receive social security.

host: let us touch on a couple of things he mentioned. when it comes to spending cuts in defense, the commission calls for cutting spending by 1% a year through 2015 and then allows it to grow with the rate of inflation. reducing weapons systems, reform compensation, and apply overhead savings identified by it -- by the defense department. jumping into social security, he mentioned changing the retirement age. it would raise it to 69 by 2075, reduce his debts of benefits for the top 50% of earners -- owners and a less generous measure of inflation for the cola and raises the cap on payroll taxes, currently set at $106,000, to cover 90% of wages by 2020, which would look like $180,000 and raises the minimum benefit for poorest recipients and bombs up payments to the oldest recipients. a bill in washington, d.c. it on the independent line. caller: the thing i was most

impressed with what the debt commission came up with, they were in favor of closing about 130 out of the 780 military bases -- military bases the u.s. has around the world and that is a radical proposal to propose that, or even acknowledge that we have that many bases. icing what they really need to do is the federal government should -- i think what they really need to do is the federal government should stop policy that is so stupid that it causes us to spend more money because of what the policies cost. for example, the two wars in the middle east, dropping bombs on countries in the middle east and then we have to -- and building air force bases. and then we have to have a department of homeland security to defend ourselves when the people over there retaliate against the policies. drug prohibition. then we have to spend $70 billion a year at the dea, half

a trillion in prison. maybe they need to really open up their minds and look at it things -- a few things like that. host: i want to touch on some elements you mentioned. this comes from "usa today." their editorial page has this piece. don't spare the pentagon -- and here is what "usa today" recommends --

they would like to see some change. as a response peace, they have an editorial -- "defense cuts a non starter." he says -- let's go to new york where steven joins us. a republican. caller: good morning. how are you? host: what do you think about the recommendations? off to a good start? caller: as a new yorker, union

construction worker, i saw no reform. we all heard about the stimulus package that didn't go anywhere. we never saw a dollar. i don't think that our children -- i am a 40-year-old man. i don't see my daughter buying a house in her lifetime if things don't get better. she is in her second year of college in and i believe the school, columbia, and i worked so hard to get her there that it has come to the point where it is so expensive to live in new york city that as a tradesman and a craftsman, i can't live here anymore. host: all right. let us take a look at comments that senator richard durbin has made about the deficit commission's work. >> we believe that any crisis american face -- america faces will require shared sacrifice but the most vulnerable in our country cannot sacrifice the same as those who are physically and economically figure and in better shape to do so.

and that is the standard i use as a progressive. i believe we have to look at the bottom line and see where the most vulnerable in america, the elderly, the poor, children, how they fare under this. and we have to do everything in our power to protect them at the expense of the rest of us. and that is why some of the debates over taxes leave me struggling to understand. host: senator dick durbin talk about the debt commission recommendations. what are struggling with is how to vote tomorrow. they will take a vote and way and whether or not this should be advanced to congress. bonnie on the democrats' line. caller: good morning. the same old, same old. of the ones that are expected to make sacrifices are the ones who have been making the sacrifices the last 30 years. anyone who works for a paycheck. the fact they even of struck

social security i find obscene and absurd because it has nothing to do with the deficit. after 30 years of watching the master plan of the two santa claus theory being played out and seeing my country -- and all working people and the country suffered because of its, you know, the democrats for 40 years have been giving all the people of this stuff that they want like social security so that the elderly don't start from now on attrition or died from exposure and have some amount of dignity in their declining years. unions that gave us a safe workplaces and a living wage. that was no good -- was given to us -- medicare, and all the other social safety nets was something that the right found obscene and they thought about when they got into office they would cut taxes and create huge

deficits and say deficits don't matter until they were out of power and all of a sudden they did. we are going through the same thing now. a 26% corporate tax, well, that would work maybe if they eliminated it every one of the loopholes but the fact is the corporations, the largest ones, are paying absolutely nothing and getting tax subsidies. host: let me take a look at, its representative jan -- house be made yesterday because it up with something you work mentioning, how this would affect the elderly. >> the elderly, who i have said before, have an average income, including everything -- private pensions and investments and savings of $18,000 a year, to say that we are going to reduce our deficit and our debt by asking medicare beneficiaries to pay more for their health care,

i think, is absolutely unconscionable to have more money, out of the already 30% of their out-of-pocket income going to health care costs i think is absolutely the wrong way to go when we do have other options. host: the liberal democrat from illinois signalled she will vote against that plan. let us take a look at reporting from "the hill."

we got a comment from jimmy on twitter. let's hear from steve, republican from maryland. caller: i watched the and top -- entire program on c-span 3 and comments were made by the debt commission members that there were no other plans that they saw that were viable to address the issues. that simply is not true. there has been a program out there, h. r. 25, the fair tax act, that essentially eliminates any payroll tax, income tax, corporate tax, capital gains tax. every american would receive their entire paid tax -- paycheck and we would go to a national consumption tax. our government needs to stop taxing our productivity. and with a zero corporate tax and capital gains tax, companies from around the world would come

here and provide opportunities for americans to work. that is who would get the jobs. this would be the greatest boom in the history of the united states. they don't want to look at it. if people would just go to faritax.org and see exactly what this program is and support. everything yesterday addressed by the debt commission could be solved by one piece of legislation that was 131 pages long. host: let us go to a piece from "usa today." richard wolff reports that the most immediate sacrifices may be political.

let's go to kentucky. john, democrats' line. caller: how are you doing? host: good, john. the things they are off to a good start? caller: no, i don't. i am just a little worker making $18,000 a year. they set up there and want to get the middle-class people all the time for everything. all the pushing and shoving over the taxes for the upper millionaires and billionaires, one to give them the brakes and the cuts while at -- so they can get richer and the poor are

getting poorer. we are not making it. i don't know what the train of thought is. i think the senate and congress should be the first to say we cut our pay a little bit, let us cut back a little bit, let us cut back on our spending and give up some of our insurance. but they are not willing to do this, the middle-class people, just for about themselves. host: doug writes that the elderly have had their whole lives to save up for retirement. offering a difference perspective -- a different perspective. "the wall street journal" editorial-page at a piece called "moment of decision."

that is the opinion from the editorial page of "the washington post." independent line. good morning, diane. caller: thank you britta akamai call. this is my first time. host: thank you for calling in. caller: i enjoy your show. thank you. i did not agree with the debt commission because why should of the american people, the middle class before, asked to pay and sacrifice more for their mistakes, the republicans and democrats. we have sacrificed left and right, tie-ins are built, how about them? i agree but the last caller, and they should start tightening their belts and they should lead in taking a cut. host: let us go to lou, republican, topeka, kansas.

caller: all of us can argue one way or the other about most of the things he presented. i want to throw another one in. and that is, that we have, in my opinion, too many federal holidays. we have at least one a month, two in november, february, and every federal employee gets a day off with pay. many were contracts people have in the private world have federal government holidays tads to its. if we have those people who get paid for working and don't work, that means they have to come back the next day and do the work. my thinking is that we eliminate half of those federal government

holidays, we would save quite a bit of money. i don't know how much, but we do have 2 million, i heard the other day, federal government employees. host: out democratic caller from richmond, virginia. caller: good morning. i hope that you can hear me. host: we can hear you, go ahead. caller: german like four callers mentioned the drug -- and gentlemen, four callers ago mention the drugs, we spend so much, it is ridiculous. it is ludicrous. there are so many other places to cut money and and what they recommended, that i don't consider this a serious proposal. i just want to add one more thing, it has nothing to do with this. if we are required to buy car insurance in order to drive and i do not see the difference is requiring us to buy health insurance to make everybody --

that is why we have car insurance, so everybody can benefit. so the whole thing is not serious and it totally in jenny was. thank you. host: let's talk about other news in politics right now. later on today, c-span will bring you live the censure vote of congressman charlie rangel, democrat from new york. we don't have a specific time nailed down, but we will be bringing that to you here on c- span live. also in the news and politics, gop senators pressed democrats to tackle spending bill and tax cuts. this comes to us from "the washington times."

and we will be talking to members of congress later on in "washington journal" about this vote and the work the deficit commission is doing. we will be talking with xavier becerra, who is on the debt commission, and also congressman kevin brady of texas who will talk about taxes and his take on the commission's work so far. as we look at some other politicians from "the washington post," -- chaplin's reveals strong but divergent views on the gay ban.

that comes to us from "the washington post." senator john ensign says the justice department does not plan to charge him. let's get back to you and your comments about the debt

commission recommendations. don in illinois. do you think they are off to a good start? caller: i think your viewers are very well informed and have intelligent ideas. it passed a law in 1964 that could divert funds from social security and they have done it just about every year since. if you work for the government, you should have a 1% to 5% graduated income tax on $50,000 of income and make them pay back because the average federal employee makes the $120,000 a year and a private sector makes a $60,000 a year. it is disproportionate. about 20 years ago there were more government workers than manufacturing jobs in this country. start looking at the real problem. don't keep taxing and cutting benefits. and if they do not like it, did not want to take a pay cut, tell them to quit a job -- their job and go work in the private sector.

