even in a general way the big issues going on in economics. i like to use it to talk about u.k. stuff but people reading it in the u.s. would find it talked a lot about u.k. issues. but also the u.k. economy's position in the global economy, and a lot about the global

economy. i'm someone who spent a lot of time thinking about international economic issues. and i try and splabe those -- explain those, especially now, when they're crucial to everybody's lives, explain them in a simple way. there is a teaching function and also reporting function. >> what did you learn when you were larry summers' aide back in 1997? >> well, a couple of things. i certainly learned that he's a very smart guy. i learned that it's interesting to have a serious sort of academic economist at the heart of things at a time when international issues were pretty important. now they look like pretty small change. but when i got there, it was july, 1997. that was just the beginning of the asian financial crisis which began with this devaluation by the thy government but rolled into all000 these -- thigh government but rolled into these other, larry summers, bob rueben and alan greenspan as the committee to save the

world. and it did feel like that at the time. i learned that they did actually think very hard about the economics of things as well as the politics when they were trying to resolve those crises. but i have to say and i think larry summers has admitted this, it's a lot easier to lecture other countries about taking very dramatic moves and nationalizing their banks or closing them down. than it is to actually do it yourself. i think that's what they've been finding out last few years. >> how did you come to work for him and what was his job at the time? >> well, he was the undersecretary for international affairs. i think the current occupant of that job would be leal brenard of the treasury. and i had dealings with the u.s. treasury as my job. i was writing editorials for the financial times here in london. butted been to school at harvard and i was half american. and i think in my conversation with the international types at the treasury in washington, and it came up that i wasn't an american citizen and they knew that they had got through quite a lot of speech writers for

larry summers, he was quite a challenging guy to write speesms for. so they asked me to come onboard. and i thought it was a great opportunity intellectually but also as a journalist to see things from the inside and see what's at the heart of power in the global economy. at least back then. >> is there any way to describe the differences between the way americans govern and the way the brits govern? >> there's a lot of different things. and also to do with the political culture. i'm always struck and it may sound strange, it may sound like a bit treacherous to my media colleagues over here, i think the quality of intellectual discussion in the media is higher in the u.s. the discussion of political issues is somewhat more dominated by policy rather than sort of minaya of washington life. here you get teeny westminster stories that nobody in the rest of the u.k. i think is interested in. but in terms of the

politicians, the politicians in the u.k. do talk about the issues probably more than the politicians in the u.s. so i was struck by that. that the politicians are sort of caught in a rather superficial level of discourse because they're worried about their money raising and everything else. that doesn't happen so much here in the u.k. >> we need to get to stephanie flanders story. those people in the u.s. may know your sister, laura flanders, wlarings the relationship age? who's older? >> she's 7 years older. i and get discon srted. people ask me, i like to think it's clear but less and less clear over the years. but we've had a sort of trans-atlantic time of it as sisters. because she went to america originally just for six months off. she was going to have six months in new york when she was 18, when she just left high school here in the u.k. and then was going to come back

to college here in the u.k. but she fell in love with new york. and stayed there ever since. that was in the early 1980's. so we always have a time of going back and forth. i was in the u.k. system. i went through u.k. high school and i went to oxford university and then on a scholarship went to harvard as a graduate student. but i've always spent a lot of time going back and forth, my family were there, my mother was american, although living in the u.k. so i've always felt a pretty close connection and laura is -- has always been a very activist journalist. and you'll remember, a very activist work and has been a sort of fine line between her reporting and her wanting to change the world. which she's tried to do in a lot of different ways. eve always felt i was rather the boring establishment member of the family. working my way up through the inside and maybe a bit less actively political. though we are interested in a lot of the same issues. >> sisters -- she said it her ssm as a lefty? >> lefty. we would say that.

in the u.s. she seems lefty but she would seem like that here, too. she's not in the sort of mainstream. and i guess i'm -- we would say over here i'm captain mainstream. >> she does a talk show and writing for nation and -- >> she has her own and now has her own tv show that she's put on for the web and selling to stations by satellite. and basically a nightly discussion program of international and domestic political issues. >> all right. the coburn family, which we know a lot of in the united states, what's your relationship to them? >> well, my sister and i, we both had a grandfather who was this patriarch of what has turned out to be quite lefty but journals particular family. two generations of journalists. there are three brothers, alexander will be familiar to people in the states as another sort of bastion of left wing journalism in the u.s. and there are two other brothers, patrick and andrew. patrick is a very distinguished

international and war correspondent for u.k. newspapers. but he's also worked in washington. and he and his brother, andrew, have written a lot about saddam hussein and about many issues in the middle east. so they are pretty distinguished family. and i knew about them growing up. we got to know them. they're in a sense my half uncle because we don't have the same -- the grandmother was different in terms of their -- their mother was not my grandmother. but certainly it was sort of part of the vibe as i was growing up that we had this sort of journalistic heritage. and yeah, we were all quite a crew. i know some people have said in the states that they were a bit nervous that so much of heft wing journalism was dependent on one family they sometimes -- cyst-for-hitchens used to worry -- christopher hitchens used to worry that we were responsible for too much, in america. >> and people who we asked

talking to in great britain and when i mention stephanie flanders the first thing they mention is michael flanders. >> my father is as interesting as the other side of it. my british dad was a very well-known entertainer in the 1950's and 1960's and known as flanders and swan and pretty big in the states. and i know from looking at the royaltys and there are still a few royalties dribbling in. but people are still buying and enjoying some of the songs as the hip pot us song which is mud, mud, glorious mud and very witty and very british songs about animals. and they are much loved here and a lot of people of my age and indeed younger generations are brought up on those songs. and they may not even know who wrote them but they tend to know the songs. and i'm very proud of that. >> so how much trouble is britain in on the economic front? >> that's interesting. if you had asked me that about a year ago, i think people were really gloomy about prospects

for the u.k. but there's a funny thing. someone once said and i like to steal the line that the british people are the only people who are capable of feeling schadenfreude about their own misfortune. we take a glee in things going terribly wrong and that we -- the worst of this and we're going to lose it in a way that you would never find in america. people love to talk about how bad our weather is and how bad our economy is. you have to look past that to think are we really in such as bad of shape? we all like to think we're in such bad shape. but there was a sort of worry that -- there was a loss of control. and that we were particularly vulnerable to this crisis. because we had put so much store by our financial system. in fact, relative to our economy. we were much more reliant on the money coming out of the london city and the financial sector than the u.s. ever was. the u.s. in a lot of trouble, the u.s. economy, with its financial system but it's still quite small relative to the

whole economy. that's not so much true here. so i think people were pretty worried. and then there's been a sort of shift of focus. i think not so much because things have got a lot better here although so far, finishingers crossed, our recovery is looking quite strong. no one can quite believe it. and also because things have got so much worse across the channel in europe. i think in the euro zone and the single currency countries. the pressures that they're under have reminded people that although we have problems, possibly we have more ways out of our problems because we're not stuck with this single currency. we had a big depreciation of our currency, which i hope will make our exporters more competitive in the rest of the world. we're also part of this talk about competitive depreciation we're trying to become more competitive than the rest of the world. because we have more ways out of this, people are a bit more optimistic about the u.k. but there still is uneasyness when we get these rather good

economic figures coming in that we're still waiting for the other shoe to drop. that it can't be quite this easy. and still a fairly small open economy with very dependent on what's going on in the rest of the world. which is so uncertain. >> how does percentage of debt here compare with u.s.? >> well, it's interesting. we're in the same ballpark. and i guess the question is, america, with its unique position and having the reserve currency, at least for the moment, of the world, gets off -- gets special treatment, i guess. so they can get away with more borrowing than we can. our borrowing, the deficit, is similar to the u.s. this year, it was 11% of national income. which is roughly what i think it's going to be in the states. and that was considered to be an outrage by the incoming conservative government and obviously much higher than when the international monetary fund, when the i.m.f. famsly had to bail the u.k. out in the late 1970's.

so people were very focused on that. but it's looking -- with this new government, making such strides against some opposition and some concern by economists i should say, but with this government trying so hard to bring it down, i would say our borrowing is going on a downward path, our debt is still probably in the average level. it risen a lot but in the middle of the pack in terms of development -- developed countries. whereas in the u.s., there's still -- it still looks like it's going up as far as the eye can see. >> is there any way to compare david cameron, the prime minister, to any politician in the u.s.? >> it's annual -- it's an interesting question. you will get a similar kind of character. i'm trying to think. he's very much -- quite an establishment figure in terms of his background. he comes from a very -- what we would say posh background. and so do many of the people in his cabinet. so he's a traditional tori

prime minister. i'm not sure who the comparison would be these days. but he's become known at least in the -- when he became a leader he was a fresh face. he was supposed to be a compassionate conservative. in that sense you could compare him to george bush. but i'm not sure that he would embrace the comparison. although in a sense george bush also was from a more traditional u.s. background. but i think the key thing about david cameron is that he has at least given the impression of wanting to change the conservative party. make it more modern in the sense due to the conservative party, what tony blair did to the labour party. make it recognize that things have changed. people are more tolerant than they were maybe 10 years ago in the u.k. and also have a more open minded approach to how do you run government? but on the things like the budget, they're pretty hard traditional in the sense of wanting to cut spending pretty

sharply. that's something we see here from conservative governments but we haven't always seen from u.s. republican governments. they talk a lot about cutting taxes but they haven't always cut spending very much and usually increased it. >> your bbc economics editor, what's that mean and what's a day like for you? >> well, it's -- every day is different. but that means i'm one of the team of senior on-screen reporters. we have about half a dozen editors. and that's -- the key ones are the economics, political one, obviously, and the international or diplomatic editor. and we are in a sense -- we're not in charge of all the other output on our subject because that would be so impossible with the amount of output the bbc produces on radio, online, and on tv. but we are supposed to be, i guess, providing intellectual leadership and that's one thing i use my blog for on explaining how we should be explaining a story, what the take on a story

should be. so my typical day, well, today, i started it at 7:50 on the radio, speaking from my home, just after quickly making some breakfast for my kids. i was talking about the irish economy, whether or not they were going to get a bailout from the european union ministers who are meeting in brussels. so that's just a typical day. and those kind of issues. the euro zeen, the ongoing crisis in the euro zone is something i would be looking at as well as stuff that's going on in the u.k. >> we have a clip from a report that you made in march. and if you pay close attention, you can talk about the last government's budget and we'll compare that with what this government is doing. >> a river of red ink running through white hall. but the good news for mr. darling today was that it's slowly, very slowly, starting to go down. call it the count yourself lucky budget. the recession was tough but not

as tough as expected and the difference is our policies. experts will be debating for years whether the government can take any credit for the fact that unemployment is lower than expected, the number of business failures is lower as well. so the chancellor today did reap the benefit and announcing for the first time in years that the borrowing forecast was going down. he said the gap between spending and revenues this year wouldn't be 178 billion as he forecast in december but 167 billion. the number for future years is lower as well. as a result, the total stock of government debt will be 67 billion pounds lower in 2014 than he thought a few months ago. that's the good news. the bad news is that the total debt in that year will be 20 times that, more than 1,400 billion. there's a small net giveaway

this year of 1.4 billion including the extra winter fuel payments, phasing in the rise in fuel duty, and that temporary cut in stamp duty for first-time buyers. but look ahead, the plan shows he would take it all back and then come if labor stayed in office. the stamp duty cut only last two years but the rise for houses worth more than a million carries on. he would raise fuel duty in future years as well. >> a modest giveaway in the short term. paid for by the extra money that the treasury is getting from the bank bonus tax. but thereafter it's a modest net takeaway. higher stamp duty and higher inheritance tax and higher tobacco duty but a small takeaway of the -- at the end a. small giveaway at the beginning. >> that mean co-sound prudent to the financial markets. well, as prudent as a chancellor can sound when he's borrowing a pound for every four pounds he spends. the structural deficit, the part that won't go away with the recovery, was 8.4% of

national income last year. if labor wins, mr. darling now says he would cut that to 2.5% by 2014. >> basically a politician's budget. the market didn't get they surprises and didn't get any shocks. what we will be looking at is the election and the real budget. the budget that will probably come in two months after that election. the market will move on that. that's when the tough cuts need to be made. >> mr. darling has some one-off goodies and business leaders were underwhelmed. >> modestly positive from a business point of view. some help for entrepreneurs and small businesses but there's big anxiety about the shape and size of the deficit. >> to bring down that borrowing, we've had more details of 11 billion pounds in savings the central government will have to make. there will be many more but there too, this is a chancellor who wasn't giving much away. stephanie flanders, bbc nuelings. >> they didn't win. >> they didn't win. >> whches the election, remind us?