host: henry, republican. caller: talking about the tax cuts. they need to cut -- house of representatives and congressman need to cut their pay check. host: if you saw them do that, would you agree to take cut yourself whether it comes in the form of social security, medicare, either taxes? caller: no cutting social security because i am on social security. host: you don't think you can handle cutting back? caller: no, they need to cut their pay checks and get some of their jobs back. host: ron, democrat, is houston. caller: first-time caller. i am a little nervous. caller: take your time. caller: i don't agree with the tax cuts basically because -- or

the cuts, rather, in social security and so forth, because the problem that we are suffering from started back in the 1980's, and that was the middle-class started to disappear. and all of our steel mills were closed, factories started to close. the middle-class has been struggling ever since. the people who had money found that it was much easier to invest and use that money to make money rather than the make the 2% to 3% they've made by running the business. it is really difficult to run the business -- having to deal with employees and union and everything. what has happened -- people do not realize that the people with money, they are the ones that are lazy. it is not the workers and the unemployed. they are not the lazy people

trying to -- it has been an attack on the middle-class. and these middle-class republicans are being duped, just like enron was the tip of the iceberg, workers were leaving the building with boxes in their hands. it culminated with the u.s. economy finding itself the same way as the middle-class. they spend millions in this election to keep playing this money game and not to go back to work. they build of these big houses to live in anstead of businesses to work. it is a job working, even when you are running a business. i ran one for 20 years. . this is really, really ridiculous. unable not create any jobs. those who have money, they will not put it back to work to create jobs. they want to play with that money, just like we would a

little money due. they are not going to work. it takes workers. who is lazy are the people with money. host: let us check into twitter -- let us hear comments from congressman paul ryan from wisconsin. >> my primary concern with this plan is health care. i do not believe that is sufficiently fixes the healthcare problem. guess what? our debt problem is the health- care problem. giglio just gave us a new member -- no. a weaker two ago sank $88.60 trillion unfunded liability primarily stemming from the federal -- health-care programs. this does not see -- sufficiently address this. i think senator durbin scott wright, which are hastening the day when the only option is the

public option. i think this advance is a possibility and likelihood. that is one of the reasons why i had a problem with it. let us go to dallas, texas. pat. caller: i agree with all of the past callers. as far as social security is concerned, the trust fund is solvent until 2037 and what they have done with both the trust funds, medicare and social security, as they borrowed our payroll taxes that have been taken out of everyone's payroll, and spend our money. congress and past presidents. and then what they have done, is a day -- u.s. treasury bonds to secure the debt and they what ought to be thought the debt they owe to us, the people, and saying it is the social security and medicare's fault. it is not our fault.

it is a ponzi scheme they created, just like they put bernie madoff in jail for. it is not social security or medicare's fault. host: let us take a look in "the wall street journal" -- "the washington times" talk a little bit about changes also security but here are details. it would increase social security retirement age. key recommendations by this commission. in virginia, steve is a republican member. you are on. what do you think about the debt commission's recommendations? are they off to a good start?

caller: the thing i want to comment about i used to gross $3.50 -- it three and a half million dollars a year. i got shorted on a contract for $350,000 and after paying a million dollars a year for 20 years, the irs came in and shut my business down and threw 35 families out on the street with no support whatsoever. so, these people do not realize that if you tax the earners, you will have nothing. ealth butx the w nancy pelosi and george soros, you would get the money. but the big thing is cut to the government down to a world war ii levels -- h from we will talk more about those tax proposals and what to do about the bush era tax cuts later in the program. but for now, do you have thoughts on the deficit commission? caller: the deficit commission

is a good start, but unfortunately, missing the problem is the spending. we've got to cut this spending. and this health-care thing is a boondoggle, an excuse to kill old people, and that is all it is. host: let us go to wichita, kansas. rita, democratic caller. caller: good morning. i am currently disabled, the parent of two handicapped children, and i have dealt with this for quite some time. we fought for my mentally handicapped son in the state of oklahoma. we were part of a major lawsuit that affected every state that we live close to. when it comes to benefits, the

poor are usually the last one to see any major changes for the good. i question how this nation could have placed us in two different wars on completely different fronts. we are not protecting our own nation. and yet we continue to do so. how much money do we have to defend other nations when we are leaving ourselves why it open because of the expanse area our nation covers -- we left ourselves so susceptible to any kind of invasion. necessary natthe -- manpower to protect ourselves. and yet we committed ourselves to spending billions of dollars to protect others. host: thank you for your call. let us go on to this comment

from senator crapo about his concerns. >> it struck me as i was thinking about it that in most -- in most of those areas, my concerns are what is not in the plan as opposed to what is in the plan. not all of them, but some of them. in fact, most of them. i think it was david anstead -- who said he thought the plan of to go further. and frankly, on the spending side, i think it should. it doesn't go far enough to get us where we need to get. and we need to have a more robust effort to address the spending issues. ronaldow let's hear from from california. hi. do you think of that commission is off to a good start? caller: say again? host: do you think the deficit commission is off to a good start? caller: no.

host: why not? caller: the basic premise is goes back to adam-and-eve -- we separate church and state and we'd take prayer out of schools and school becomes more like juvenile delinquents and crime. god had to destroy all of them through the flood. man today ignores got a's warning. host: all right. let us look at some other news. from "the washington post," this is from the op-ed page. secretary of state's from past presidents are weighing in on the new start treaty. they were right -- -- they write --

this comes on the heels of president obama's meeting with former secretary powell talking about the new start treaty. president obama trying to rally support for that. also adding their voices to the call to move forward is ed meese, also richard perle. they have a piece in "the wall street journal" talking about their take on the new start treaty. they talk about what president reagan would have done should this moment has -- had been there during his era. they say --

so, the start treaty and whether or not it can advance or go anywhere in this lame duck session is one of the questions congress is facing. let's go to ann, a republican in florida. what the think about the deficit commission? caller: how are you? the part of the question that says good start with a question mark, after hearing you read the article this morning regarding voting or choosing to remain silent and not saying any comment so that when the vote was going to be taken, for reasons they did that, it would

be silent -- it would be more clear to the debt commission what they needed to do when they do take the vote. first of all, did the article say when the vote was going to be taken? host: on friday, that is when the commission will decide on their take and if they get enough votes it can advance to congress. host: they decided they are going to vote when? host: friday is when the commission votes. we don't know when or if the full congress would get to vote. it depends on what happens friday. caller: my funny comment. i am in my 50's and i am still a republican and i have been watching "the journal" for years. there are some money problems out here away from washington so i do not want to waste your time. just letting brian lamb know he will probably have to work a few years longer.

host: good morning. caller: the debt commission, recommendations, i feel that most of what they're talking about is not a good idea. they want to drop the tax rate for the overseas u.s.-based multinational corporations to 28%. they are just giving them more money to take our jobs overseas. yesterday there was big talk about unemployment insurance. that needs to be stopped. there are people who stay in their homes and they say, well, i don't make as much money -- they need to get out. they need to try to do -- when i

was unemployed back in the early 1980's, i had a handful -- i went from company to company. my wife dropped me off. i went to different companies, tried to get hired. now, this goes across the board. the welfare state is absolutely -- you have young women who are having children in their mid 20's, having three, four, five children. now, i know this first hand because my wife is a labor and delivery -- delivery nurse. a multiple fathers. this has got to stop. every child these young ladies have, they get a checkup for them. host: let us leave it there. i want to take a look at another story in the news right now, continued fallout from the wikileaks document dropped earlier this week that showed these cables sent between u.s.

diplomats. this piece in "the new york times" today. in other news along the lines of the wikileaks situation, this piece in "the new york times" -- as far as how the rest of the world is reacting to the information wikileaks put out,

"the washington post" reported that the parts of the world where the leaks have greatest potential, there has barely been a rebel. -- ripple. let's get back to the debts commission. we will be tackling that momentarily and again in the show. congressman charlie rangel faces a censure vote today before the house. and c-span will be bringing it to you live right here on c-span 1. coming up next, we will talk to representative xavier becerra

about the deficit commission and other issues facing congress. we will be right back. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> if i had to put my money on a likely outcome, it would be that peace in iraq -- and it might be a very harsh peace -- is likely ultimately be imposed once again by autocracy. we just have to hope that if that does happen, that the new

ruler, the new dictator, will be a lot more benign than it was saddam hussein. it >> two-time pulitzer prize winner and a longtime foreign correspondent for "the new york times" on the future of iraq, sunday night on c-span's "q&a." >> the pentagon released its report on impact and ending " don't ask, don't tell." look at the history of "don't ask, don't tell" online at the c-span video library. search programs outlined the debate and arguments for and against. >> salman rush -- salman rushdie is in a of an " in-depth." he will discuss his lesser-known nonfiction works. join the three-hour conversation sunday at noon eastern on c- span2 and watched previous programs at booktv.org, where

you can find the entire weekend schedule. >> "washington journal" continues. host: xavier becerra, democrat of california, also a member of the deficit commission. your initial take away from the commission's recommendations thus far? guest: i think they set the ground for us to have something in the congress to discuss. there are things all of us can disagree with but did greatest thing is the chair's put out what some of the problems are. i did not think they targeted as well in their proposals as they could have but they did a darn good job bringing up all the sacred cows. host: the wall street journal quoted you as saying "you put taboos and the table, a sacred cows and your plan, if nothing else we laid before the american public a template to start discussing." how productive is it? discussing is one thing but taking action is another. guest: remember, it is very difficult if you represent a farming community or an urban community, that you've got to

protect the interests of those particular communities if he got elected by those folks. sometimes it is very difficult for members to put aside those interests that have and the district when it comes time to vote for the entire nation. we see a fiscal mess that affects all of us. we've got to put aside our particular interest and let the special interests stay outside the door and then try to come up with a solution. the chair has tried to put forward a proposal that tries to do that. i think it misses the mark a little bit but it sure gives us something to work with. host: best item? jiggle like a said, there are some taboos. we talk about cutting spending. few people talk about that the largest spending we do is in the tax code. we give a far more tax giveaways and cuts to people probably we would not say deserve it, then we do to giving money to a program, a farm subsidy program or through a housing program or education program. but that is a secret that is little discussed. as well as the fact that most of

the money we spend, or what people think of it in terms of the federal operating budget, comes out of the department of defense. the department of defense, if we ask them, please account for all the money, cannot do it. we could not audit the department of defense today if we tried because their house is in its fiscal mess. today they cannot tell you how many contractors that have employed at the department of defense. they cannot tell you how much it costs to add to operate certain programs. and yet, they have to make sure that our troops are the best equipped and trained in the world. host: biggest problems? guest: in the report or just -- host: in the report. guest: they missed the mark in who caused this gomez. for the last decade, some folks got to party and now that the party is over, they don't want to clean up their mess. they want to ask the american public -- middle -- middle-class

and working america. i did not think the american public should find that social security benefits are cut or programs that help our kids afford college are cut, or take a textbook away from a child in school, because we can't account for all of the costs in iraq and afghanistan or because we can't -- we spent a decade giving millionaires out hundred thousand dollars in tax cut and would give the middle-class -- we spent the 10-years giving middle-class about $500 a year in a tax cut. i hope that what we will do is target those folks who partied to clean up of the mess. i believe that the report pointed when it came to targeting -- punted when it came to targeting the pain to those who got to whoop it up for 10 years. host: xavier becerra sitting of the deficit commission did 18 members, 14 yes votes are needed to advance this. the seven or so said they

supported. when congresswoman says she is against it. where are you? guest: i would like to be for it because, as you said, it puts forward something that puts all of these items on the table. but i am not interested in having them say we needed to cut spending, so we will cut schools, we will cut meals on wheels for seniors. because we spent over $1 trillion in iraq and afghanistan. i say, those folks who believe it was one of going to iraq and afghanistan should say how we are going to, after would cover the training and equipping of our troops, that we have to do, how they are going to make cuts for having to spend so much money in places -- quick point. let me ask you this. how much would you pay for -- a refrigerator? a lot of us have to pay for a refrigerator? what we do pat? host: our audience can answer that. host: what would you think one

cost. host: i honestly have no idea. guest: what about coffee maker? $40 for a coffee table. a hamburger? host: i am inherited my grandfather, $10? guest: toilet. department of defense -- the coffee maker, how much did they pay for the coffee maker? $7,600. the hammer? $435. toilet seat? $640. we did not know that until we started asking questions. department of defense but not tally its books, and as a result we cannot all did that but we do know on top of training our troops to be the best in the world -- and we do, we trained and well and we did put them well. we also do a lot of very wasteful spending. so, where it takes us about

$17,000 to equip our soldiers in iraq and afghanistan, the vests, the weapons -- which could have it put its two soldiers for the coast of that one refrigerator that was put on that aircraft. that is where i think we need to make the cut. get rid of the $32,000 refrigerator. it did not cut taxes put -- textbooks and the schools or meals on wheels. host: you said you would like to vote yes, but it sure sounds like you are a no. guest: if i did not see the commission is set -- chair saying we identified the sacred cows, but we are not going to deal with them, it is tough for me to say i will vote for them because i know what it means. if i sign off on something that means heavy cuts on middle-class families, i am reducing the affordability of college for my kids and their kids. i am telling the senior who

today who is on a fixed income and relies principally on social security that they will not be able to go to the senior center because it may have to close. or because they no longer can offer the subsidized lunches that seniors get. a lot in my district do a lot of things to remain independent adults because of the availability of the senior centers. do i want to tell they will get cut because we cannot account for the cost of a $32,000 refrigerator? host: is there room for negotiation? how much movement can happen question on guest: no reason why there can't be movement. what the chairs of the commission presented is simply their proposal. there are 18 of us. but the chairs have done as a great favor. where 18 of us might not have been able to come up with something, the two dead and now it is up to us -- each and everyone of us has an obligation to say, if i can vote for this, what can i vote for? the beccerra rule, if you don't like this, replace it for

something else. it, is go to tucson, arizona, where deemed joins us on the republican line. caller: good morning. hello? host: you are on. caller: tell me if i am wrong. i don't understand why the government can do their own budget. i am on social security. i make $1,105 a month. i have a couple of programs that i and in, and one of them is -- the one they want to cut, the advantage program with the health care thing when they passed it. which supplements a lot of my health care. i paid $2 for prescriptions. the government spends billions and billions of dollars to other countries to keep them in check or to help them out and do all of these other things. one of the things they do is, like in the south american countries -- mexico and places like that, sending billions of

dollars to fight the drug wars and yet we can't protect our own borders. we should just got -- stop sending it to give them the money, their problem, and now our problem is the borders to keep them from getting in. people are on unemployment -- i've had friends on unemployment, third or fourth extension. they are not looking for work. put them in a wpa program like the depression. let them work for the unemployment checks. i think that would be sensible. all this federal government jobs, guest: rethink dean is reflecting what i just said. he is living on a $1,100 a month. to some extent, he is relying on his social security check, small pension, and he is worried about what will happen to medicare.

on the issue of the government budget, not being able to account for their spending. it is not all of them. if you were to ask the department of education, show me your books, you could do that. hud, we could do it there. we cannot do it with the department of defense. they are important, because they are security, but because they are security, we are afraid to touch them. we have to make sure all of government, not just the department of education, at epa, hud can be audited, including those that are there to protect us. on the issue of medicare advantage, which has been discussed over and over, medicare is a program in which

insurance companies promise to offer to seniors but they were getting before the government got into the business of offering medicare. for the same amount or less, we can do what a doctor is providing independently. give us those seniors as clients. we will package them and offer them with the hospital together, cheaper. that is what they told us in the 1990's. that led up to $1. then it went up to $1.50. today, we are paying insurance companies more than 100% for these services. what we did in health care reform was say, you should be able to do for $1 what the hospitals and doctors to independently right now. cuts to medicare was simply to put them at par with what doctors and hospitals are ready

kent. insurance companies did not want that. they wanted 118% of what dr. scott. all we did was provide the same service for the same amount of money that the doctors and hospitals, independent of insurance companies, are doing today. host: xavier becerra represents the los angeles area of california, a member of the house democratic caucus. he is also on the ways and means committee, involved in the budget committee as well. we are talking about the debt commission and other issues facing the house. we have a question from ralph on twitter -- do you see the savings?

there would be a lot of locals. guest: we have too many jobs being outsourced to other countries, and to many countries -- companies are taking tax breaks to send those jobs overseas. one of the great things the chairs of this commission did it is they put that sacred cow on the table. we are giving corporations a tax cuts when they create jobs somewhere else. there is another issue at what it -- involved. our tax rates are much lower, but on paper, they are much higher. but because of all the tax loopholes, most corporations can lower their tax rate into the 20's. we need a simple, fair tax system. host: you feel good about that?

guest: yes, we should lower the corporate rate, but you have to get rid of some of the locals. -- loopholes. that is where you would lose a lot of money. one of the things we should be doing is taking the tax code and say, if we are going to create incentives for businesses to create jobs, those jobs should be here. that is what we should do. we should have a tax policy that invests in people and the lager talk about cutting things that are important to our seniors, children, and working-class americans. host: tony from allentown, pennsylvania. good morning. caller: i would really like to see corporation be required to have jobs provided before any

incentives are given to them. they have been getting these tax benefits. as you point out, they are paying a smaller amount than what is on paper. they have been given tax benefits and they did not provide the job, so that is one of the things that i think should be considered. for so many years, people like to put the blame on the flood of welfare, public assistance, social security, medical coverage. when you think about what happens in corporations, when people higher up are earning 400% over what they ever earned

in the past, and the people who are actually doing most of the work are earning a much less income. i would also like to see something from the federal government that they have started to cut employees. i hope that includes themselves. they are able to increase their own salaries. that is something that i would like to see stopped. guest: this is what we hear all the time when we go back home. folks are wondering, are you asking the government and private sector, corporations, to do what americans are having to do? on corporations, if tax incentives work right, they should work only after the company produces something. but you have to admit, you have

to give that company a road map on what they have to do to get that tax incentives. creating jobs here in america. they should know what it takes to create that job in america, so that they can take advantage of that tax assistance. i think what we need to do is be far more plane and transparent with how we handle the tax code. i have a chart on the tax cuts enacted by president bush in 2001 and 2003. right now, the debate is, do we extend these tax cuts, or do we allow them to expire, so we do not have to show the american people how much they really cost? these are more geared toward the wealthy. why do i say that? take a look at this chart.

each year, how much did the average american get? i broke this up into five groups, the lowest income group, up to $17,000, a second group -- you can see where you fall. or the top 1/5th of americans to make $1 million or above. you can see how much money you have gotten. this group, 104,000 and above, if you would prefer that up for -- break that up for people making $1 million or more, you would get back over $20,000 because of the bush tax cuts.

if you are an average american, you got $880. that is the difference. if we could go to the second chart -- the consequences of what we do. this is why the commission was tearing but did not go all the way. they ran the ball to the 50 yard line, but they stopped. the causes of the deficit. by the way, and these are numbers from the office of management and budget, congressional budget office, and other private sector think tanks. without all of these things add up, the deficits would be -- as you can see at the top, very small. what has caused the deficit the most? the recession of 2007 had had a

big impact. economic recovery measures, those have been enacted in the past two years to get us back to success. orange, iraq and afghanistan. we have not paid $0.10 for those wars. we are borrowing from china, essentially. and then the blue at the bottom. the bush tax cuts. that is how much they add to the deficit. why? they were never paid for, and we continue to give them. and we continue to give them, principally, to folks who are wealthy. so millionaires continue to get tax cuts and now we are proposing cutting programs that will hit middle americans,

seniors, children. do not put all of the cleanup on those who have been working hard for the past 10 years. host: xavier becerra of california is our guest. we are talking about the debt commission. based on what you said this morning, you are a no-vote unless there are changes to the commission. guest: i would have to believe that we are going to take the time but offer by the chairs, who make sure dea, who, called a little while ago, does not all of the burden. host: does this amount to a

failure, if nothing gets done? guest: think of it this way. this is the report. you can never take it back. it has identified those sacred cows. it has given us a path to get there. it may not be the best path, but it is there. i give them credit for this. i think there are better ways. we can get to the goal line in a different way for the american people. host: you can see the report, called "the moment of truth." york, terry,ew republican caller. caller: good morning. in my newspaper yesterday, there was an article talking about all the money that is spent on prisoners. it costs about $1 million a

year. 7.3 million people in our jails, prisons. 70% of those people are nonviolent drug offenders. the prohibition of alcohol, when that went into effect, the murder rate went up 17%. it stayed that high for 13 years. after they repealed the law, the murder rate went down. a past drug laws, the murder rate went up 100%. so what should be done? on the history channel, they say every police force spends about half their money on the drug wars. host: let's leave it there. guest: the public understands it much more often than the politicians. what terry is pointing out is true. every time we imprison someone, get ready.