>> it was in may, in early may. and actually it coincided with an extraordinary crisis in the euro zone. so when you talk about what my day is like, they were pretty busy in those days because you had a twin track crises and what was going on in the euro zon was more important for the global economy and even for our economy. than what was going on in the u.k. you had this extraordinary weekend after those results where the conservatives didn't get a full majority. where for the first time in a very long time, there was a negotiations over creating this coalition which is what's happened. and the first thing they did was announce a much tougher approach to the deficit and indeed a lot tougher than what had been hinted at during the campaign although throughout the campaign, we had said the politicians are not really talking about what's going to happen after the election. none of them had. >> related to the united states, if you were over there right now working for larry summers, looking over here, first of all, to the layman it

looks like you're really cutting over here. and in the united states, they're not. will we have to in the united states do what you're doing here in order to survive? >> well, i think that's going to be -- that's the big argument. i think -- it's interesting because when gordon brown was around when the labour party was around in power, there was this meeting of minds between the democrats and labor. usually in favor of spending. and in favor of growth. whereas in the euro zone, they were more worried about inflation, and they wanted to have slow growth. i know from my time working with larry, that there's always been a confusion in washington, even among republicans, why would the europeans want to grow so slowly? why would they want to punish their economy? what's changed, i think, with this government is that we've become a little bit more european in our approach to the deficits and the approach to growth. they still want to grow the economy. but they think the way to do that is by having tough cuts. that is a gamble. they admit it. it's a calculated risk.

in the u.s., a very strong feeling in the administration, not just larry summers, but also the treasury secretary, tim gither in, who i worked for in that time as well, that you have to put growth first and too risky to be putting in place these cuts. the jury is out but for the first time in a long time the u.s. and u.k. who come into this crisis with very similar issues, they both had the boom times and ran up the public and private debt and had the financial sector sort of spending spree. they had the housing boom and bust. and they're taking very different approaches to how to get out of it. in the u.s., that need to cut borrowing, is being kicked down the road. >> i did some fast calculations. scary to do this. but you can correct it. the prediction that he was making, if i understood it, was that in the year 2014, 2015, the united kingdom would have about $2.7 trillion in debt?

>> yeah, that sounds about right. maybe a bit lower. but yeah. $1.4 trillion pounds. >> but in the united states we have about 13 trillion dollars in debt now? >> a much bigger economy as well. >> and there's -- about five times bigger population there. >> i think -- the stock of debt relative to the economy is going to be in the same ballpark. i suspect in the u.s. case, going to be a bit higher but then it depends how you treat some of this state debt and how you treat -- very exciting debates we cannot have about how you treat the social security trust fund. but we're in the same ballpark. but what i guess is different is that the u.k. has now put forward what most people would say is a credible plan for put being the debt on the downward path. and you aren't allowing the stock of debt to rise after the next few years. that's not what's happened in the u.s. >> this is a small thing.

for you, probably not for the person i was talking to last night. who says that if you're over i think 65, or 70, you get free bus rides. >> 60. gordon brown introduced -- there were quite a few of what we call freebies here that were introduced by him that now cost a lot of money. free tv licenses for all the people. that is actually i think over 70. free tv -- it was 75. and that's -- a free ride to watch me, the bbc. if you buy tv, you have to buy a tv license which costs -- well, a little under $200. maybe $175. and that goes free to people over 75. even if they're very well off. it's even more extreme in the case of the bus travel. if you're over 60, absolutely everybody in britain can get a card entitling them to free bus travel.

out of peak times in london but otherwise free bus travel. that's a point of contention. david cameron was pressured on the campaign and the election to say he would keep it. but the treasury would like to get rid of it and think it's crazy to be giving this free travel to a lot of rich pensioners and the rich elderly people. >> put it in context, i had to have a pass for a week here in london. it was about $40 for five days. in one zone. >> yes. or two zones. >> that would have been for subway. this isn't for using a subway. but you do see here that there are much reduced rates for people to go on the subways. you see people waiting. you often see slightly older people waiting outside the subway station for 9:30 a.m. when they can use their -- >> and free prescription charges. and free eye tests. i gather that under the national health system here, you don't get free eye tests or you wouldn't need them if you're over 60.

all that's free? >> most of that is free for elderly. some of that people would want it keep because they want to encourage people to get their tests beyond a certain point. it was a very sticky issue for margaret thatcher back in the 1980's when she introduced some of these charges for the nonretired population. but the bus thing and some of these other things, what they call universal benefits, that go to everybody, they are under a lot of pressure. there's a fuel allowance that you get. you get a big check for about $300 or $400 every year just to help you meet your home fuel bills during the winter. that's great. but it's not necessarily needed by a lot of the people getting the checks. >> what's this housing allowance you coop reading about? some people are taking advantage of. and you see the articles, the sun newspapers did a whole series of articles on all the cheaters. >> uh-huh. it's called a housing benefit. and it's basically help for

poorer people not just actually the unmany plod but people on low income -- unemployed but people on low income to pay their rent. there wasn't enough cheap housing for people so a benefit that developed. and it's the bill i think has risen to 20 billion pounds. which is a hell of a lot of money. it's more than we spend on our police and it's more than we spend on a lot of other things. understandably george osborne, the new chancellor, the new finance minister came in and said we've got to start bringing this down. i think what worries people is although there is money going to people who especially -- poorer people with big families and in the center of london or for them to find a house, to have their rent paid, can be a lot of money. can be tens of thousands of pounds a year. people say hang on. why are they getting it when i'm struggling to pay my mortgage or struggling to pay my rent? but if you only cut the benefits without doing very much to increase the stock of

cheaper housing, and we have a very shortage of housing, particularly in london, then you are putting a lot of people, possibly out on the streets. certainly you're making them move out of london. this is one of those things that was identified early on. if they cut money out -- we can see why they would want to reduce the bill. but you can see why they don't want any stories of people sitting in palatial mansions at the government's expense. if you make it very difficult for poorer people to live in london that will have a knock on for all the people that rely on those kind of workers for their companies and their houses. people with cleaners and people's childcare. >> going back to your report on what the labour party promised before the election. what's the difference? can you give us some specifics, the difference that the cameron government, the coalition government, has actually brought into being?

>> there was some tax rises labor had introduced which pretty much the new government has stuck with. but the bulk of the cuts which were being introduced, the reductions in borrowing, were going to come through spending. also in the case of labor as well. but the concern with doing a lot more spending cuts. and spending is playing a bigger role. just as a rough guide. alistair darling was going to cut spending by 50 billion pounds over the next four years. under this government it's going to be 80 billion. that's about sort of 5% of national income. it's just over 1% of national income a year of tightening. so in a sense they took what he had done. they stuck with most of it including the tax rises. but they added another half on top. >> you said earlier that you have an american passport. >> i do. >> do you feel british or american? >> i guess you can sense talking to me that i speak like a brit and i feel more like a

brit, i guess, because i've spent more of my life here. and i went to school here. mainly. but i certainly miss the states. i get a bit whiftful when i go back to washington and new york which i often do. and i feel a sort of kinship with america. i would be sorry if i never lived there again. i would like to think that i'll carry on going back and forth. >> is your mom still alive? >> no. she passed away 12 years ago. my daughter was born on the 10th anniversary of her death and so she's named after her, claudia flanders. >> a lot of the papers this morning, david cameron's photographer and video maker have left the public peril after the prime minister's vowed to pressure over his vanity staff yesterday. we see that stuff all the time in the united states. as you know. is that something that this government is getting caught doing? that they said they wouldn't do? >> etc. always with these guys, with any politician who announces that things are going to be different and things are

going to be clean and watch my mouth, read my lips, they always get caught. it's always a mistake to say that you're going to be clean and not do these things. david cameron has been called out for having photographer and video graffer who's been working with him on the civil service, on the government payroll. i would say it's a small piece of it. and having the occupational hazard for them, putting so much store by cutting waste, and having made people think that there's a lot of money to be saved in the bureaucracy. it's easy to catch them out on these little bits of spending. so far there hasn't been too many gatches on that -- gaffes on that front. >> we talked about difference in the countries. writing speeches for larry summers, how long did you do that? >> from 1997 to the end of the clinton administration. >> when did you work for "the new york times"? >> after that or nearly after that.

i was there on the metro section during 9-11. >> how long were you there? >> six months. "the new york times" and i didn't get along too well. i went to do a particular job and a change of leadership at the top and left and the new editors came in. they had a lot of problems afterward. but one of the initial problems i had was that i didn't find that that job was working out. that they weren't creating the job i went to do. but it was an amazing experience. i love working in metro. and the people i worked with there, i really enjoyed it and the only bit of local news reporting i've ever done. and it's a hell of a place to do it and a hell of a time to do it. >> we have something in common, rupert murdoch is an example. because rupert murdoch owns the times of london and the sun and the world for all i know and in the united states he has fox news and "the wall street journal." is there a difference in journalism in the two countries? >> i think there certainly -- and i noticed it on "the new

york times." having worked at the financial times which is a very serious newspaper here, but if you like, a little bit -- you can say they trust their journalists more or they have much lower standards in terms of fact checking and everything else. but they do -- they basically leave the journalist to make their own judgments on many things. in the u.k. and that may certainly other news, not necessarily the f.t. but many newspapers that means that -- there's less -- there's a lot of stories that aren't true. the sunday newspaper, someone once said to me the grate thing about sundays is that stories don't have to be as true. which i thought was a rather worrying expression but that's the kind of way that people talk in the u.k. you never hear that in any serious newspaper in the u.s. and i found -- i was taken aback initially and rather impressed by the amount of attention to detail. when i was working at the "new york times." and the fact checking. >> your blog stephenomics.

how many americans come to that blog? >> difficult to know. particularly if i'm writing about something global, it will go on the front page of the bbc global news website which is a very well read site and several hundred thousand hits from that. very hard to judge looking at the comments and i do get a lot of comments. they sometimes will be from the rest of the world but maybe not so much from the u.s. >> what's the address? >> stephenomics. www.bbc.ko/stephenomics. >> if you worked at the ex-cheshire or the treasury of the ups -- exchequer of the treasury or the united states treasury, what would the speech writing be like? >> speech writing would be similar. it depends on the person.