you are basically saying, we are going to put someone away for more money than rededicate to -- than we dedicate to put someone through college. in california, we spend more money on prisons and higher education. terry has a great point. we have a lot of non-violent offenders locked up in prison, where we could probably do something to get them to rehabilitate without having them to hang out with the hard core guys, so that when they come out, they are not hardened. if you ran for congress, i would probably give you a vote. host: an opinion piece about the compromises president obama is making. it says --

he goes on to say -- guest: i think he has it on the money. i believe the president moved, in good faith, saying we have to do something about the deficit. he talked about restraining the pay of federal workers, who by the way, earn less than private- sector workers for the same type of work. it is a harsh punishment for workers who could work.

i would rather go after those who are laggard, who are negligent, instead of saying to everyone in the workforce, you are not going to get a pay raise, even though you are working hard, because we are spending money on $32,000 refrigerators. at the same time, we have to recognize something that he says which is important. to me, it is incredible to believe, that at a time when 2 million americans today will not get unemployment benefits because they have been out of work too long, at the same time, we are talking about giving the wealthiest americans tax breaks. compromise is something i'm willing to do. democrats want to protect middle-class tax breaks. republicans want to protect the wealthy. but compromise.

let's give everyone protection up to their first $250,000. so if you are middle-class or rich, your first $250,000 will not be taxed. but after that, you will be. to me, to hold the middle class hostage for tax cuts for the wealthiest of americans, it is not the way to go. host: mary from north carolina. democratic caller. caller: good morning. one of the things that i disagree with that the debt commission came out with is the tax on gasoline. that would raise the cost of living on everything we consume because we have to transport fresh vegetables and produce firmware river is grown to the

markets. -- from wherever it is grown to the markets. companies would have to charge more. also, bus services, planes, trains, everything needs gasoline. people going to work. the poorest of the poor, that have distances to drive to their construction job, that would raise their cost. they are having a hard time making ends meet now. guest: mary, i'm going to disagree with you, not because of what you said. what you said is fact. host: and let us just clarify, it would raise the gas tax by $0.15 on the gallon. guest: the commission said, let's raise the gas tax by $0.15 and use it to cover the deficit. i go back to what i said before.

somebody party for 10 years. why should you now have to pay for an increase in the cost of gasoline? i do not agree with that. if we are going to raise the gas tax, we should dedicated to transportation. we have a lot of crumbling roads, failing infrastructure. i would be willing to support an increase in the gas tax, if it is dedicated to improving our transportation system, better mass transit, but not to cover the deficit that someone else caused by being extravagant. my final point is, you are right, if you raise people's taxes, you do what i said. you are raising the taxes for middle-class americans.

but if we are putting people to work, that is good. final question, how much are you paying today in gas? how about five years ago? think about how much you have been taxed by oil companies. in some places, you are paying over $3 a gallon. the price of oil has gone down since $140, but they are still charging the same. now it is $80 of merrill for the oil companies, but they are still charging -- a barrel for the oil companies, but they are still charging you $3. host: next phone call. caller: no offense, but it sounds like a typical politician, but a good one.

three comments real quick. love to say these tax cuts will cost americans money. tax cuts do not cost us anything. it is spending that costs us money. number two, you'll feel that everyone in the country should be supported by the government one way or another. these extensions for unemployment -- if i was unemployed, i would definitely want an extension, but should and i have to pay that back? you just talked about this woman not having to pay back for those who parted. if i am not working, why should i have to pay for these massive on employment programs? give them the money, but make them pay it back, even if it is tax-free or interest-free.

that is a way to cover the programs. guest: let me try to respond to those points. tax cut to cost us money. i go back to the chart for the causes of the deficit. you can see how much push tax cuts cost us in lost revenue. when you do not have the revenue to make up for that, to pay for your other services, you have to make a decision. what do i have to cut? i understand what you are saying. that is my money, i am taxed on it. but you are part of this country. you are a patriot like i am. we have to pay for those things that defend us, keep us educated, and healthy. we have costs. if we run deficits, we have to

make up for them somehow. either you pay with more revenue, or you continue to cut. should i cut from our men and women in uniform? most of our costs are in the department of defense today, so it does cost us money. when you give money to the wealthiest of folks and you do not have the money to pay for that, then you make decisions that cost us, as a country. finally, about workers who are unemployed, we are essentially in a depression. it would have been much worse if not for the programs put in place by the government. we are in a great recession, that is why so many people are out of work. every time you look at your paycheck, there is a deduction to pay for unemployment benefits.

every once in awhile -- in this cyclical economy -- he hit a downturn where the money your employer paid for unemployment runs out. that is why we are helping to cover that. these folks were working and could not find a job. it is not fun to see someone out of work for 18 months, but that is the reality of this economy. host: xavier becerra, you sit on the ways and means committee. charlie rangel faces a censure vote in the house today. how would you like to vote? guest: i would like to vote for reprimand. even though he did not keep track of the paperwork, center, to me, is when you have done something criminal. -- censure, to me, is when you

have done something criminal. those things that he did, are wrong, but i do not believe it was intentional. i admire what he did for this country. it is sad to see it come to this point, but he will tell you, he will face up to it. he is just hoping he can be given a penalty that is commensurate to what the ethics committee found. i think you will find that congress will act. host: is it censure or nothing? guest: that is yet to be seen. charlie rangel is a good man. censure, to me, are for folks that have done really bad things. he did some sloppy things, he will admit that. does that rise to a censure?

i will have to see. host: this in "the washington post" -- they also have a breakdown of a variety of groups that benefit. did it go too far, was it necessary? guest: i voted against t.a.r.p., not because we did not have to do something to stop the hemorrhaging of the credit crisis, but i thought of the once again bailing out industries without requiring assurances that they could pay us back. how many wall street executives do you know have taken a pay cut or lost their job?

all these industries are very influential here. they come and they lobby, and they often get what they want. that is why i said, sacred cows were put on the table, which is good. these tax giveaways, earmarks, total much more than what we see in the regular budget. $1.10 trillion are given every day -- every year in tax expenditures. that is the problem. that is what we have to tackle. host: greg from north carolina. independent line. caller: i think the way to solve this is to do what huey long did. cap salaries. if you make less than $10 million a year, you may -- pay no tax. if you make more, you can pay

every penny in taxes. we could go instantly from a deficit to a surplus. guest: maybe you have cited more articulately than i did, but there were folks who have party for the last 10 years. we began this century with a record surplus, the largest the country had ever seen. president clinton left president bush the largest surplus they had ever seen. president bush left president obama record deficits as far as the eye could see. so somebody is making off like bandits. somebody party for a decade. -- partied for a decade. we need to look at these people who've made massive salaries.

we have someone on before on a fixed income. why should she have to face a cut in social security? why should your and my children have to face a cut for textbooks? host: kevin in detroit. democratic caller. caller: thank you. i am a big fan. congressman becerra, you are doing a wonderful job. charlie rangel should be reprimanded, not censured. i have a few comments about the one caller talking about prison reform, nonviolent offenders. they are on point. no offense to my congressman, but i wish he was my congressman.

i will sacrifice the rest of my time just to say this, can we count on you to respond positively? we have to do something about it. there is no reason some of these people should be locked up with rapists, pedophiles, you name it. these are people we do not want next door. no offense against homosexuals, but that is wrong in prison. you are putting non-while at people into a room -- god forbid what could happen. thank you, c-span. thank you for your time. guest: as i said, if you give the public a chance to express themselves, they would probably give a simple, straightforward solutions. at the end of the day, the

public does not want to get into this debating. they do not have special interests, so they will get to the answer in a straightforward way. if the public understood how much we spend to incarcerate people, and honestly, make them worse individuals when they get out, they would want to turn things around. i think what you are hearing -- that is what i am hearing -- pleases me. what i am hearing is, we have a country that is in trouble, but there are ways that we can solve this. i hope that people will continue to speak out. hopefully, we can find some common sense, get to the capital, and do some decent things. the commission report puts all of those sacred tables on --

sacred cows on the table. host: xavier becerra, he represents california's 31st district. thank you for being with us. coming up next, extending the bush era tax cuts, and the debate ensuing with congressman jim -- kevin brady. first, an update from c-span radio. >> if the house votes for censure today of new york democratic congressman charlie rangel, he will have to walk to the front of the chamber to receive his punishment, standing before his colleagues as nancy pelosi reads a resolution condemning his ethical behavior. the house has other options, including a decision that could decide to reprimand mr. rangel, which would not require a public reading requiring his presence. the house meets at 10:00 this morning. c-span radio will go live to the

house today when it begins consideration of actions against congressman rangel. house democrats plan to push on a vote today to permit extend tax breaks for those making to the $50,000 or less. majority leader steny hoyer says the house bill would include permanent extensions for the tax rates for the middle-class and tax breaks for married couples, the child tax credit, and the earned income tax credit. republicans argue tax cuts should be extended for everyone, including the wealthy, and are pledging to block legislative action on every issue being considered until the dispute over the bush era tax cuts is resolved, and an extension of current government funding is approved. the u.s. is scrambling to contain the fallout of the small motion leak of cables from embassies worldwide, as new documents. a jaundiced eye toward the

corruption in russia. secretary of state clinton has made calls to try to parts in other countries to mitigate the damage from wikileaks, which began releasing a quarter million diplomatic cables from the state farming on sunday. wikileaks say that the entire process could take some months to complete. those are some of the latest headlines. >> listen to landmark supreme court cases on saturday. >> these are racial statutes to perpetuate the bonds of slavery. that is not permissible state action. >> by unanimous vote, the court ended restrictions on marriage in the u.s.. listen to the argument on saturday, 6:00 eastern. find great holiday gifts for the

c-span fan in your life, at our store. from books, to mugs, umbrellas, and more. >> if i had to put my money on a likely outcome, it would be that peace in iraq -- and it might be a harsh peace -- is ultimately to be established by an autocracy. if that happens, we should hope that the new ruler, dictator, will be a lot more benign than saddam hussein. >> john burns, longtime correspondent for "the new york times" on the future of iraq. host: representative kevin brady, republican from texas, thank you for being here.