there are some leaders who are very careful about their speeches and they want everyone to have seen it beforehand and they work on them weeks in advance. i suspect they're in the minority. most of these guys get in there and have people they trust and want to do it at the last minute. i would be doing the people at the treasury, at the u.s. treasury, would be tearing their hair out because larry and i would be discussing his crucial speeches at 3:00 in the morning and there wasn't time for great checking by the rest of the bureaucracy. i suspect that is similar. what is really interesting and different is the u.k. treasury is much more powerful in the u.k. than the u.s. treasury is. i was sort of amazed -- i should have known this going in but when i went into the u.s. treasury what was surprising is how impotent it is. it doesn't have control over the monetary policy in the u.s. because that's the fed's job. it doesn't -- and it doesn't really control budget policy. because the president will produce any budget he wants to produce and even if he got control over congress, let alone if he doesn't, the budget

that he produces in january is kindly received and then completely ignored. the situation here is completely different. the treasury in a government, even a coalition government, is pretty much all your pl. -- all powerful. i have american friends who are astonished the chancellor and finance minister stands up on a certain day, you saw the report i did on the day in the spring when this happened, they stand up on a certain day in parliament and announce what they're going to do, sit down and in a week or so, it will have happened. there is none of the debate. none. months of painful back and forth that you have in congress. that's the key difference. the treasury is just much more mowerful. when you come to the rest of the world, no one really cares anymore what the u.k. treasury thinks. but in the case of the u.s., we did have an awful lot of control. some said too much control offer the policies that the i.m.f. and others were imposing on other countries. the irony was we had a lot more control offer many other

countries' policies than we did over our own. >> we have two million people that work for the federal government. when we watch the cuts being announced over here, it said 500,000 people are going to be cut in the public as much as. is that what like cutting a fourth of our civil service? is it the same thing? how do you find 500,000 civil servants in a country that only has 60 million people? >> they aren't all sism servants. they're everybody. -- they aren't all civil servants. they're everybody. 100,000 civil servants but also going to be -- they're hoping it will be the policemen and it will be the bureaucrats who are dealing with the different departments. and also going to be a lot of local authority, local government officials. and the other thing to remember is in that figure, it's all the people working for local government. and actually a good chunk of that is -- >> what control does the prime minister have over the local government? >> he's one thing. he's doing a classic trick of saying we are going to cut --

how much money we're going to give to the local government but we're going to give you a lot more control offer thousand spend it. they hated the fact that they were forced to spend on certain things. it's like -- similar in the states. the states hate having the federal government control how they spend their money. in a sense cameron said you'll have less money but we're going to stop putting so much control over how you spend it. so in that sense he's going to have less control over what local government does than his predecessor. a lot of the cuts are going to be felt on the local level. and in a sense, most voters are going to be blaming their local authorities for that. not going to be blaming westminster. >> in the united states the president stood up and said we're going to cut the money to the states, he may never be able to do that. because congress might not go along with it. what about here? chancellor of the exchequer stands up and parliament and says we're going to cut the money to the states, does that mean it will be cut? >> that means it will be cut. that's a key difference between here.

>> just like that. >> stuff in parliament happens is the key difference. the times where the government doesn't get its way. are fretty celebrated. and you would hear about them even in the states. because they would be a major loss for the government. in a sense, things are a bit different in the coalition government. you've got a lot of debate between the two parties, liberal democrats and conservatives, that has to happen behind closed doors within the treasury before these things get announced. so in a sense there's a new check and balance on the conserve tisch' power that wouldn't normally have been there there. unless something cataclysmic happens it goes through. that's the parliamentary system. very different system. >> as you very well know right across this river, right over there, conservative headquarters, just a couple of weeks ago, students, 50,000 students came to protest the cut, i guess not even a cut, it's now they're going to raise the tuitions.

is that going to float? is that going to happen and if it does what does it mean to the average potential college student here in this country? >> at the moment, it has all along been a really difficult issue for governments for 30 years. how do you pay for university education? when i went to college, 20 years ago, it was -- they were just -- they were just beginning to make -- prevent sort of better off families from getting grants. getting maintenance money while they were at college. i didn't pay a penny and my parents didn't pay a penny for fees. fees were introduced under tonny blair and he almost suffered one of the very few losses that you can suffer in parliament. he almost did over that issue. not over iraq. he actually -- the big loss he suffered was over tuition fees. those fees are going up. the fee at the moment is capped at 3,000 pounds or about $5,000. it could be double that in many

universities. the middle class and people very crucial for the conservatives' vote, that seems terrible even though the money will be paid back. it doesn't have to be paid up front. it can be paid back once you're earning and if you aren't earning more than a certain amount, you wouldn't pay it back. it's progressive in that sense. the poorest students will get more support. but it's really a touchstone issue. but i don't think they're going to back down because the universities say we cannot pay our way. we cannot stay serious academies in the world if we don't get more money. >> as you know from living in the united states, a lot of politicians and a lot of people say often that the united states is the greatest country in the world. what's that sound like to a brit? >> sometimes i spend my time defending america. they used to be. i think it's changed a bit. they used to be a sort of snobbery about the u.s. that they were a bit too eager and a bit too -- playing their

own trumpet. things like that. talking about what a great economy they are. people here we never talk about a great economy and talk about how we're going to hell in a handcok and people -- people would rather like to think that the u.s. is still a great economy. i hope it continues to be a great economy. >> so how is president obama doing in the eyes of most brits? >> i think people are surprised by how quickly his star has fallen. and i was certainly -- when i was in seoul at the g-20 summit, it was so striking how much less power he had coming into that meeting to persuade people to do things. because he just had the election results. and because there's just a sense that america is on the back foot. that it's not quite -- doesn't know what it's doing.

and that is a shame. i think people here wanted president obama to do well. and as i say they're not -- don't quite see why it's fallen apart. and most of them would probably -- >> i've never seen this in america english. you say the treasury is predictably kakahoop that the standard & poor's has revised the outlook. what is that? >> all i can tell you, my grand fore, father taught in columbia, my american grandfather would be telling me now exactly where it came from. and he loved the der vegas of these things. -- the derivation of these things. an english expression for being really pleased. it probably mass something to do with throwing a hoop in the air. but i shall have to answer this and go look it up. >> when you're in the united

states what are the things you say that people say what? like that? >> well, kakahoop would be quite up there. and there's a lot of -- there are plenty of -- a lot of traditional ones where we think of a vest as one thing and pants and things like that. he got pretty used to as someone who is trans-atlantic and pretty used to not using those expressions. i remember a conversation in the treasury in washington about growth in the future. so i'm afraid it was about economics. but i -- i think larry summers was there and probably tim geithner and talking about what the -- the prospects for the economy in the u.s. and i said well, if it's one point north, that's not going to be so bad. and everyone looked at me and said one point naught? one point naught. and now i no longer talk about naughts and only talk about zeroes. >> the impact of going to baleo college at oxford?

>> well, it's one -- i think the best -- certainly it's one of the better known colleges in oxford. and it's well-known for being a place where people study what i studied which is politics, philosophy and economics. especially the same thing that many people in the cabinet and indeed in the opposition, the senior labor people. studied it. a bit of -- probably tells you something about the u.k. that everyone has done the same course at the same university give or take. but i had a great time there. and it obviously has a tradition of being very politically focused. it's had -- produced a lot of prime ministers. and also one thing i liked about it is a lot of the rhodes scholars, we had canadians, graduate students there while i was there who are now doing exciting things. one of them is a canadian ambassador in afghanistan. >> harvard. how long were you there? >> i was there for two years. i was on a scholarship program. originally i was going to do a doctorate in political philosophy. but having had a bit of

time-out, i ended up doing not the government department. i was probably one. few people who's changed from the being adomically regular russ government department to the condition did i school which is the school of government. most people want to go from -- go the other way and have the prestige of going to the government department. but i was quite happy with a two-year course. and the freedom of being able to do pretty much anything i liked. i used to say it was disneyland for academics because i did a lot of economics and i also taught justice course for my -- i kept up some of the political philosophy and had a great time. >> have you ever or will you ever contemplate public service, running for political job? >> i have talked -- i have thought about it over the years and a lot of my friends and former college mates have gone that direction. i think i've just ended up being -- always that issue about are you a doer or an observer, i've ended up more often on the journalistic side

of things. but there's always a tension. i enjoyed very much being on the governing side in the u.s. one of the issues for me, though, is that if -- here, once you gone into government in some way, even if i went into government as an aide for this government, or any or government, i would then find it very difficult to go back to journalism. probably be the same thing in the u.s. that you -- once you have shown your cards it's much harder -- the bbc is very crucial, and i'm glad that no one has ever questioned that i have an objective view. people don't know what i think about a lot of these issues because i'm very careful to be balanced even in the blog. and that's -- that's the way it should be. >> have you been controversial? >> i don't think so. there was one time when i was actually working for bbc program, bbc newsnight where i interviewed david cameron and one of the ways that we wanted to highlight a policy that he had for awarding marriage, to give an extra tax break to

married couples, somebody thought it was a good idea for me to ask him the personal version which is to say do you think i should be married? because i'm not married and have two children and live with my partner. and thought to be a good way to put him on the spot. of course some of the right wing commentators thought that was outrageous and i was somehow carrying the flag for single parents and showing a terrible sort of left wing approach. and i'm not even a single parent. i want trying to make a point about single parents. i was slightly trying to make a point about whether it made sense to give money to people who didn't really need it in order to get married. and would anyone really get married for an extra five pounds a week which is what it was? >> explain your philosophy of having a partner and two children. is that accepted in great britain? >> we have a leader of the opposition who has a partner and two children. he just had a second child and i think it is pretty common. i may be wrong but last year was the first time where more

than half of the children born in the u.k. were born out of wedlock as we would say. so it is certainly a very common thing. i suspect i will get married, and just one of those things that we were sort of in the modern world, you end up spending more time looking for a house and starting a family and then you look around and say oh, we're not married yet. we'll have to fix that sometime in the future. >> in the united states, it's about 30% are born out of wedlock and some groups, it's as high as 70%. what's your philosophy of not marrying? where did that come from? >> i think it wasn't a conscious decision. i think if you -- if you meet someone sort of later in life, we met in the late 30's and you feel there is more of a time pressure. i've never been one of those people who dreamed about what my wedding would look like. i want really ever sure i would get married. and it seems like as big of priority to as i say, find somewhere to live together and to start a family. than to get married.

also the family started a bit quiger than we thought -- a bit quicker than we thought it might take and a question of timing. >> how old are your kids? >> 2.4. -- 2 and 4. >> there was an announcement made that there was going to be a wedding. and i can tell you from being here in the middle of november and watching it, everything went to that front pages of newspapers, television programs, went on for 24 hours. constant rerunning of the interview. between prince william and his bride to be. soon to be -- someday princess catherine. show us the relevance of that to this society today? >> i should ask you, what's the relevance to american society? the coverage in america was pretty extreme as well. >> immediately of course from all the networks,ary plains flew overnight to be here to report on it. why are people so interested? >> it is interesting. there was a piece of the british coverage, all about how

much american television had covered it. and i think almost 20 minutes after it was announced, very soon after it was announced, the networks here going to "good morning america" to show the british people how good morning america had said -- their first news item of the day. and it was sort of interesting. we're very keen -- we're very happy that americans are so focused on the royal family. i am someone who i'm not a firm republican. i have nothing against the royal family. but as someone who doesn't think -- i've never really understood the great fascination with them. but i think here, on that day, people were very happy to have some good news. a pretty positive feeling around prince william and kate middleton as she was known up until the engagement. and people were just -- were happy to have something nice to think about. it was on a day where there was a lot of talk about bailouts in the euro zone and other things. and it was nice to have those kind of issues off the front page for a while.

>> they're not going to get married until 2011. and i guess the question is, do you think there will be a steady, constant drum beat of coverage up until then? >> i suspect it will. never underestimate the british tabloids' ability to milk a story for all it's worth and then some. i know that they're already before they were engaged, they were the most photographed, the most paparazzi followed and often even -- and that's only going to increase and people were going to be interested in. the preparations. where is it going to be? what kind of dress is she going to wear? interesting timing will be that some of the biggest spending druts are going to be really -- spending cuts are going to be really felt around the country around the same time as the wedding. and there will be an interesting balance that the palace will have to strike between cheering everyone up because they haven't got the money or losing local services

and making them angry at the contrast between the royals' lives and everyone else's lives. so i'm not sure i would want to be the people in the palace trying to manage that one. >> let's go back to the cuts. what will people start to feel here? across the board? what different things will they notice that's costing either more money or more taxes or whatever? >> the key thing that's going to happen which is consumption tax, the v.a.t. will go up at the start of the year. that was the thing that was difference. it was the one new tax rise that this administration announced although they offset it by -- there was a payroll tax rise that they're not going to completely implement. instead they're doing the v.a.t. rise, consumption tax rise. the conserve tisch in the 1980's, margaret thatcher, increased v.a.t. very sharply in the middle of a recession in the early 1980's and for some generations that has resonance. the price of the things they buy could well go up as a

result of that. we should remember that's a 20% -- most people in the u.s. don't think in those terms in terms of a sales tax. this is a sales tax on everything except food which is going to be 20% on top of the regular retailer price. and where a lot of money was going into the n.h.s., they will notice that money is not going into n.h.s. anymore. and the administration -- >> n.h.s. stands for -- >> the national health service which i'm sure many people in america since they're always told that their system is better than the n.h.s. i'm sure they hear about it all the time. but the government has said they're not cutting -- there's not going to be a real cut for n.h.s. spending. it's going to go up slightly in real terms but for the n.h.s. facing enormous pressure for rising cost of drugs and the aging of the population. that feels like cuts. and after years after the spending was rising very rapidly it's going to feel like

a cut to everybody else as well. >> if you had to have a serious operation, and you had to -- a choice, would you go to the national health service here in great britain or the best hospital you could get in in the states? >> that's the kind of question -- you couldn't knock a politician here. and you can't even ask a bbc journalist. there is a strong feeling here that the best hospitals are world leaders. my son has a minor -- a moderate heart issue that he was born with. he goes to great alman street and that's one of the centers of excellence in europe and -- compare as well with places in the states. for emergency care, the n.h.s. still has extraordinary high standards. for some other kinds of care, if you want to get your hip replaced, if you want to maybe even some parts of cancer treatments, they -- there may be other parts. and certainly hospitals in the states that might be better. but boy, are they expensive.

i'm not sure any of us can afford them anymore. >> what chances do you give david cameron for being successful? >> it's all going to come down to this gamble on the economy. and a fascinating time for me. it does feel quite black and white. normally i'm the one saying this is -- there's some gray areas here. and we should be looking at the details. on this gamble that i talked about earlier, where the u.s. is taking one choice and the brits have taken another, he could be right. he could be wrong. but it is a gamble. and everything else will flow from that. if the economy is much weaker than they're hoping, if it can't withstand these cuts, the cuts themselves would be harder and even harder for them to bring down borrowing because they -- there will be upward pressure on spending from unemployment not going down and things like that. if growth is faster than they hope or as fast as they hope, then everything will seem a bit easier. and they will have a much better chance of being re-elected but it is very much

down. and they know that. very much down to this economic gamble. >> last question. there's a significant difference in the unemployment rate in the united states and here. by two points maybe? >> yeah. and i think the key -- what's been striking is again, a real contrast that we have not had the kind of rise in unemployment that you had in this recession. our recession was much steeper. we had a 6% decline in national income from what we would say peak to trough. from the top to the bottom. and awed much shallower recession in -- and you had a much shall or recession in in a sense but a much bigger rise in unemployment. and larry summers when he was still in the administration and certainly tim geithner really puzzling over why that's happened and how they can change that. because it's such a central feature of president obama's situation and people's worries about the economy. that you've got so many people out of work. here, people have not recognized enough what a difference that has made to the recovery as well. people just never -- people never felt as bad about the

economy as they did in the states because so many fewer people lost their jobs. they might have had to take part-time work or go on a short hour contract, but they kept their connection to the workplace. they weren't down the street. >> stetch any flanders, -- stephanie flanders, bbc economics editor. thank you so much for your time. >> thank you. >> nor a dvd copy of this program call 877-662-7726. for free transcripts or to give us your comments about this program, visit us at q&a.org. these programs are also available as c-span podcasts. >> in london students riot and

residents worry about program cuts and politicians debate the depth of england's debt crisis. q&a with interviews from london, tomorrow night matthew paris, former member of parliament who now writes for the times of london. q&a this weekend at 8:00 on c-span. >> the redesigned book notes website features over 800 notable nonfiction authors. interviewed about their books. there you can view all the programs, see the transcripts, and use the searchable database and find links to the author's blogs, websites, facebook pages and twitter feeds. booknotes.orga helpful research tool and a great way to watch and enjoy the authors and their books. >> next, the funeral service for elizabeth edwards. then another chance to see q&a with stephanie flanders of the bbc. after that, the irish parliament debates budget issues.

now the funeral for elizabeth edwards. she died this week after a six-year battle with cancer. her eldest daughter, kate, and two of her long-time friends, offer eulogies. in attendance, her husband, john edwards, senator john kerry, north carolina governor beverly purdue, and vicky kennedy. widow of senator ted kennedy. the service was held at edenton street united methodist church in north carolina where she attended after the death of her teenage son, wade, in 1996. this is an hour and 20 minutes. ♪ .

♪ >> ♪ and crown him lord of lords ♪ ♪

>> ♪ and crown him lord of lords ♪ ♪ ♪

>> ♪ and crown him lord of lords ♪ ♪ >> ♪ we'll join the everlasting song and crown him lord of lords ♪

>> and you may be seated. >> as we join our hearts in prayer, i invite you to join our voices as well as we pray together the congressional prayer as found printed in your bulletin. and let us pray. eternal god, we praise you for the great company of all those who have finished their course in faith and now rest from their labor. we praise you for those dear to us whom we name in our hearts before you. especially we praise you for elizabeth whom you have graciously received into your presence.

to all of these grant your peace, let perpetual light shine upon them and help us so to believe where we have not seen, that your presence may lead us through our years and bring us at last with them into the joy of your home, not made with hands but eternal in the heavens through jesus christ our lord, amen. throughout the ages the psalms have brought comfort to god's people in their hours of grief and we find comfort in these words as are found in selected verses from the 27th psalms. the psalmist writes, the lord is my light and my salvation, whom shall i father? the lord is the strong hold of my life, of whom shall i be

afraid? though a host encamp against me, my heart shall not fear. the war arise against me, yet i will be confident. one thing have i asked of the lord, that will i seek after. that i may dwell in the house of the lord all the days of my life. to behold the beauty of the lord and to eninquire in his temples, for he will hide me in his shelter in the day of trouble. he will set me on a high rock. i believe that i shall see the goodness of the lord in the land of the living. wait for the lord. be strong and let your heart take courage. p yay, wait for the lord. and from the 9th psalm, lord,

thou hast been our dwelling place in all generations, before the mountains were brought fourth, forever thou hast formed the world, from everlasting to everlasting, thou art god. for a thousand years in thy sight are but yesterday when it is past, over watch in the night. thou sweet men away, their like a dream, like grass which is renewed in the morning, in the morning it flourishes and is renewed and in the evening it fades and withers. so teach us to number our days, that we may get a heart of wisdom. let thy work be manifest to thy servants and our glorious power to thy children. but the favor of the lord our god be upon us. and establish thou the work of our hands upon us, yea the work

of our hands establish thou it. this is the word of god for us the people of god, thanks be to god, amen. ♪

♪

♪ >> ♪ rock of ages cleft for me let me hide myself in thee [ ♪

>> the first moment i met elizabeth is indelible in my memory. in the late summer of 1981, we both landed quite unexpectedly in the same month-to-month apartment complex in raleigh. our front doors 10 feet apart. we had twin sons and they had wade. and elizabeth was expecting daughter kate in just a few months. all four of us were recent law school graduates waiting on bar exam results and jobs to begin. she and i had just moved out of our first houses, houses that had felt like home, and it's fair to say i had less than a warm, fuzzy feeling about leaving our home and landing in the uncertainty of a temporary apartment. you may recall that empty

feeling you get when your whole life is in the back of a moving van, but a wonderful thing happened to me that day. it's amazing, outgoing, witty, smart, optimistic and authentic elizabeth stepped into my life and swept me into hers. she was the perfect anecdote for my uncertainty and need for order. she was an expert at living out of boxes and looking on the bright side. she'd grown up living out of boxes and looking on the bright side. well, the expected few months in the temporary apartment turned into many months and misery loves company theme was full in force. we didn't appreciate it much at the time but the edwards family and i were far from miserable. we formed an immediate bond and spent countless hours together. and elizabeth and i built a friendship of 29 years that took us to places that neither of us could have imagined then.

from the moment of our first meeting to this day when i think of elizabeth, i still think of the same things, spontaneous and optimistic presence, her gracious hospital ity, her embrace of all that is possible, her ability to get by on about four hours of sleep, her fairly intense competitive streak. if you've ever been lured into a game of boggle with her or a little trivial pursuit, you know what i'm talking about. a nice, friendly game? right. once when i was traveling with her as a sort of sidekick on a political campaign in 2004, she brought along two copies of the same crossword puzzle book and greeted me with, wouldn't it be fun to have cross word speed competitions?

great. [laughter] >> but above all, elizabeth was authentic. she was real. no pretense. no holding back. sometimes she probably needed a little holding back, but if you knew her parents, particularly her father, vince, you knew that holding back was not really in the gene pool. it is quite a tribute to her and the family in which she grew up, her parents, her sister nancy and brother jay, but after all the years of public travel, the talk shows, the books, the speeches, the disappointments, and the accolades, one thing stands out, elizabeth remained the same wonderfully authentic person, a pro at staying true and looking on the bright side. one reason that elizabeth was so much fun to have as a friend is that her interests were vast and varied.

and she knew so much about everything. her memory was incredible, thus the futility of playing her in any game that required the slightest bit of intellectual dexterity. she loved sports, particularly the tar heels but not just the tar heels. again in 2004 on a trip to ohio, we spent a lot of time in ohio in 2004, ellis roberts, an old friend of wade's, was our temporary trip director. his job was to make certain that we stayed on schedule. this september day we were 20 minutes ahead. elizabeth hated being late and ellis, who was very -- trying very hard to graduate from the roll of friend of wade's to talented adult political operative was feeling pretty good about himself. he was, therefore, a bit unnerved when i told him that elizabeth had arranged a quick,

unscheduled stop at the pro football hall of fame. we were somewhere near canton, ohio, after all. at the hall we were given a 15-minute tour by a nice young man. and as we were leaving, elizabeth stopped in the gift shop to get something for son jack. as she shopped quickly, and elizabeth was an expert at that, too, she and the guy began discussing the 1981 rookie of the year. the young man referred to the winner by name and elizabeth immediately and firmly said no, you're wrong. the guide was a little taken aback but elizabeth persisted. the 1981 rookie of the year was lawrence taylor. you go check it out. i looked at ellis and at karen finney and the secret service. we shook our heads and smiled. and in a few moments, the young man returned and said, you know, ms. edwards, you're

right. it was quintessential elizabeth. one of my favorite passages from the new testament is the birth from hebrews about encountering people we don't know. st. paul tells us do not neglect to show hospitality to strangers, for by doing that, some have entertained angels without knowing it. st. paul would sur i had -- would surely use elizabeth as a grand example of that device. but truth be told, elizabeth never knew a stranger. in every new encounter, elizabeth recognized a new friend who warmed her heart as she seemed to warm theirs. it was my privilege to watch her embrace thousands of people she'd never met. even protesters who she often saw as a sign she was really making a difference. on one particular night when she was signing books for a

really long time, and the line of people was still wrapped around the store, and i knew she was exhausted, i was exhausted, i whispered to her that she needed to avoid long conversations or she would be there until midnight. she scowled at me. did i mention she was quick to express negative emotions, too? [laughter] >> i rolled my eyes. at about 11:30 i spotted a woman holding 15 books to be signed. i was not happy. but as the woman placed the books on the table, she looked at elizabeth and said that her 6-year-old son had died a month earlier. this woman had been in line for 2 1/2 hours. and that elizabeth book had been of such comfort to her she wanted one for each of her dearest friends. elizabeth talked with her for a long while, carefully signed each book, and when the woman had moved on, elizabeth looked at me with a clear, piercing,

smiling, unspoken message. did i mention she could be piercing? it was her sincere pleasure and her great gift to encounter the nameless stranger she saw on a daily basis and to call them by name. she asked about their families and she really wanted to know about their families. she listened to their struggles and their dreams and really wanted to know about their struggles and their dreams. and she did not leave them and forget. those she met and their stories were etched on her heart and in that incredible memory. she truly looked for the angels in all of us. elizabeth loved christmas. she loved the decorations and she has a lot of them. she loved baking christmas goodies and her christmas parties on allegheny drive in raleigh are legendary. she loved the carols and the

group sing alongs, and unlike many of us, she loved the shopping part of christmas, too. she knew target and t.j. maxx coast to coast. today in her living room in chapel hill is the largest, most beautiful christmas tree you can imagine. it was lovingly decorated last saturday by emma claire and jack and john and kate, by her future son-in-law trevor, and his family, and by friends dropping by. if she had to leave us, no better time than the season when hope and promise are overflowing. maybe one of god's messages to us through elizabeth is that we will become fulfilled in life when we know who we are and live through our genuine, authentic self. easier said than done. but elizabeth most certainly did just that. she knew who she was.