the house looks to vote on middle-class tax cuts today. democrats have called for this, how are you going to vote? guest: i am going to vote no. this is political theater. we have a $4 trillion tax bomb that is set to go off at the end of the year and congress is still playing political games. it is damaging to the economy at a time when so many people are out of work. second, what will this do for the deficit? at a time when we are extending unemployment benefits, people want to get back to work, we are burdening the consumers and small businesses most likely to create the jobs. secondly, it will not reduce the deficit. we have seen over the past two years, the democrats and the president signed seven bills totaling over $620 billion. they did not spend a dime on

deficit reduction. all of it went to expand the government. they took every dollar in the tax increase, doubled the size of government. most people understand it is a ruse to talk about the deficit. we believe extending the tax cuts for every one is better for the economy. it is better long term. at the end of the day, the only way that you can balance a budget is to control spending. host: you say all or nothing? guest: 300 economists recently wrote to congress, it is damaging to the economy. the joint tax committee, congressional budget office, has said that our growth as a country will grow about 2% if we extend all of them.

consumers, professionals, small businesses in those tax brackets -- they consume one out of every $3. small businesses, half of that income will be taxed. they are the ones that are right now most shaken by this recession, probably struggling to get in to recovery. i think we are shooting ourselves in the foot when it comes to growth. host: is a short-term extension unacceptable? guest: i think so. we want to make them permanent, but we want to look at how we can restore america, how we can continue to have the strongest economy in the world, not just until china can catch us, but the strongest economy period.

host: this week, on tuesday, the white house met with republican leadership. there was a spirit of collegiality that came out of that. do you see areas where you can compromise with the democrats during a lame-duck session? guest: i think we have extended, in tax cuts, common ground, on extending all of them. continuing temporary extension of government -- host: democrats are calling for a full passage of the omnibus. guest: that will not happen. we think we should move back to the pre-stimulus levels. host: so compromise? guest: that is tough. we have such different versions about where the country should

go. in november, i think the voters said no to more spending, no to bigger government, no to health care reform, the way it eventually passed. we are going to try to follow the will of the people. host: so not so much compromise? guest: we have common ground, if they can pay attention to the public. host: kevin brady represents texas, the eighth district. you can join in on the conversation. republicans, 202-737-0001. democrats, 202-737-0002. independents, 202-628-0205. the deficit commission recommendations we have seen so far, what do you think about them? how would you vote for an? -- it? guest: i would vote no, but i think they had some good ideas.

rather than looking at the good parts, you tend to narrow and on where you have strong beliefs against it. i think permit the funding government at an expanded lull is not the goal for the commission. accelerating and institutionalizing obamacare will drive up our deficit. back to your original question -- i like the fact that they put on the table some of the choices that we have to make to preserve social security. that is important. looking at budget reform and tax reform at the same time is important. i like these ideas, in concept. flattening our taxes, taking out the complexity and getting it back to a lower tax rate. recognizing our corporate tax rates make it uncompetitive with other companies around the

world. every agency, program, will have to do their share to get back to a balanced budget. i think most people are shocked that it will take 25 years to get us back to balance. we are so deep in the hole. i do not think people understand how deep of a whole we are in. host: next phone call, detroit. caller: i had a question, how much do you make from federal taxes? what is your salary? guest: $174,000. caller: do you know the average for a full-time worker in america? guest: about $50,000. caller: that is a pretty big difference. i am a republican and i do not agree with just giving tax cuts to the rich and giving everyone

-- leaving everyone behind. guest: that is the good thing about extending tax cuts to everyone. the bush tax cuts were so important to, not just the middle-class, but for families, seniors, small businesses, job creators. that is where we need to go in this economy. host: sylvia in charles, missouri. caller: hi. i just do not know how the republicans can sleep at night, i really do not. there are poor people and people in the middle class that are suffering out there. all you care about are the rich. host: what would you like to see the congressman do? guest: stop siding with the rich people. there are people out here who are struggling, day in and day

out. guest: i agree -- there are people struggling, but what they're looking for is a good job. what we have seen in the past few years are some terrible decisions on the economy that have driven the unemployment rate higher. we have more people out of work now in the recovery than we did during the recession. 300 passivity were workers. consumer confidence, people who now have confidence in the government will not be going back to the stores. it is lower than it was a year- and-a-half ago. the best way we can help families, young people, is to get this economy going. the way that you hurt them is to punish the job creators, those who are most likely to get us out of this recession. i guess we just have different ways of going about the same goal, which is giving one

everyone hope and opportunity. host: mary on twitter asks -- people have asked, what are the tax cuts doing that are good? guest: they have helped to spur the economy, helped to bring jobs to the united states. i know it has helped seniors by reducing capital gains and dividend taxes, helping seniors keep more of their money. a lot of them depend on that to live each month. the child tax credits have been helpful for those -- i have two boys -- we are not eligible for those, but it can help a lot of families make ends meet. state and local sales-tax deductions, college tuition, that is helpful for families tried to get their kids through school.

research and development tax credits keep good paying research jobs, here in america, rather than overseas. i think the tax relief has been hugely helpful to families, small businesses, the economy itself. trying to keep more taxes and punishment on those who are most helpful to getting our economy going is shortsighted, with so many people of of work. host: frank on the independent line. caller: i am sorry, but i cannot see how you can say the tax cuts -- and it was obama that put this into this mess, you say. when he came into office, the world was falling down. you are against the stimulus

because you are a texan. that $0.25 tax on gas would stop us from driving for leisure. it would just be from work and for necessity. they did not mention a tax on corporations and making them pay their fair share. you were probably there when payingn up the deficit, for two wars, but you were not accountable for it, we borrowed it. why not just take the oil money from iraq and put it in our pockets? host: is a $0.15 tax. guest: a lot of issues there. let's focus on the deficit. i believe congress still hold the power of the purse.

congress develops the budget. in this case, if you look at this more closely, congressional deficits, it was republicans in congress that traded the surpluses, the first four years, in a long time, and it was congressional democrats who took the reins the last two years. they exploded the deficit by almost eight times. it took a $160 billion deficit that the republicans had whittled down after the war began and got serious about cutting spending, and they exploded. now it is nine times larger than it was. in fact, the deficit under president bush for a year are now on the monthly deficits under president obama. i think you can look at the explosion in debt as coming when democrats controlled the house,

senate, and white house. the reason i appreciate the deficit commission is, -- they actually told the american public it could take a quarter century to balance the budget. that tells you just how deep of a whole we are in, what choices we will have to make to get out of it. host: "the hill" reports on the deficit commission. tom coburn indicated he might vote yes to keep the debate alive, but other republican members of the commission complained there is too little to rein in spending. what do you think about these two republicans potentially voting yes? guest: i have a great deal of respect for them, but there is no question the deficit debate will stay alive.

if that is the reason voting for it, i guarantee, republicans in the house have already said jobs and spending are our top priorities. regardless of what this commission does, there will be a very strong, i would say, weekly boats on reducing the deficit, eliminating obsolete agencies, subsidizing programs that have no value, more freeze pays, cutting our budget, cutting our pay in congress, cutting from defense, discretionary programs, and ultimately, to get that deficit under control, i appreciate them pointing out that we have to tackle entitlements. host: david. you are next. caller: what i would like to say is, before you talk about raising taxes, i would like to see congress try to do something

about all the people collecting disability that should not be. all this fraud in medicare and medicaid. it is a huge part of the budget. there is so much fraud, and i do not see any bills initiated in congress to address that. guest: you are dead on. i serve on the social security panel in the house. the amount of fraud in that system is ridiculous. not only those applying frontally, but those who are able to go back to work and are collecting benefits. there are a variety of estimates, but some say that as much as 30% of medicare is dispersed and appropriately, coded wrongly.

that was missing in the president's health care reform. that focus on driving the system, getting the best bang for your buck. it is one part of the deficit reduction strategy, but it is critical. people should know that their money is being used illegally. it will be a focus, thank you for printing it up. host: mary in lexington, massachusetts. you are on. caller: congressman brady, i wonder if you are really aware that every lie you tell can be fact checked. everything you say about who created the deficit can be fact checked. it is time for republican representatives to stop.

first of all, the tax breaks for the richest people in america, they have been in place since the bush era, i think 2001. how many jobs have been created because of those tax cuts? you keep saying you cannot do away with them because of jobs that are being created. there are desperate people who do not have jobs here. the next thing, you sit there, as a human being, and coming up on the christmas season, millions of people will be losing benefits from unemployment. these people are not people who readily said, i am going to give my job away. this horrible economy created under the bush administration caused them to lose their jobs. the regulation on wall street crashed america.

if you care so much about deficit reduction, you just said congressman make $174,000 a year. they get the best health care available. cut your benefits and salary in half and come down where most americans are and see what it feels like. host: we also had a comment from jeffrey who writes to us by e-mail -- guest: a couple of things. the 2001 jets came as the recession was moving in. the next round of tax cuts was critical, after the attack of 9/11. we lost 2 million jobs almost overnight in that attack, giving the economy -- getting the economy back on track was critical.

if you check the facts, which i love to do, those tax cuts created 54 straight months of job growth and america, something the current president is not anywhere close to replicating. again, i will just say, republicans, democrats have common ground on jobs. we've you how you get to it differently. democrats see government creating jobs, stimulus, a huge deficits. the result has been fewer jobs in the recovery than we did in the recession. after all this spending, we have more federal workers. for everyone knew federal jobs created, 13 jobs on main street have been lost. how does that translate to help for families at christmas time? right now, i cannot imagine a worse time, at a time when businesses are eager to add more

workers, eager to buy that piece of equipment or make an expansion plan, and they look at washington and they see talk of higher taxes, higher energy costs, and they are holding on their money. businesses do not have confidence they will not be punished for creating that new job. the best thing we could do, especially at christmas time, is to remove that uncertainty for small businesses and big businesses alike. if they rehire that worker, hire new workers, expand, they will not be punished for doing so. we have seen this attack on job creation in america and it is not helpful. host: carla in washington, d.c. republican line. caller: here in washington,

unfortunately we have a mind set of too many government employees. instead of dividing the world into democrats and republicans, i like to divide us into public and private sector. we have a system that is unsustainable. we have much too much government and we need to grow the private sector. i am reminded earlier this spring when the president spoke at diversity of michigan, and he kept on repeating the three phrases, government is us. these are not the words of a leader who inspires our young kids to succeed. these are the words of the a collectivist ideology. the public sector is not us. the private sector is us. our prosperity comes from the private sector. it is the private sector that creates. guest: there are some congressional districts that i would like you to run for across the country.