she never held back. she was without pretense. a pro at loving her family. at warming the hearts of strangers. at looking on the bright side. i am so blessed to have called her my friend. ♪

>> i wish, and i'm certain you do as well, that elizabeth was here to deliver this instead of me. i've been at the house most of the week and knowing elizabeth so well for two days i've been looking for the notes, there would be gentle suggestions, no headings, but notes i was certain i would find and then i would know what to say, how to think about this day, as she would have with courage and unblinking honesty, and without complaint. well, perhaps i'll find the notes later today, but as the week has worn on, i've begun to think she saw the sad and beautiful metaphor, we must go on now ourselves. no more late night call with one more suggestion, how we might think about a tough problem with our children, no more back rubs for us when we,

but not she, were frightened about her latest diagnosis, no more calls into late-night shows filled with bloviators she would just not leave uncorrected. well, perhaps there are no notes. there is, however, a long friendship and the astonishing and beautiful and honest body of work that she left behind to guide me and all of us after this. there's one and only one advantage of me doing this instead of her. i can now do one thing that i think you will like, she would never let me or anyone else do before today. in front of her i can tell you a few stories that speak of her immense gifts, her boundless, bottomless energy, her sharp and breathtakingly wide intelligence, her unusual humor because she was not funny like groucho and certainly not like harpo the silent one, but she was hugely funny. i've got a few great stories about that in just a moment.

and as jackie mason would say, we already know these are funny stories. if you don't laugh, there's something wrong with you. i can also say freely now at long last that none of what she did publicly or as a mother, as an author, or as a friend, none of it fed or was in any way fueled by ego. i have known her well since early september, 1974, i've never detected even a tiny dollop of ego, of that grand body of work, none of it came from ego. she was offering comfort and love and telling the truth. her mind was constantly click, click, clicking long into the night and that was enough reason to keep going. in september 1974 i was at the u.n.c. law school in a contract torts class, they sounded the same to me at that point, i couldn't tell which it was. it was all too hard for me and seemed that they were in love

with the tiniest of distinctions, much like astrology or something like that. the professors were doing their one l thing, calling on whoever looked the most frightened and had their head down, they'd lead you on some awful journey, ending your confession you now took back which what you had taken before was ok and wanted to go back to what you said before which you thought was right, you know, possibly. then he called on elizabeth. would it be shallow of me to say here that she was gorgeous? not law school good-looking but big world, head-turning, walk into the pole gorgeous. then began the inquisition, except this time the aforementioned student held forth in an entirely logical way, no retransactions or uncertainty for 20 minutes until the professor in utter dejection said let me call on someone else. before i could jump up and cheer, the woman said, may i

add one more thing? she then explained that the policies behind the court's decision, though unstated, could have been entirely different ones in case one wanted to do that. the case could have gone the other way if you simply used some other assumptions and gave a few minutes on how that might be. it encouraged us all so much, me particularly, one day we would understand all this odd stuff. probably it could be done. well, i still don't know if that was a torts class or contracts class or something else but i thought to myself at that very moment when she was done speaking, i know who i'm having lunch with today. and thus began one of the great friendships of my life, one that has sustained me in times both good and wretched. i only hope i gave back to her 1/100th of what she gave to me. i'm just one example today. i know many of you could tell examples of stories similar to the ones i would relate, they follow a pattern.

during a wretched time in my family's life, i came home one evening to hear one of my teenage children on the phone. she was quiet for a few moments, except to agree, actually say yes, a word that i thought was lost to her forever, then she spoke for a long while, and on and on they went, yes', hmm, some shurs and on and on. i sat on the couch in the next room and listened as if this were the song bird returning. 45 minutes later she hung up and i was still in my suit and cocked my head to one side and looked at my daughter and she said, it was elizabeth. i decided to take a cooking class. [laughter] >> that was 10 years ago. she called my kids directly, listened, weighed in, called back many other times, it wasn't just good intentions or that hurt her heart when i told her sad news. elizabeth's m.o. is probably as

everyone knows, was to pick up the phone, knock on the door, get to the actual person and see what might be done about it. here's a note i got from my daughter this week, now 23 years old which she sent to someone she met on the campaign. she wrote, elizabeth loves so hugely and profoundly. she's fiercely loyal. she knew her way wasn't always the best way. it exhaust her, but she had to go about it her way and be herself even if it was tiring. i think about the 10 hours, really we spent sorting, labeling all of kate, jack and emma's baby clothes, boxes of them for reuse should any of them decide to have children. why didn't she just throw them in the bin? it was a tiring task and she had to throw a party in the room the next day and the clothes were everywhere and do it her way and save every damn sock because she loved them so much. it wasn't practical or really understandable, no one actually wanted to help and they teased her for it but she had to do it. she grabbed on to life.

she wasn't then about balance, she grabbed on to the people she loved and her bleves -- beliefs and wouldn't let go. i have so much admiration for that. this is also a reminder to me of how good we need to be to each other and how seriously we should take each other, the connections we forge, the decisions we make, the decisions we don't make, the love we feel and the love that we just don't feel. i don't mean live like it's our last day. i hate that. live like it's important, like it means something right now, dig in, be stubborn, hold on when it means something like elizabeth always did. don't shy away. life is really heavy, it's supposed to be. the world can be an awful place but it doesn't feel like that because of love. make you want to take a cooking class? elizabeth's family, and she was always making families, there really isn't a better word for it. certainly included the campaign gang. i heard a great story this week

from jennifer palmari. she was told to go to the edwards house in d.c., bring something to elizabeth whom she had not yet met. she was quite nervous. elizabeth came to the door in a night gown, classically diet coke in one hand and a low fat yogurt in the other and said, do you want one of these? they're the only things i have in the house. i swear, this time i'm going to lose 40 pounds. then she said, want to come in? and thus began one of the great friendships of jennifer's life. another story i heard was from christina reynolds, another campaign staff family member and it was a few years later of elizabeth sitting next to her and jennifer after elizabeth told us all the cancer had returned and she sat with them on the couch and rubbed their backs for a while to soothe them. then said their shoes were nothing special and it was a fine time to go to the outlets and off they went. [laughter] >> it wasn't all peace and

love. once in new hampshire one of those tiny 20-american meetups in the living room to pick the next president of the united states and all that, elizabeth did her usual unscripted and masterful job. at the end one of the voters said, you should debate laura bush and they all clapped in approval and elizabeth said, well, i don't want to debate laura bush but i would love to take a piece out of lynn cheney. [rafter [laughter] >> she came up every september to help kate move into her room at princeton and back again in may to move her out. elizabeth believes in hard work, not just showing up. i lived in princeton then and one year came in a bit late and she was sliding out from under kate's bed, dust bunnies on her clothes, i swear, she had a dress in hand, label still on it, a furious look on her face, and she said to kate, yes, you did tell me you didn't like

this beautiful dress but you did not tell me you just threw it under the bed! [laughter] >> a speech to elizabeth was two minutes of speech and an hour of questions. she always held forth brilliantly on so many topics, biofuels, fed monetary policy, nuclear proliferation. you get the picture. one time at a packed gym again in new hampshire, at the end people rushed to her, some just wanted to touch her. one man said, i wanted to ask you about how to handle north korea but you didn't call on me. the woman looked at her for a moment and then burst into tears and knowing somehow she had permission, put her head down on elizabeth's shoulder and continued weeping as elizabeth caressed the back of her head. another woman said, my uncle has an aunt and i and from nevada are we related? a man wanted a picture and smiled but he wanted the crying woman out of the shot.

and elizabeth fixed him with a disappointed look and said, well, you'll have to wait a moment, then. eventually the woman explained that her son had died. elizabeth asked about him, what he was like and then his name. and she said his name outloud. a simple as beautiful a blessing as i've ever heard. it was her theory in this way one kept alive the spirit of the child and spread it further into the world. now, that's multitasking. of course there are those things -- those were the things she did during the days. she was a poor sleeper. at night elizabeth got online with her communities, u.n.c. basketball, armed forces family, bereeved parents, there she received and gave comfort to others whose child had died and made a decade friendship with gordon livington and here's what she wrote in a forward to her book. it's about gordon. see if it reminds you of anyone else. she said, i was blessed i was

able to grab hold of gordon livington and his unapologetic forwardness. gordon did not preach or judge and illuminated where i stood so i could better see myself and the world around me and then he took the light and held it out so i could see the footholds and ledges i would need to proclaim a productive life. she went on, i reach for gordon's book when i need a voice that is at once certain and reassuring, unwilling to proffer any guarantees for he knows as well as anyone could, life will have its way with us and all we can do is keep ourselfs in alignment for the bumpy ride. he once wrote to me, all i know is what i feel and what i hope. it was classic understatement by gordon. he seems to know also what i feel and hope and what you feel and hope and which of those feelings are honest and which of those hopes are attainable. the reaction to elizabeth and

john and the death of their son was taking it on as a whole and seek the things that mattered the most, get rid of what was dictated by habit alone, jessson things whose seoul function was ease or comfort. the things that mattered, there they went big, bigger. as was well known they took their grieve and started the wade edwards learning lab for students at wade's school with less advantages than wade, during something he during his remarkable life complained about quite often. they began to reach out and open up wider and in the greatest and most brilliant act of all had two more children, emma and my most ex-lebt -- excellent god son jack. i think elizabeth loved work to do it but there is some left unfinished and look at you, jack and emma and say with absolute confidence, though your mom has christmas covered this year, probably a few years beyond, too, no worries there. jack and emma have their dad and i can tell you from very

close they adore and trust him just as kate does and wade did. he's a loving and very attentive dad and despite his grieve over elizabeth's death is strong and will take great care of these kids. you may know from saving graces that elizabeth went to wade's day every day from the day he died until the day emma claire was born. shed plant new flowers each spring, tidy up after the storm dropped debris and brought books and read to him from the bible, the entire 12th grade reading list, anything she thought he enjoyed or needed to know. being so open to everyone's story, making all things into family, this is what she wrote about being there. she said, it wasn't just wade i talked to, i also spoke to oliver and gerald, young brothers who died each at 2 years, half a century ago good i -- before i was born and brother robert who died in world war i and to ben and emily and betsy who died within

months of wade's death. i cleaned around wade like cleaning his room and i cleaned around oliver and gerald, since next to each child were his or her parents who died after them and were unable to tend to the graves themselves. i cared for the grave of ida's baby daughter and i cleaned the cross of john who died at 12 carefully washing the dirt that had gathered in the words inscribed on his cross in his mouth was found no gile. where elizabeth is headed today is familiar territory to her. it is ground she's worked with her hands and worked with her giant uncomplaining heart. here's the next paragraph she wrote, it doesn't matter to me whether all this sounds odd, i did it because it made it easier for me, easier for me to think that there were mothers who would come after me and tend to wade's grave when i no

longer could. easier to think that we were all in this together, that we formed a bond, a community, these long dead mothers and i and the mothers who would come later. so go now, elizabeth. it's today, be with wade, be next to beloved wade. it's been a decade and a half since you've lost him. i'm sorry, but we need to say that allowed. she'd have insisted on that. you know her. you should know she spoke of this often. other mothers and fathers, too, will carry on your unfinished work here, tend wade's grave, yours, too, and will look out for oliver and gerald's graves, the others as well, and we will call and visit emma and jack. we'll all say your name

outloud. we know what to do. you've prepared us well. rest easy now, beloved friend. sweet, sweet elizabeth. ♪

♪ >> ♪ gather at the river where angels we have trod with his crystal life forever ♪ >> ♪ yes we'll gather at the river the beautiful the beautiful river that flows by the throne of god

♪ ♪ >> ♪ we'll gather at the river ♪ ♪ >> ♪ yes we'll gather at the river the beautiful the beautiful river gather at the river that flows by the throne of god ♪

♪ >> ♪ gather with the saints at the river that flows by the throne of god ♪

♪ >> ♪ yes we'll gather at the river yes we'll gather at the river that flows by the throne of god ♪

[ ♪ amen >> our family was in this church almost 15 years ago to say goodbye to my brother wade. when i talked to my mom about what she wanted for her service, the first thing she said was that she wanted it to be here at edenton street because it was so connected to us and so connected to him.

back then the shape of our family changed tremendously and it has changed again now. but one thing remains true and will never change, which is that we're still a family. and that wade and mom are still a part of this family and always will be. the biggest difference between being here now and being here back then is of course that we don't have my mom to help us get through this. she was always a source of strength, a source of wisdom, a source of grace. she could bring out the brave in anyone. she brought it out in all of us. even in her last days she was comforting us, her family. when she could barely speak anymore, my dad and i sat at her bedside and held each of other hands and kept looking at us back and forth saying, i'm ok, i'm ok. she was way more worried about

us than we were about her. there was one afternoon after she couldn't speak anymore at all and i found myself at her bedside crying and trying to comfort her that we would be ok and of course she ended up comforting me. she reached over and held my hand because that's who she was and that's what she did. she comforted us always right up to the end of her life. but comfort was only a fraction of what my mom was to our family and who she was. as everyone's mentioned, she had an incredible sense of humor. i don't think anyone can doubt that who met her. she was feisty and she was witty. she always had the ability to make fun of herself and laugh at herself. she was smart as a whip. but tried to never hold that over anyone. well, unless she was right and they were wrong. [laughter]

>> generosity and consideration for others was ingrained in every fiber of who she was. it never left her and was instinctive to her w natural. during her cancer treatment, even the last week of her life, she always, always called her nurses and all of her caregivers by their first names and i asked her, how do you remember all of them, mom? and she said, kate, what else am i going to call them? they're here taking care of me. they see strangers all day, every day. it's so important that they know i know who they are. she was a consistent source of wisdom from things big and small, from -- you almost always regret prince but you'll never regret wearing solids. sfloo [laughter] to never marry the first boy you date without dating someone else because you would never

buy the first pair of shoes you tried on. over the last few days i heard my mother described as full of life and i think that's true but it's an enormous understatement. every single thing she did she did to the fullest possible extent. i can think of a hundred examples and i'm sure everyone here can, too. but the best example is her devotion to us, her children. she would do anything in the world to protect all of us. no matter the personal cost was to her. and i know that there are so many sacrifices she made for us that we'll never know about. but that's why i was lucky to call her my mom. i am who i am today and i'll become whoever it is i will become in large part because she was my mom and the same is true for jack and emma claire. she's been a lighthouse to all of us. a point of guidance when we feel lost or aren't sure what the right thing to do is.

she'll always be that sort of light to us. i know, pointing in the right direction. every lesson she's taught us has become part of our ethic. all the grace and strength she showed during her own life will hold us up in the hard days we face in our own lives. every smile and every hug she gave us will some day pass on to our own children. my greatest hope and the greatest ambition i can think of is that we will each honor her by being the people she taught us to be and that by doing that she'll live on in each of us. as you can imagine, and as glenn mentioned, it was really hard to think of what to say today because she's usually the one who tells me what to say. and also just because there aren't words that are good enough. so i thought about what she would do and what she would want. and as always i know she would want to be the one comforting us. so i know some of you know

this, but for many years my mom's been writing to her children a letter with words of wisdom for us when she passes away and we live on. i hope she doesn't mind but i'm going to read some of that to you. i know she wrote it for us, her children, but i believe everyone here and beyond she would consider part of her family and i think that this part at least applies to all of you. i'm going to try to get through this so bear with me. these are her words she wrote. i've loved you in the best ways i have known how. i lament my shortcomings more than you know. for when i was less than i could have been, should have been. i did not -- you did not get all that you deserved from me. for all i have said about life, i want you to know that all i ever really needed was you. your love, your presence, to make my life complete. you are a complete joy to me. i hope you will always know that. wherever i am, wherever you

are. i have my arms wrapped around you. as some of you may know, emma, jack and i ended every conversation with our mom by saying "i love you more." and she always responded "no, i love you more." and as you can imagine, none of us ever won that battle. but today i have the honor of being the last to say, mom, i really, really love you more." ♪ a

♪ >> ♪ amazing amazing grace how sweet,000 art thou art amazing grace

i needed ♪ ♪ ♪ >> ♪ was blind but now i see through many years

many days through toils and snares i've already come it was grace i said it was grace that brought it was grace that brought that grace

will keep me now ♪ >> ♪ when we've been there 10,000 years was found ♪ ♪

>> ♪ we first begun i was blind but now i see since when we first begun ♪ >> from the new testament we find these words of jesus and john's gospel, the 14th chapter. let not your hearts be troubled.

believe in god, believe also in me. in my father's house are many rooms. if it were not so, would i have told you that i go to prepare a place for you? and when i go and prepare a place for you, i will come again and will take you unto myself that where i am, you may be, also. and you know the way where i am going. thomas said to him, lord, we do not know where you're going. how can we know the way? jesus said to him, i am the way and the truth and the light, no one comes to the father but by me. if you had known me, you would have known my father, also, hence forth, you know him and have seen him. peace i leave with you. my peace i give to you, not as the world gives do i give to you. let not your hearts be troubled, neither let them be afraid. and then from romans, the 8th chapter, these words of the

apostle paul. i consider that the sufferings of this present time are not worth comparing with the glory that is to be revealed to us. we know that in everything god works for good with those who love him who are called according to his purpose. what then shall we say to this? if god is for us, who can be against us? who shall separate us from the love of god in christ? shall tribulation or distress or persecution or famine or nakedness or peril or sword? no, in all these things we are more than conquers for him who loved us. for i am sure neither death nor life or angels nor principalities or things present or things to come, nor powers or heights or depth or anything else in all creation will be able to separate us from the love of god in christ jesus our lord.

this is the word of god for the people of god. thanks be to god. let us pray. lord, in this quiet and holy moment, we put our trust in you . bless this family. strengthen them in their love for each other. and may they feel surrounded in this place by those who genuinely care. for jesus, it is in your name we pray, amen. two weeks ago, i'm sorry, today, one week ago john called me to say elizabeth was critically ill. he said that she had asked if i would conduct her funeral when that time came. i agreed to that without hesitation and told john that i would visit elizabeth on sunday afternoon.

the next day when my wife and i arrived at the edwards home, we spent a few moments with john and kate and then john led me in to see elizabeth. she was very weak but fully aware of who i was. after a few moments, john left the room, leaving us alone. i asked her if we could talk for a few moments about her faith. and she nodded, yes. i reminded her that several years ago she had made a profession of faith in christ when she and her family joined this church. i said to her, elizabeth, i want to ask you again two basic questions of faith. first, do you accept jesus christ as your lord and savior? she looked at me with those beautiful piercing blue eyes and said, yes, sir. then i asked a second question, do you want christ to forgive you your sins and make you

right with al mighty god? her answer was stronger, yes, sir, i do. i said to her as i've said to others across the years, elizabeth, not on my authority but on the authority of holy scripture in the name of jesus christ, you are forgiven and you're made right with the almighty god. we then prayed and i thanked god for her life and for her life to come. friends, that was a holy and precious time. it was especially so because i knew that elizabeth edwards did not come to faith easily. .

so that we may be able to come sold those who are in any of -- console those who are in any affliction with the

god. abundant through christ. the second passage comes from -- as for me, i am being fought out as a libation. i have fought the good fight, finished the race, and i have kept the faith. from now on, the crown of righteousness which of the lord will give me on that day, and not only to me, but also to all that have long before his appearing. these special passages of holy scripture, along with her affirmation of faith in christ, tells me that her struggle with face was over. she had made her decision. she knew in whom she believed and was persuaded that his words were true. i do to prepare a place for you,

that where i am he would be also. over the 40 years in my active ministry, i have known many individuals who believed in god but felt they could not understand much about that supreme being. that being as far as they viewed -- they knew, it was too big for them to comprehend. as a minister of the gospel, i say to do today with great joy -- to you today, with great joy, that this christmas season speaks to that concern. in the first chapter of the gospel of john, he proclaims the word became flesh and dwelt among us. the word jesus became flesh and dwelt among us. that man of nazareth. in a passage from the gospel in which i read earlier, jesus said whoever has seen me has seen the father. jesus came to show us what god

is like. he certainly came to save us from san bought also came to -- in, but also came to and abundantly. peace and justice and forgiveness every day of hisi feel compelled to say parenthetically it must bring the lord great sadness to see people promoting hate in his name. jesus was far more interested in redemption and then in -- than in condemnation. let me say that again. jesus was far more interested in redemption then in condemnation. -- than in combination -- condemnation. whoever believes in him should not perish and should have everlasting life. sometimes we forget to read that 17th first.

god sent not his son in the world to condemn the world, but that the world and through him might be saved. pre-christmas him says holy -- a ymn says holy us. be born in us today. at the end of that him -- the -- at the end of that hymnal, he says that we are not alone. there is a wonderful old story in which i would like to close with, about a family that woke up one christmas morning and prepared to attend a worship service at the little chapel. the father made his usual

excuses for not going, and then sent his family on their way. after they had left, he went into the den and looked out through a large fixture window -- picture window upon a beautifully snow-covered landscape. as he admired the beauty of nature, his attention was drawn to a little flock of tiny birds fluttering in the snow. it seemed to him they were very cold and hungry, and he felt sorry for them. he put on his boots, coat, hat and glove, and he made his way out to the barn where he flung open the doors and scattered the grain in the entrance. he walked some distance away from the barn, which in for the birds to fly in, but they did not breed they were afraid it. -- but they did not. they were afraid. the mantra to slip behind around -- the man tried to slip

behind around them and shoot them into the barn. that did not work and they flew in every direction. food with frustration, he took off his hat and slapped it against his leg. you don't bird's book critic liu you? in a moment of clarity, he thought of course they don't understand. i am so much bigger and stronger than they are. they are afraid of me. then he thought if only i could become a bird, i could tell them i am trying to help them. at that moment, the chimes from the little village chapel built out a glorious hymn. joy to the world, the lord has come. elizabeth edwards excepted that -- accepted that message, that good muse, and now she has claimed the promise of heaven. friends, i wish i was wise enough to tell you what heaven

is like, but i do not know. i know jesus said today you will be with me in heaven -- in paradise. my guess is paradise for elizabeth certainly involves a glorious reunion with her beloved son wade. and so, to you, john, cate, and other family members and friends, find solace and comfort in the promise that your dear one is in god almighty's care. she fought the good fight. she has finished her course. thanks be to god for the life of elizabeth edwards, and thanks be to god for her example of courage, openness, and dignity. in the name of the father, the son, and the holy spirit. amen.

i want to offer a word before we prayed together. this family has endured much sorrow and turmoil and lost over -- loss over these days. they need to grieve and heal and to console each other. they need and deserve some privacy. i am sure there are many friends joining me in asking for that book critic granting out of a sense of christian charity. do it out of a sense of common decency. i believe, and then maybe foolish or naive, but i believe that trade still reside in our stillt treat -- trait reside in our national

character. leave these folks alone. let them have some peace and time. the following prayer comes from william henn. let us pray. oh, dear lord, we give back to you those whom you gave to us, especially in this day we remember elizabeth who you have graciously received into your presence. you did not lose her when you gave her to us. we do not lose her by her return to you. your dear son has taught us that life is eternal and that love cannot die, so death is only a horizon, and a horizon is only the limit of our site. opened our eyes so that we may -- of site see more clearly and that we may -- know we are near to our loved ones. you are preparing a place for us. prepare us for that happy place, so that where you are, we may be always. amen.

let us pray at the prayer that the lord has taught us pray that our father, who art in heaven. -- viking and come, thy will be done, on earth as it is in heaven. give us this day our daily bread and 4 give us our trespasses as we forgive those who trespass against us. lead us not into temptation, but deliver us from evil for thine is the kingdom and the power and the glory forever. amen. >> one of the hymns that elizabeth selected is the him -- the hymnal promise.