job creation, growth in the economy, comes from main street. it does not run through the halls of congress. it runs through kitchens, small businesses, board rooms, honestly. right now, one of my fears -- and even the deficit commission did not address it. we have bloated our government from, historic plea what has been moderate -- about 19% of our economy. now is 24%. that is going to be a huge drag on the economy, going forward, both in higher taxes required to sustain it, dollars taken away from the private sector and used in the government, just three distributed. we know from europe, for example, countries that explode the size of government have to

drag that around as they try to compete around the world. they have much slower growth rates. i would hate to think that our kids have less growth opportunity because we expanded the country to a level that we cannot pay for. host: janet writes to us from florida. she would like you to extend the tax cuts for those making up to $250,000 and would like to have them expire for higher earners. she says -- guest: i think letting them all expire would be a terrible mistake for all families and small businesses. i appreciate your offer to pay more taxes. i do not know that she understands how much more she would have to pay. this year and last, we could

double everyone's taxes in america. we would still be in a deficit. washington is spending so far beyond our means, even doubling our taxes would not get to it. you cannot tax your way back to a balanced budget, only by constraining spending, limiting the size of government, tightening our belts in washington. that is the only way we can get to a balanced budget. beyond that, we have to start whistling down the debt as well. key to that is growing the economy. the last thing you do

host: since use it on ways and means a new server with congressman rangel. he faces center today. how will you vote? guest: i will vote yes. i think ethics violations the serious and as long in nature, over years and years, require a serious response. rather than play politics with it, i think the seriousness of it requires us to look at that at the committee. here we have an equal number of immigrants and republicans whose study those violations in minute detail and have come forward with recommendations, i think, that are very reasonable for chairman rangel. i have served with chairman randall -- chairman rangel on

the committee. we have talked about taxes and finances. wille to think that today' play politics. host: but go too deep, democratic caller in detroit. , democraticto dee caller in detroit. caller: i am sitting here looking at this gentleman and trying to understand what planet he has come from. host: as your differences of opinion, you do not have to be in polite about it. but we do want to hear what you have to say. caller: if he would just listen to himself. he was asked earlier what he thinks middle-class income was. and he said $50,000. he makes $174,000.

what is wrong with this picture? you want federal employees to take a pay cut. if you want everyone to take a pay cut but you, and when i say you, i mean the whole congress. you guys need to give up at least 20% of your income and you need to pay your own insurance. how dare you say you cannot pay our insurance or offer us some kind of insurance when we are paying yours. guest: a couple of thoughts. when she said she was looking at this gentleman, i thought she might say he looks just like bruce willis, but that dream just did not come about. secondly, we are going to have to tighten our belts. in our office, the way we contribute is that we give 20% back on average of our annual budget each year. not just within our means in our

congressional office, but far below our means. i would challenge every government agency to do the same, to reduce their budget, make the hard choices, go without a lot of things, by used equipment. we do not pay our staff, who are just terrific, as well as average in the house. or even in texas. but our staff is dedicated to doing the best job and doing it as fully as possible. host: 20% pay cut, would you recommend it and pay for your own health insurance? guest: in our office we are making sacrifices and to reduce federal salaries, we ought to look at our own. if we reduced the federal work force, which i think is even more critical, we ought to reduce the congressional work force. host: you are willing to support it, but other branches have to be on board as well. guest: absolutely.

freeze,ident's pay which, by the way, i appreciate him doing it and i think the election drove him to that, but to put it into perspective this year, that pay freeze is equal to five hours of government spending. the savings from that day freeze is what we spend every five hours. it sort of put in perspective -- you know, we can whittle away besides the agency budget, entitlements -- we are going to have to do it all. host: how about congress lead by example and say, yes, we will take that 20% pay cut and we will look wherever else the budget can be cut? guest: i think the pay freeze we have already done, and then leading by example the members can cut their own budgets to achieve savings. again, if we can get every federal agency to cut their budget by 20%, we would work

ourselves out of this deficit in pretty short order host: but go to -- in pretty short order. --ler: host: let's go to host: let's go to tim in michigan. caller: the last caller from detroit, i do not think she was being impolite. guest: about bruce willis or the other thing? caller: well, you are beautiful, congressman. i will give you that. guest: thank you. [laughter] caller: i believe it was mark twain that compared money to horse manure. are you familiar with this adage? guest: remind me generally of id. caller: he said money is a lot like horse manure, if you spread it around you get flowers and vegetables and fruits, but if you get it in one big pile you

end up with a big stinky pile of wealth. that being said, a union machinist -- ina a union machinists and what are working to get anywhere from $25 to $30 per hour. this is a very simple question. as a union machinists making that, and now, say, glenn bechck, if i do the math tried o make about $15,000 per hour, and in congress, would you represent, meat or gwenn deck? -- who would you represent, me or lembeck -- glenn beck? guest: wheaton not have the luxury of picking winners and losers within our district -- we do not have the luxury of picking winners and losers within our district.

i just think it is a huge mistake to reward some and punish others we do not like. we have to focus on growth and opportunity and tightening our belts. our title this sort of simple, "-- our title is sort of simple, "rep." i represent all of the people in my district. host: here is some feedback on twitter. one of our followers as a pay freeze is well-meaning, but a pay cut means business. guest: i think moving forward on all of the agencies and trying to supports our security and make it sustainable and pulling back obama care, which will be a terrible driver of our deficit in the future, we will have to

do it all. host: berenson's in an e-mail. why not bring outsiders in just to do an analysis on an overhaul and say, here is the recommendation? guest: we have had more analyses and overhaul. if we could tax those, we might have a balanced budget. there are so many of those on the shelves. the constitution says the elected representatives have the power of the purse and are responsible for growing the economy and creating an environment where people can grow and prosper. at the end of the day it comes down to us. i will tell you that republicans spend too much when we were the majority in congress. it is why, quite frankly, we

were fired. the new republican majority knows that. we are set not to repeat that mistake. in fact, we believe the votes in november were from people who were fed up with people scratching each other's backs. that is why we lead on your marks -- earmark reform in congress. host: judy, republican in nashville. caller: good morning, c-span. and mr. brady. my suggestion would be to raise increaset you would the taxes. in other words, i think that $250,000 does cost jobs in this economy. but if you start raising the

taxes on people making $1 million, a lot of people could stomach that a lot better. one of the reasons is, i've been trying to pay attention to what the debt commission was doing. somebody made the point that they were doing -- or one of the suggestions was going to actually cause more jobs to go offshore because they would have more tax benefits in offshore jobs. whenever i make a phone call to a business, more likely than not, i get someone on the other end why cannot understand because they are usually somebody from india and the cadence that they speak with makes it hard for me and they speak quickly. i have to ask them to repeat

everything that they are saying. guest: i'm like you, judy, i have been disappointed in this congress, and frankly, the white house. they have been pushing tax increases that would have forced companies to outsource, make us less competitive abroad on the world. -- around the world. in looking at the wealthy, do they pay their fair share of his burden of government? and my answer is, they are paying more and more each day. under president clinton, the top 1% of americans earned more money. under president bush they ended up paying more taxes. in fact, the top 1% pay almost one-third of the federal government. the top 5% shoulders almost two- thirds of its share of government. that continues to grow when we grow the economy. but i think, taxing them more, we will end up with fewer jobs,

less wealth. people trying to fight their way up the economic ladder. host: would not be in support of returning to the old tax rate of people making over $1 million. guest: i would not because of history tells us what happens. under president nixon they discovered about 200 americans, very wealthy americans, paid no taxes at all. they traded a second tax code called an alternative minimum tax. if we cannot catch you on the first, we will do it on the second. it will only be for the wealthy. today, the tax on the wealthy, the alternative minimum tax, now, if congress does not act, it will reach 24 million americans. again, the tax sold as only for the wealthy could put a net on 24 million middle-class

americans. i do not trust this government when they say they will only tax a few americans. ultimately, they are always hungry for revenue. they always want to grow their government and will reach deeper and deeper and deeper into more and more families. i do not trust it. host: let's go to melissa in thkentucky, democratic collar. caller: i know you were talking about charlie rangel. i would like your opinion on -- remember the case with scooter libby, i believe that was his name. and he got away with that. how do you feel about that? guest: if i recall, he was convicted. i do not recall the details of the sentence. do you? host: he was convicted and he served time, yes.

melissa, you think there is an unequal standard being held? yeah caller: -- caller: yes. host: " would you like to see happen differently? -- what would you like to see happen differently? caller: he should be punished or demoted or something like that, but i do not think harsh punishment. if the are going to do something for one and not do something for the other, then i do not see any sense in it. guest: two thoughts. i think most people are disturbed by not paying taxes as chairman of the ways and means committee, and over a long series of years, some of which the statute of limitations has run out, that is what most people talk about. they have to pay their taxes and they know the punishment is pretty severe. the ethics committee is a little constrained to have four or five

forms of punishment for severe ethics violations. they chose to a censure. i know folks back home in my district in texas believe he should be expelled. others believe that is too harsh a punishment. again and, i think the ethics committee, equally divided among thoughtful republicans and democrats, is pretty right. host: this is a story from cnn. president bush commuted libby prison sentence. let's go to richard, independent

line in michigan. caller: hello, i would like to thank the congressman for taking my question. i have three comments about what we are talking about today. when i will let you respond and i will hang up. -- then i will let you respond and i will hang up. when i hear the republicans talking about the mandate of the people from the last election, sure, it was, but in 2008 there was also a mandate of the people. i have seen two years of republican sitting on their hands doing nothing about that mandate. also, i'm a small business person, and these tax cuts in no way affect me. i would say most people, the

vast majority, if the tax break was not extended -- guest: 10 i asked richard a question? host: i'm sorry, i just disconnected him. that is my fault, richard. guest: every third dollar that you are counting on now goes to government, you've got a problem. if that business is trying to expand and hire a new person, right now, they are not. it is hard enough to try to cut -- to predict the market. if we do not start making those investments, this economy is going to struggle at the end of

the day. host: a quick comment from twitter. guest: i would start with, one, freeze the size of government, except for military and security issues, start reducing the federal work force, start reducing every bit of discretionary funding, and then tackle retirements. so that local health care providers in the states can berber -- can design the best system. finding ways to give seniors more choices and more control over their health care while driving a fraud is important. social security, i think there are some great ideas on how to preserve that. yeah, i think that is a solid game plan. none of this is going to be overnight.

host: representative kevin brady, republican from texas, thanks for being with us. coming up, we will talk about how states are using technology to improve their economies. >> it is 9:20 a.m. in washington d.c. defense secretary gates, joint chiefs mike mullen, and the co authors backing the appeal of don't ask, don't tell, are testifying before the armed services committee. and on friday, the committee will hear from the top brass of the army, navy, air force and marines. once the services committee hearings are over, the spotlight. -- returns to senate majority leader harry reid who will decide how the issue will move forward. it is under way live on c-span3 television and c-span radio will join it in a moment.

california congresswoman under investigation by the house ethics committee tore into the committee yesterday, demanding to know why it secretly put two investigators working on her case on administrative leave on the same day it announced a postponement of the hearing. the committee's job be the chief counsel and lead attorney in this case -- deputy chief counsel and lead attorney in this case against maxine waters and another member were put on leave 10 days before the scheduled hearing. the democrat has been charged with allegedly exerting improper influence to help a bank where her husband had been a more -- board member. and as democrats and republicans begin negotiations over extending the bush era tax cuts, a new national poll shows the public remains divided on whether the wealthiest americans should continue to get those cuts. four of 10 questioned in a usa today/gallup survey released

yesterday say the cuts should be extended to all americans, with 44% saying they cost -- they support extending the brakes, but differences over whether the the work -- the lower earning americans should join the ranks. >> this weekend on c-span3's american history tv, jill, one- banks, special investigator during the watergate case. former special assistant to president ford talks about the 1976 presidential election, while mr. ford, decided to run and the effects on nixon in the outcome. and a professor on the confederacy and the years that the military peaked, 1863.

american history tv every weekend only on c-span3. >> if i had to put my money on a likely outcome it would be that peace in iran, and it might be a very harsh peace, is ultimately likely to be imposed once again by an autocracy. we just have to hope that if that does happen, the new ruler, the new dictator will be a lot more benign than was set on hossein. -- than what saddam hussein. >> john burns on the future of iraq sunday night on c-span's q&a. >> the c-span networks provide coverage of politics, public affairs, nonfiction books and history. it is all available online and social new -- social media

networks. and we take c-span on the road with our digital bus and local content vehicle, bringing our resources to your community. is washington your way. the c-span of course, now available in more than 100 million homes, created by cable and provided as the public service. >> "washington journal" continues. host: robert atkinson as president of the information technology and innovation foundation. thanks for being here. guest: thank you. organizations host: has a recent report looking at what states are most innovative in technology. who taught the list? guest: massachusetts is so far ahead of everybody else. massachusetts has all the pieces that you need to be successful. they have a great university system from mit and harvard, but many more. they have all of the venture capital that flows into it.

the smart kids move to massachusetts and go into companies and get a venture capital and create more companies. host: other states in the top five, washington state, maryland, connecticut, and new jersey. what do they have in common? guest: they have the course component of success for the economy today. they have a lot of knowledge workers, workers who are able to do a advanced technical work, start new companies. they have a lot of companies that are doing work that is not a commodity based, the low- skilled work like that gets moves to china or mexico. they are doing more high-tech work. and they're more entrepreneurial. they start new companies as more companies grow. they all have that in common. that is partly why we are seeing higher per-capita income growth in those states. host: the itif report looks at

26 indicators. how do you rank them and what do those indicators have in common? guest: we argue that the u.s. economy has transformed in the last 20 years. it has become five different factories, if you will. it has become more knowledge base. the new jobs require more knowledge and more skill. we're becoming more global, that is pretty obvious, with all of the foreign trade. almost all of the new jobs today are coming from the fast- growing entrepreneurial companies. it is becoming more i.t.-driven. and lastly, it is becoming more technology-driven. the companies that are driving growth are investing in research and development and science and engineers. host: our guest, robert atkinson, is the president of the information technology and

innovation foundation. we're talking about the states that are successfully investing in innovation and technology in which states are failing at that. the numbers are on the screen. the bottom five states, wyoming, alabama, arkansas, west virginia, and mississippi. many midwest states there, with the exception of wyoming. what do they have in common? guest: ever since world war ii the southern strategy has been, we are going to grow by attracting companies from the north who essentially like the south because we do not have high wages. that strategy worked really well up through the 1980's. now companies say, we're going for low wages, we are not going to go to the south.

we're going to go to southeast asia or mexico. if you look at universities, there are a few good ones, but overall, southern states do not have good universities as much as, say, a state like california or massachusetts or illinois or pennsylvania. the south had a wrong strategy. it worked for a while. it is a wrong strategy. and the southern states know that and they're working to correct their economies, but it is harder to do right now. host: some of these states have higher tax rates for its citizens. what is the correlation between taxes and what the government provides from those states for its citizens? guest: i think there's a lot of misunderstanding about tax rates and economic growth. it is not hot so much your tax rate, but what you are getting for it.

-- it is not so much your tax rate, but what you're getting for it. could you look at massachusetts, they invested well. they got great universities, the public schools, good infrastructure. the southern states, the schools are not very good, the roads are not very good, the governments do not work very well. the sweet spot is to have governments that worked really well and to have those that work with the economy is more about if you are using -- it is more about you are using your tax dollars to create wealth. host: anita is our first caller with robert atkinson. caller: i want to ask him about

the tax cuts that we are talking about. [unintelligible] does any of that tax go back to the colleges? guest: i think the question is, do the tax cuts some of go back to colleges, and they don't. i think the challenge is whether we're going to commit and go forward in the future to invest a, what some people call cut and invest, or just cut. if you think about the states that have done well, it is interesting, calif. in our index does not do that well anymore. when we did this index 10 years ago they were second. they are now eight. california does not invest any more. and they are cutting the higher and budget. there k-12 spending is 49, i

believe, in the country. at the end of the day, we've got to invest in this country, in growth. we've got to invest in colleges, research, scientific spending, work force education. and also, we've got to invest on the tax code side. one of the things we talk about in the report is the r&d tax credit. we are now the 23rd least generous country in the world in the research and development tax credit. in 1992 we were the most generous. a lot of the debate on taxes is just missing the point. on the tax debate, i would argue if you could restructure the tax system so that it is driving innovation, not just cutting. host: in texas, bob joins us on the democrats line in houston. welcome. caller: i was going to ask your guest a question.

i used to be plant manager at a chemical plant. the kinds of things that he says better been originated -- that are being originated and developed are things that are not exportable. they do not really make any money for the country. the country has gone from a manufacturing base to the kind of product base that he is talking about. the trouble with this, is that it does not do anything for our export in balance. guest: -- export imbalance. guest: i could not agree with you more. i think one of our biggest

challenges is our inability to compete globally, our massive decline in manufacturing output. when i talk about manufacturing, and talking about the chemical industry, the auto industry. the chemical industry is a very technology-based industry. it does a lot of research and development, invest in new capital, has skilled workers. i'm not just talking about software or something like that. at the end of the day, innovation is about manufacturing and other sectors. we are not doing anywhere near enough to fix it. washington, as far as i'm concerned, is almost as if the problem does not exist. we are not debating the problem this month in congress. but we are debating a lot of other things. one of the things i think the states get right is they understand the importance of manufacturing, whether it is low-tech or high-tech and we are

doing -- they are doing a lot to fix it. if we ought to do the same in washington. host: texas just came out 19th in the rankings. -- 18th in the rankings. and georgia is 19th. our next caller is from georgia. caller: your guess just insulted the whole south. i would put our kids about any in the country. i'm really surprised that he would say that because many people in the north are moving to the south because of the way we live here. and away we are able to do things. and are lower taxes than massachusetts. guest: if i did in seoul the south, i did not mean to imply -- i actually went -- if i did insult the south, i did not mean to imply -- i actually went to college in south carolina.

i do believe that there has been an under investment in education. i would put, for example, georgia tech at the top of the list in terms of innovative and effective and top quality research universities in the country. i would put chapel hill where i went to school on that list. and nc state. but overall, that is not the strategy. in the last 15 years, the south has changed its strategy. if you look at a state like georgia, which is investing in technology and research and development and science, they are doing a good job. but that is why the south is behind because for a long time they did not do that and they have begun to do that. but it will take a while. host: next call from texas, good

morning. caller: i agree with him, southern schools are horrible. the reason is because they spend all your teaching the tasp test so that kids can pass it and they are throwing their money constantly and sports. that is part of the problem. we have free lunches and free breakfast and fifth generation on the whole new roles. if we took it out of the church and community to take care and put it in the government's hands. what happened to striving for excellence? what happened to responsibility the parents? the responsibility is in other people's hands and that is the reason we are in this mess. guest: i agree with you in terms of schools focusing way too much on test and missing a lot of what education is. on tuesday we are going to be

releasing a report on science education and when we release that, we are doing it in partnership with what we think is one of the better high schools in the country, which is in dallas. the dallas science and engineering academy, and not sure of the exact name of it, but this is a high school that is principally hispanic and low- income kids, but it specializes in science and math and these kids go on to college and graduate with calculus at a rate much higher than normal high schools in the country. there are some schools that do this. all over the country there are pockets of innovation and excellence in k-12. but i think you are right, i agree with you in the sense that a lot of the schools focus on teaching to the test. host: a comment on twitter --

guest: absolutely. if you look at the data from the federal government, we have lost about 30% of our manufacturing input. in this last decade we have lost 30% of our manufacturing jobs. that is the largest manufacturing job loss in history of any country other than perhaps the united kingdom when their manufacturing sector collapsed. and we're just kind of ignoring it. there are many reasons for that. one of the reasons is currency manipulation, which the chinese and japanese do to prop up the prices. it lowers the prices of their manufacturing products and makes ours higher. we have some of the highest corporate taxes in the world and we need to begin to do something about that. some have talked about on capitol hill, including senator mark warner, talking about --

having this fruitless debate, if you will, about extend or freeze the bush tax cuts. let's freeze the bush tax cuts on the wealthiest 2% of americans and use that money to put back in manufacturing and other technology sectors in this country. that, to us, is a much better use of the money than just giving it to wealthy people. that would drive job growth in the country and give confidence back. host: recently in "usa today" in an itif report you said -- new jersey was in the top five.