♪ ♪

♪ in the ball but there is a flower in the seed, an apple tree in cocoons a hidden promise butterflies will soon be free in the cold and snow of winter there's a spring that waits to be on revealed until the season something god alone can say -- can see. there's a song in every silence seeking word and melody there's a dawn in every darkness bringing hope to you and me from the past will come the future what it holds a mystery and revealed until it sees an something got alone can see

in our in this our beginning in our time, insanity in our doubt there is believing, in our life paternity in our debt resurrection at the last, a victory and revealed until the season something got a loan can see. >> please remain seated as the family the parts. you'll be directed when to leave by the ushers. let's pray. oh lord, support us all the day long until the shadows lengthened and the evening comes and the busy world is hushed and the fever of life is over and our work is done. then, grant us a safe lodging and a holy rest and peace at the last. amen. ]bills toll -- bells tolle

ys]y to the world play

♪ ♪

next, a compromise deal. then, newly elected house representative christie noem gives the republican address. this includes government spending and the new health care law. right now, there's a big debate taking place in washington that will affect how much you pay in taxes next year. if congress doesn't act, tax rates will automatically go up for just about everyone in our country. typical middle class families would end up paying an extra $3,000. that's unacceptable to me. not when we know that it's the middle class that was hit the hardest by the recession. and not when we know that taking this money out of the pockets of working people is exactly the wrong thing to do to get our economy growing faster. economists tell us that this tax hike on working families could actually cost us well over

a million jobs. that's why i've been fighting so hard to cut middle class taxes. and that's why i brought both democrats and republicans to the table -- to put together a compromise, and work through our differences, so we could get this done. now, the republicans in congress strongly favored permanent tax breaks for the wealthiest taxpayers and the wealthiest estates, most of which would go to millionaires and even billionaires. but i didn't believe that these tax cuts were worth the cost. they'd add to our deficits without really boosting the economy. i believed that the best way to help the economy, and working families, was to keep middle class tax rates low, and cut taxes for working parents, college students, and small businesses. and i believed that with millions of people looking for jobs, it would be a terrible mistake to end unemployment

insurance -- not only for people who are out of work, but for our entire economy. so we hammered out a deal that reflects ideas from both sides. it wasn't easy, and it's by no means perfect. and as with any compromise, everybody had to live with elements they didn't like. but this is a good deal for the american people. the vast majority of the tax cuts in this plan will help the middle class, including a new cut in payroll taxes that will save the average family about $1,000. and as this plan is debated in congress, what i want to make clear is the real difference it will make in people's lives. it's going to make a difference for a single mom with two kids in ohio working as a cashier. with this plan, she'd get a new payroll tax cut and a bigger child tax credit together worth more than $2,300. it's going to make a difference for a couple in florida earning about $50,000 and trying to put one of their two kids through college. they'd save more than $4,000 because of the middle class tax cuts -- including a $2,500 tax credit to go toward college tuition. and it's going to make an enormous difference for people

looking for jobs. for many of these families, emergency unemployment insurance is the last line of defense between hardship and catastrophe. and i'd point out, if these folks stop spending money, it will also hurt businesses, which will hurt hiring, which will damage our recovery. so this plan is going to help millions of families to make ends meet, through tax cuts and unemployment insurance for people who've lost their jobs by no fault of their own. and we included tax relief for businesses, too -- making it easier for them to invest and expand. all told, this will not only directly help families and businesses. by putting more money in people's pockets, and helping companies grow, we're going to see people being able to spend a little more, we're going to spur hiring -- we're going to strengthen our entire economy. now, i recognize that many of my friends in my own party are uncomfortable with some of

what's in this agreement, in particular the temporary tax cuts for the wealthy. and i share their concerns. it's clear that over the long run, if we're serious about balancing the budget, we cannot afford to continue these tax breaks for the wealthiest taxpayers -- especially when we know that cutting the deficit is going to demand sacrifice from everyone. that's the reality. but at the same time, we cannot allow the middle class in this country to be caught in the political crossfire of washington. people want us to find solutions, not score points. and i will not allow middle class families to be treated like pawns on a chessboard. the opportunity for families to send their kids to college hinges on this debate. the ability of parents to put food on the table while looking for a job depends on this debate. and our recovery will be

strengthened or weakened based on the choice that now rests with congress. so i strongly urge members of both parties to pass this plan. and i'm confident that they will do the right thing, strengthening the middle class and our economic recovery. thank you. hi, i'm kristi noem, congresswoman-elect from the state of south dakota. i'm honored to represent the people of my state as part of a new majority committed to being humble, more modest, and more focused on addressing the challenges our nation faces. while washington has been busy doing what's best for washington things have gotten worse, not better for families and small businesses. with unemployment still rising, the number one thing our family-owned small businesses need right now is certainty. they need to know that the government is not going to come in and do anything to jeopardize their ability to keep their doors open. so it's certainly encouraging to see that president obama has proposed a potential agreement to stop all the tax hikes scheduled to take effect on

january 1st. failing to stop all the tax hikes would mean taxes would go up for small businesses all across this country, destroying more jobs. the american people want to see all the tax hikes stopped, and they won't tolerate games that might get in the way. they won't put up with any celebrating and back-slapping, either. putting the games aside and doing the right thing for the people shouldn't be the exception it should be the rule. while stopping all the tax hikes would be a good first step, this alone won't eliminate the job- killing uncertainty hanging over our employers and entrepreneurs. that's why we need to focus on cutting spending and reducing the size of government. the american people want us to stop spending dollars we don't have. to do that, we need to start taking a long, hard look at the size and scope of government and find new ways to resist washington's urge to grow and to grow. let's do a better job of following the money and evaluating the effectiveness of government agencies. we also need to repeal the job- killing health care law. just about every day during my campaign, i visited with small business owners who told me this health care law is going to increase their costs, how

they're making those tough decisions about whether to continue offering benefits. once we repeal this law, we can replace it with common-sense reforms that lower costs for families and small businesses. republicans have outlined these priorities and reforms in the pledge to america, a governing agenda built by listening to the people. hard work lies ahead, but those of us in this new class of representatives have come face to face with the people's frustration and we are committed to making sure washington humbles itself and starts making good decisions. listening to the people, honoring our constitution, and making the most of the blessings god has bestowed on this great nation is how we go about securing the promise of the american dream for our children and their children. thank you for listening, and may you and yours experience all the joys and blessings of the holiday season. >> now, since you're in the tax advice from today's "washington journal." this is 30 minutes.

host: kevin mccormally is the editor of the "kiplinger's personal finance." their annual forecast issue on where to invest in the 2011 is out now. today we talk about a year and tax advice for 2010. first, with the discussion regarding tax reform, where do we stand right now and how will this affect the average american as they get ready for april 15th? guest: people are still on tenterhooks about what these people will do. year-end planning has been held hostage. we do not know what the tax rules are for 2010 alone for 2011. there are all these things that expire every year because congress cannot bring themselves to pay for them more than one year at a time. they proved extension, it expires, day approve an extension retroactively. we have uncertainty. people can start their year-end

planning now. here is one example for investors. as the law stands right now, the tax rate on long-term capital gains, stocks, bonds, or other assets you all for one year is 15%. if nothing happens, that goes up to 20%. that is a 33% increase in the tax rate. someone is thinking about selling the stock, should they sell at the end of the year, wait until january? what will happen? i did they will restore the 15% rate, so people can make those decisions right now. your-and tax planning is always a decision looking and two years. you want to figure out how to pay the lowest amount of tax in the combined years. you may want to accelerate cement, to get into a lower tax bracket or accelerate exemptions. in the next few days, hopefully we will know. host: there are a lot of americans planning on a two-

track based on the things you have said. there may be some americans that, by themselves, have to file twice. why would that be necessary? guest: they would not have to file twice. right now, people are just trying to determine what to do so they are in the best position when they file next year. i do not think we will see filing twice even if congress fails to act if they hit gridlock. at the bush tax cuts do expire and everyone has taxes go up, focus on the bush tax cuts and they think we are fighting over the top earners. the fact that the matter is the bush tax cuts expire and every american's taxes will go up by $800 when the 10% bracket this appears. there you have to look at that. right now, we are trying to figure out how to be in the best position when you figure those positions for 2010. host: there are those people who have all of their ducks in a

row and when the forms come in, they are ready to fill in the numbers, it off, and get it out. guest: this year, the irs did something very interesting. they started printing the forms not knowing. there are places on the forms for these extenders, like the $250 extensions for teachers. it expires every year and they reinstated. right now is dead. the irs concluded that line with a little note that says, "be careful." of the irs is trying to be on track. in the past because congress rates so long -- wait so long, a lot of people want to file right away. 75% of the american people that the government takes too much out of their paychecks, but they do that to get the refund. that is why they want to file early. at kiplinger.com we let you know

how to do your withholding properly. it will help you save money all year long. host: we are talking about here- and tax advice with kevin mccormally. if you want to get involved in the conversation, we have divided the numbers differently. if you are in the eastern and central time zones 202-737-0001 and 202-737-0002 if you are in the mountain and pacific time zones and you can also send us messages 3 e-mail and twitter. our first call comes from the republican line in gainesville, texas. jim, go ahead. caller: i think there is another tax option which would be to end the prohibition on drugs and tax

of those. we tax cigarettes and liquor. i do not see why we cannot do that. one of your previous guests was talking about swinging back and forth with republicans and democrats. america is fiscally conservative and socially liberal. as soon as the party's figure that out, we will be a lot better off. host: we will leave it there. the idea that congress will allow taxes on illicit drugs? guest: i do not think so since we do not allow people to purchase them. i do not think it will happen. host: los angeles. go ahead. caller: i have a specific question. when my mother died three years ago, she left me a small amount of savings bonds, $5,000 or so, that she purchased in the both of our names 20 years ago. if i catch them in, do i have to

pay taxes on the interest? guest: probably. the only exemption if you would have paid taxes every year. since you are a co-owner, one thing about savings bonds is that they are not like most other assets. when there is an estate tax, any earnings up until the time of death of the first honor, there is no taxes. this is considered income in respect of the deceased so you will be taxed on the full amount of earnings. host: we can talk about that now. in "the new york times" this morning, there is a headline about the estate tax cut off.

explain that to us a little bit. what do they mean by "super- rich"? guest: this was created in 1916. we have had taxes on estates. it expired at the end of 2009. no one thought it would never happen. it was part of the first bush tax cuts. it disappeared and it was supposed to come back to life in 2011. what president obama and the republicans agreed was to bring the tax back to life at the exemption level -- i am sorry. in 2009, the first $3.50 million

was a tax-free. tax returns filed in that year, 15,000 estates' pay the estate tax. 2.5 million people died and 15,000 of them had enough money to have to pay an estate tax. in 2008, the exemption was $2.50 million and it rose to $3.50 million. the tax will come back with a one man and dollar exemption. it is still high enough that the vast majority of americans will never pay it. obama has made a deal with the republicans comes back and it will rise to a $5 million exemption or $10 million for married couples. sanders said it during his filibuster that it would apply to 6600 people. the interesting thing about the estate tax is that congress will probably reinstated retroactively to january 1st, a 2010, but the estates of people

who died this year, they would give them a choice not to pay it. instead of paying the tax based on a $5 million exemption, we will say if you like the other law with no state tax on a carryover basis of the people who inherit property, like the last caller, any appreciation up to the date of death, there are no taxes. that is called a step-up basis which is figured on the date of death about the. this is a carry-over bases. if you inherit stock, you have to know what they paid for it and you pay tax. when they will allow states to do this year is to make a deal. which one works better? no estate tax and a carry-over or the $5 million exemption? the vast majority of people will take the $5 million. host: year-and tax advice is what we're talking about this morning on "washington journal.

we have kevin mccormally the editor of "kiplinger's personal finance." caller: i just wanted to ask. i was incarcerated for 18 months. when i got out, the irs sent me tax forms saying that i owed them money. i did not understand why i needed to pay taxes if i was in jail. guest: if you had earnings, they want to tax them. caller: how do i have earnings if i was incarcerated? guest: they could have gotten a report that you receive day -- a 1099 form. send them a letter. the irs makes mistakes. someone may have used your social security number and there were earnings reported. there are all sorts of ways this could have happened. if you can prove you have no earnings, they will leave you alone. they have other fish to fry. host: did you have a prison job

when you were behind bars? caller: no. i was just locked up awaiting trial. guest: if you had in our earnings, you know -- owe no income tax. coliseum number on the top of the former. -- call the number. host: now those who do have prison jobs, would they be subject to taxes? guest: i do not know. the wages are low enough, that i doubt there would be taxes. if they are married and have spouses on the outside, there is no exemption for that. host: dubuque, iowa. caller: i think the taxes should go back prior to reaganomics and

this trickle-down theory. go ahead and tax the rich at what they were used to during the trickle-down reaganomics. the people who let the wealth trickled down the road. guest: the deficit commission reported that it went exactly the opposite way. they brought was eliminating all tax deductions and tax credits and reducing the rate so it would be 23% and not 35%. the debt commission is going in the opposite direction that this gentleman suggests. they want a much simpler tax code. this is what president obama suggested early this week that he may start pushing for. we think something big will happen within a few years simply because as the deficit

commission said, we have to do something. things are out of control. host: from virginia, go ahead. caller: it is time to pull up the bootstraps. that the rich people to pay it off in full. get wall street to pay it off. the people who take the jobs overseas like maytag, they should be taxed half of what they make. but they did not like it, they can go to mexico or whenever. pay off the deficit and then it take the money that the rich are making, the dollar is so strong that they will get it back in no time. guest: it sounds like he is talking about tax incentives for companies that want to keep jobs here in the united states or tax incentives to keep jobs here.

host: what i was wondering is, are there tax incentives for consumers to buy things that are produced here in the united states? guest: i do not think there are any restrictions to buy domestically produced products. when we had cash for clunkers, there was concerned that it could apply to buying a japanese car, a german car. i did not think congress has focused on were the goods are produced. there are incentives to buy things. we still have an energy credit that you can get a tax credit of the $1,500 if you insulate your home or put in the new windows or doors. that expires on december 31st. if you have been thinking about doing it for your-head tax planning, you should try to get biggest -- to get those paid for and installed. high efficiency furnace, air- conditioner, they will be the $1,500 to help pay for it. we have seen in the proposal they are discussing now that it will not be restored in 2011.

there are some incentives for that. the bill they are working on now has incredible incentives for businesses. is the 100% bonus depreciation. if it goes through, any company in this country, anything they buy with a useful life of less than 20 years, machinery, equipment, they can deduct the full amount the year they put it in service rather than depreciating over five, 10, 20 years. a huge incentive for businesses to buy better equipment, create more jobs in the stimulus program. host: our next caller from sacramento. you are on the "washington journal" with kevin mccormally of "kiplinger's personal finance." caller: thank you for being on the show today. my question is this. we have a family trust and it is worth about $1.4 million.

it is all derive from certificates of deposit. my father has already paid taxes on all of the income from that. we have three children in the family. if the exemption goes back to $1 million, would that count on this type of income tax? guest: not on the and come, but the asset. do not worry. it will not go back to $1 million. believe me. the republican controlled house that comes back in january will reinstate some sort of estate tax exemption of probably at least $5 million. that is why people think the democrats are not over this. obama got the best deal he could get. if he did not take this now to get the unemployment exemption, something even more generous

would come through next year. do not worry about that with your $1 million trust. host: next up is madison, wisconsin. caller: could you please give us some accurate figures on what percent of federal income tax revenues come from the top 5% of households and what come from the bottom thick the% of its households? -- the bottom 50% of households. guest: we have a calculator on our website, kiplinger.com, a calculator. if you type in "tax burden" you get a calculator and it will tell you what percentage of people fall in that income level and what percentage of the taxes they pay. that is based on data the irs released a few months ago. it is up to date. it is remarkable what you will see how small a percentage of

the total federal tax burden is borne are the lowest 50% people. i think it is something like 20% paid by the top earners. millions and millions of american families pay nothing in federal income taxes. millions of the families get the current income tax credit which is a refund of the social security taxes they paid because they do not pay enough in income taxes to get a big enough refund. look at the numbers. in a show you why it is really difficult to balance the budget just with higher tax rates. take a look at it. i do not keep the most up-to- date figures in my head. host: in one of the most recent kiplinger tax letters comes out by weekly. i atomizers can easily shift

deductions, state, and local income taxes. mailing your january estimate in late december like to claim the deduction this year. explain that. guest: this has been held hostage by the uncertainty. if you have state income taxes that you pay quarterly and it is not withheld from your tracks -- checks, your last payment is due january 15th. if you write that check and put it in the mail december 31st, you can deduct it 2010 which gives you the tax benefit one year earlier than if you write the check two weeks later. the same thing as a charitable contributions. if you are thinking about making one this year, a charitable contribution made by december 31st gets to deduct it this year. on january 2nd, it is in 2011. state income taxes, if you have a property tax bill did in january, you can pay an early and get the tax benefit a full year earlier. the season for

giving. louisiana. go ahead. caller: about the itemizing and a different deductions out there, can you expand on the opportunity of looking at a flat tax where everyone regardless of income, you just pay a flat tax. would that be more equitable for all americans? thank you. guest: it is a question that comes up a lot. the problem with the flat tax is how high the rate would have to be to replace the income that now comes from the income tax. some people say 27% of their income would have to go. it is tough. some people say 15% and it is arguable. the whole idea with the deductions and the credits, these men and women keep trying to make it fair. they did not put the brakes in the largest on a whim or to help a friend. what the debt commission wants

to do is get rid of all deductions. they are moving toward a flat tax. they still want to have a progressive with 8%, 14%, and a 22%. they are trying to move in that direction by getting rid of it. if the debt commission had their way, there would be no itemized deductions. it would all be standardized. it would simplify life. it would put tax planners out of business. there is a movement. whenever we get to a pier flat tax -- how would do you deal with a really low people or the low and middle class? do they pay the taxes? will there be breaks? host: tampa, fla., you are on the "washington journal" with kevin mccormally. caller: thank you for taking my call. it never ceases to amaze me. i am poor. it never ceases to amaze me.

the rich people pay taxes. i love to see corporations grow and grow. we need those people to have more money so they create more jobs. when you on a corporation, you prosper. i could prosper all of my life before. the rich people do a lot of good when they start corporations and we can work. i think that it is an important thing. guest: we are seeing these incentives for corporations to buy new equipment. it's the corporate rate is 35%, they spend $1 million on new equipment and it saves them taxes. that is the kind of incentive they're trying to give to corporations is so, as you say, they can create more jobs. it is a snowball effect. one reason why we are in such a terrible deficit problem, figures came out in the first two months of fiscal year 2011

that the government spent about $600 billion and they took in $300 billion in taxes. for every $1 that washington's stance, taxpayers only paid 50 cents. part of the problem here is high unemployment means people are on working, not making money, not pay in taxes. host: we want to show you some of the average savings for 2011 based on the current tax deal. this comes to us from the tribune newspapers. this goes all the way down to somewhere between $40,000 and $50,000 will save around $1,700. what are your thoughts on the

likelihood that this tax cut deal will save -- stay the way it is? guest: great question. the funniest thing about this tax cut debate is the argument that the republicans want to make the bush tax cut permanent and the democrats do not want them. nothing they do is permanent. they change it every year. they can do whatever they want. it amazes me. will this go through? i think it will go for two years. i believe this two years that congress and president will get serious about significant tax reform. i liked what the deficit commission has suggested. there will be big changes. it keeps me in business and i am happy about that. those figures, you know, we can waive them around, but as the gentleman asked earlier about

the percentage of taxes that people pay, the fact of the matter is that any tax cut you give, the rich people will get more dollars because they pay more. just try to keep this in perspective. should the top rate be 35% or 39.6%? that is a battle we have. i do not know how much difference that really makes the people. the argument that it is a job- killing tax increase that the bush tax cuts for the wealth they go to small businesses. not that many small business owners make $250,000 per year. now i will hear from the republicans. these numbers are accurate. if you go to the calculator i mentioned on the kiplinger.com

it shows this. host: we are looking at more of the numbers and the average savings for 2011. let's take a call from oregon. go ahead. you are on the "washington journal." caller: thank you for taking my call. i am calling because when all of this started, i googled want the largest a marginal u.s. income tax had been. in the 1940's and 1950's when everybody seems to think we have a nostalgic for that time, the higher tax rate was in the 80% and 90%. john kennedy in 1964 moved it down to 70%. it then limped along and then reagan dropped to 28%. it seemed like the money was pulled out of social security.

there was not enough in the general funds, said it pulled that out of general -- of social security. what has changed and that makes this a better way of doing business for the country? guest: ronald reagan became a republican because of the high marginal tax rate. he said it was crazy. it is a discussion that we have about having a lot of tax rates in the law or your tax breaks with a lower rate. that is what they try to figure out. that is the entire battle. should the -- there is an argument that the top tax rate is 90%. it is a disincentive to do additional work. if the government will get 90% of that extra $1, why go to work? first of all, it was investment income that would be taxed at 90%. earned income from a job has never been over 50%. it is a major debate we keep having in this country. i have to disagree with you on

social security. i did not believe funds were ever taken out of social security to cover the deficit. unless you are suggesting it has trillions of dollars and that is borrowed money. but honest people look at the trust fund money being used to finance the government and knows it is additional debt. a trust fund money is there. i do not believe they ever pulled money and social security benefits we keep getting higher and higher. host: what is the status of the alternative minimum tax? for people who may have to pay the amt, what do they have to look for? guest: it is the tax that everyone hates. last year, 15,000 people paid it. if congress does not act, 25 million people will pay it. it takes away deductions they do not get exemptions for your kids, no state income tax break. you have a higher income level

to tax, a lower rate than the individual and -- income. everyone hates the tax. it started in 1959 after congress discovered that 155 rich people that made more than $200,000, 150 people paid a net income taxes so they created this parallel tax system to make sure they paid something. they did not indexed for inflation so each year more and more people get caught up. there is a huge standard deduction. each year it expires it goes back to a lower amount and half to patch it up and by increasing the standard deduction. this bill will do it for two more years. tomorrow >>, on "washington journal," a reporter's roundtable.

robin wright from the united states institute of peace discusses the international community's steps on iran. and during samuelsohn on climate change talks in cancun. >> next, q&a with stephanie flanders of the bbc. in the irish parliament debates the budget issues. after that, the annual capitol christmas tree lighting ceremony. >> just-in-time for the holiday season, the supreme court, see spams latest book is being offered to c-span viewers at a very special price, just $5 plus shipping and handling. the the 75% off of the regular price. this is the first book to tell

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