it is, indeed, never for in your survey results here, in your study. -- number four in your survey results here. is that at a disadvantage for rural states? guest: it actually does put georgia state at a disadvantage. if you look at the engines of growth economically today, they are in these knowledge clusters. people talk about silicon valley, route 128, research triangle park in raleigh/durham, chapel hill. it is bringing together this mix of companies, universities, venture-capital this, too many colleges. -- venture capitalists, too many colleges. that is not to say that some smaller rural states have not

put together something nice. i look at vermont, for example. vermont has done well in a lot of ways. one area it is in the food products industry, innovation in the food products industry. it is not if you are in a rural state you cannot do well, but it is harder, i believe. host: let's go to new york where dela is on the democrats line. good morning. caller: in order to compete globally, technology and education are important, but what is staring us in the face -- and we are not about to admit it -- we allow corporations and technology and finance to move all over the world freely, get labor standards are not universal -- yet labor standards are not universal. other countries do not allow unions to organize their people are demanding wages. what made our middle class here are unions. if unions are forbidden in our

trade agreements, then we can never, ever expect to develop a middle-class in these countries that we try to sell. how can these countries buy goods from us if they do not have a middle-class with money enough to import goods from us? guest: i agree that trade agreements should to the extent possible implement labor standards. and many of the new trade agreements have done that. i agree that is a useful step forward. i would differ a little bit in the sense that if you really look at the difference -- if you look at a country like china, for example, even if they have labor standards, which they do not, at the end of the day to labor and -- at the end of the day, wages are not gwenn to go up that much. even if -- not going to go up that much even if they had better labor standards. and if they do, their productivity is going to go up. at the end of the day, the

biggest single thing we can do is to focus more on the currency side of it. that is where you can get an immediate 30%, 40%, 50% cost savings there if the chinese stop manipulating their currency and the rest of asia would have to follow suit. for example, some governments will not buy american products. government-related companies do not buy american products. they force them to build factories there if they want access to the market. there are some things we can do there, but i do not see this moving forward. host: robert atkinson is the president of information technology and innovation foundation. we're looking at the overall

rankings. our last caller was from the work. our next caller is from oklahoma. that is number 42 on the list. onnie, republican. caller: some of the problem is there is so much regulation in america. instance, i made some violin varnish one time. i made it myself and figured it out. and about 15 years ago somebody told me that some of the chemicals i was using they used to make illegal drugs and these are hardly restricted chemicals. but if you take the year 1900, there was plenty of freedom for people to do anything. it was wide open. you could do anything you wanted

if you could get away with any technology that you came up with, you could get a patent. in other words, the country could use these products. but now, you have so much regulation the only way you could ever invent something is to work for dow chemical. guest: i do not know if 1900 was all that good a time. remember reading upton sinclair's "the jonquel" in the eighth grade. jungle" in the eighth grade. that did not seem like a good time. but if you look at studies across the world with regulation and ease of use in -- doing business, the u.s. does not actually rank that badly. there are countries in europe that are much more regulatory than we are. that is not to say there are not things we could fix. for example, the fda, there is a regulatory process to get new

drugs and there are medical devices approved. europe has actually made it easier to approve those. i would not go so far as to say we would be better off if we abolished all regulations and to go back to the cowboy days of the 1900's. host: and here's a comment on twitter -- guest: a lot of rural states almost reject the government and say they do not need it, but in some ways the government has been critical with water, telephones. and recently broadband, there was a lot of money put into

broadband and much of that is going to rural. a lot of the money goes to farmers, just to give them money for something they were going to do anyway, or to not do something. we subsidized corn, an amazing amount, $50 per person to subsidized corn. and-to as corn syrup. -- and high fructose corn syrup. what we need is technology to develop those rural entrepreneurialism jobs built into the infrastructure. because really, they cannot thrive. they will not do as well as 120, for example. but that shift away from farming and subsidies for entrepreneurs. host: next call is from california. caller: i will be completely

different from the last caller. and i am actually for regulation. as far as labor goes and the environment goes. my question is geared more toward not how to increase profit, but morality. i watched a documentary recently on how chinese workers were committing suicide on -- at the plant where they were building iphones and they had to put out a net so they could not jump off the building. the labor standards are so terrible. you said that increasing labor standards is not that important. may be profit-wise, but how about ethically and morally? we are working in foreign countries just to make a higher profit. i know in free economics the only thing you should care about is increasing your profit for

shareholders, but what about ethics? and my second question is the environment. like e-waste, all of the ways that comes from computers, cadmium, lithium and all of those things. also, global warming. how do those things factor in? when you are in your meetings, you think about the ethical repercussions for humanity as far as a tree in the berkeley or not caring about the environment? -- treaty in the labor poorly or not caring about the environment? host: to give a response. -- let's get a response. guest: there are a lot of people in washington the focus an enormous amount on labor standards as if that is going to be the solution to our manufacturing crisis and our trade deficit. i do not think they will be. i do not think they will be big enough. i do not think it will be implemented in time or have enough defect off to do what we

need to do to restore our manufacturing -- have enough to affect to do what we need to do to restore our manufacturing. china is a, in this country in a way, but they treat their workers quite badly. at the end of the day, we can put pressure on them and try to work with them, but at the end of the day, what that is going to require -- i would not argue. in many ways that is in the hands of the individual companies. at the end of the day it is their job to provide low-cost, high-quality products for the american people. that is really more in the hands of the g-20 to put pressure on countries and companies to have a floor that the country cannot go below. the goal of this is to create a

high productivity, high wage economy is so that people have high standards of living an increasingly high standards. we are not doing what we need to do and i think that is an important point. host: zachary on the independent line. good morning. caller: i think the things that you said when you started speaking about the technology and the education and the different programs that are happening here, it is very important, sending our jobs overseas to china and mexico -- my main question is i want to know, what time frame are we looking at for catching up? if we are sending jobs overseas and we're looking at a smaller portion of technology, how will

win make up for the jobs that we've lost? -- how will we see make up for the jobs that we've lost? guest: the reality is that there are jobs in manufacturing that we will never get back, nor should we, really. they are low wage, very easy -- not in terms of work, but low- skilled jobs. that is what mexico can do. that is what china and india can do. our competitive advantage is -- as with the caller from minnesota, for example, with the medical device industry. these are really complicated technologies. these are high skilled jobs. these are things the chinese cannot make as easily. for boeing aircraft, advanced , the pharmaceutical industry -- there are a host of industries there is no reason we

could not make of all of them and eliminate the trade deficit in a decade. if we did that, we would be creating millions of high tech and high skilled manufacturing jobs. but we are not going to bring back a t-shirt factory or things like that. those are gone and that is just the reality of a global economy. we have to accept and embrace that. but we can and should be thinking of the high wage and high-tech manufacturing jobs. host: zachary, just so you know, minnesota came in 13th. this is a list of how states are using technology to successfully improve their economies. our guest is robert atkinson, president of itif. let's hear from robert in new york. caller: i think it would be

better if the governor of new jersey, instead of busing the schoolteachers, if they would take a look at the school children there. more at aing to learn younger age. teach them new stuff at junior high school so they have a better understanding when they go to high school and colleges. you want to comment on that? guest: i think his point was to teach them different skills in school. i'd think that is right. there are a number of high schools that are around the dark career and technical academies that teach -- around that teach kids more skills. i think the attitude that kids should be learning literature and not learning more technical

skills is a mistake, and some states are beginning to do that. host: richard writes about the importance of a creative class about the importance of attracting creative spirit . it includes scientists, engineers, poets, entertainers, architects and engineers, designers as well as thought leadership of modern society. how important you think that having a creative class is compared to having an entrepreneurial or -- having a greater cause is to having an entrepreneur real or creative spirit when it comes to technology? -- having a creative class, how

important is that to having an entrepreneurial or creative spirit when it comes to technology? guest: could i get an electrical engineer coming out of college or could i get an artist, a portrait painter coming out of college? there is no doubt that the electrical engineer does more for the country coming out of college than does the artist. i'm sorry. at the end of the day, it is the creative component of science and technology that is the driver. i'm sure i will get a lot of mail saying, an artist, how can you say i'm not important? if you think about what will drive economic growth, what will increase per capita living standards, what will make us competitive, it is not novelist's at the end of the day. it is going to be engineering, computer science, physics, biology. host: but those artists, those,

if you want to call them, left- brain activities, creative people, are they to be incurred to -- anchored to a committee? guest: if you are talking about a community, having a mix of people is important what you want to be able to do in a community or a region is you want to be able to grow and attract and retain people who will contribute to companies and growth companies. and having artists and the whole creative community is an important thing. but i think a lot of people, particularly community leaders, are putting way too much emphasis on that. people got that message and thought, if we just create the artist, we are good to go. the arts are a supplement. you still need the economic engine or you are not going to do well. host: next call is from texas,

democratic collar. caller: there was a guy that called who had a problem. he had a product, but could not find and manufacturing -- could not find a manufacturer. he had to go to china to find a manufacturer. these things that i call mafia jobs, casinos and the protection racket insurance companies -- when i hear someone say they are pro-business, here in texas, that means polluted wells and treat your employees horrible at will. that is why manufacturing is so important. you can have all the scientists in the world, but if they cannot find a way to generate their products, he will have nothing. products, he will have nothing.