>> this month, "q&a" expands to two ma'ams. to compare it to what is napping the united states, we begin with stephanie philanders, economics editor for the bbc. her job is to lead the bbs economics coverage. earlier, she lived in the united states, where she wrote speeches for then treasury secretary larry sommers. her interviews were flord the studios of westminster live, located across the thames river from the houses of parliament. >> i like to use it to explain the day of an e fend, in the general way, some of the big issues in economics. i like to particularly use it not just to talk about u.k. stuff, although i guess people

reading in the u.s. found it talked a lot about u.k. issues, but also the position in the global economy and a lot about the global economy. they spend a lot of time thinking about international economic issues and i try and explain those, especially now. 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. but i had been at 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 speeches 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 minutiae 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, what's the relationship age? who's older? >> she's 7 years older. i and get disconcerted. 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 herself 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 -- 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 royalties 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. yo to ok 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, fingers 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 uneasiness 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. famously 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 tory 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. >> you're a 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 zone, 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 the 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 news. >> they didn't win. >> they didn't win. >> when was 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 zone 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 geithner, 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 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 wistful 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 videographer 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 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 great 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 stephanomics. 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? >> stephanomics. www.bbc.ko/stephanomics. >> 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 powerful. 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 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 pretty 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 conservatives' power that wouldn't normally have been 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 tony 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 hope that it will pull back together. >> 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 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 academically rigorous department to the kennedy 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 quicker than we thought it might take and a question of timing. >> how old are your kids? >> 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 katherine. 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, airplanes 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 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 conservatives 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. they will notice after -- they will notice that money is not going into the n.h.s. anymore. >> 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. you had a much shallower recession in that sense. but you had a much, 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. >> stephanie flanders, bbc economics editor. thank you so much for your time. >> thank you. >> for 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-and-a.org. these programs are also available as c-span podcasts. [captions copyright national

cable satellite corp. 2010] [captioning performed by national captioning institute] >> in london students riot and residents worry about program cuts and politicians debate the depth of england's debt crisis. this month, "q&a" expands to two programs each weekend 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. >> we have more british programming for you this weekend with prime minister's question time. david cameron responded to concerns about the tuition hikes. he also reaffirmed his commitment to the transition of troops out of afghanistan. our program gets under way this sunday and every sunday at 9:00 p.m. eastern and pacific here on c-span.

>> next, the irish parliament debates budget issues. after that, the annual capital christmas tree lining ceremony. then the impeachment trial of new orleans judge thomas poreous. >> as you work on your documentary for c-span's student cam competition, here are a few tips in our judges. >> one of the things i look for is you, the student. i want to see you and your personality. that helps make your video stand out from all the rest. >> what i like to see most are a real investment in care in the topic that you'll be telling us about. be sure to be interested in what you're telling us. if you're not interested in what >> one tie-breaker for me a lot is the requirement of using c- span video. i am looking for videos were people are looking at content and asking what element of the

c-span video makes the most sense for telling the compelling story that i am trying to tell. >> for all the rules, go to studentcam.org. >> on tuesday, ireland's finance minister explain the details of the emergency budget. it reduces spending and raises taxes. the lower house of parliament must pass the budget before ireland can receive a loan from the european union. the budget will raise taxes by $8 billion and cut spending on child welfare and unemployment benefits. following his statement, the opposition finance spokesman criticized the plan and accused the government of destroying the economy. this event is about one hour 15 minutes. >> may i remind members that the

budget document remains confidential until the minister's announcements and should not be -- [shouting] >> it should not be taken from the house until the conclusion. we will not take the finance ministers statement. a cheann comhairle, this has been a traumatic and worrying time for the citizens of our country. they are concerned that we had to seek external support to help us with our economic and financial difficulties. they are worried about the impact of this momentous and difficult decision on their lives. yet, in fact, even in this most intractable and complex crisis, there are clear signs of hope. amid the turmoil in the financial sector over recent months, it is easy to lose sight of the fact that economic

activity in this country has stabilized. from a drop of 7.6% in 2009, gdp will record a small increase this year. recovery in the real economy is beginning to take shape. as anticipated, this recovery is being led by exports. our exports increased by nearly 7% in real terms in the first half of this year. output in the manufacturing sector was up 12% in the third quarter, while surveys point to continued strong growth in export orders for both goods and services. agriculture and the agri-food sector has strengthened this expansion. the growth is broadly based and is being driven not only by a pick-up in demand in our trading partners but also by the significant improvements in competitiveness we have achieved over the last two years. yes, domestic demand remains weak, as households and businesses continue to work off the excesses of the boom.

but continued export growth will protect and expand high-value employment and stimulate domestically trading sectors of the economy. this, in time, will reduce unemployment, help build confidence among households and firms and stimulate renewed growth in consumer spending and investment. there are signs too that conditions in the labor market are beginning to stabilize. the live register has fallen for the third month in a row, the first time since early 2007. redundancies in the last three months were over 30% lower than in the same period last year. our underlying budget deficit has stabilized at 11.6% of gdp. our tax revenues are ahead of target despite a weak start to the year and our spending has been brought under control. so our actions to stabilize the public finances are making progress. the balance of payments is expected to record a small surplus next year, meaning that the economy as a whole will be paying its way in the world. these data taken together paint

a picture of an economy that is returning to growth after a deep and prolonged recession. for the period out to 2014, real gdp is forecast by my department to increase by an average of almost 2% per annum with real gnp growing by an average of just over 2% per annum over the same period. so if the real economy is poised to grow, why do we need the help of the imf and the eu? the answer is: we need their support to break the vicious cycle that has threatened our national finances and our banking system since the second quarter of this year. following the greek crisis this spring, funding for the state and our banks became increasingly expensive. the rising costs of dealing with the banks that became evident during the autumn and the growing concerns about the prospects for the global economy reinforced doubts among international investors about the sustainability of our public finances and our capacity to fix the financial system unaided.

the joint program of assistance, involving stand-by resources of up to 85 billion, provides us with the firepower we need to restore market confidence, strengthen the financial sector and press ahead with our plans to reduce the budget deficit and facilitate the economy's return to sustainable growth. without this support, there would have been serious doubts about the ability of the state to raise funds at reasonable cost to pay for key public services and to provide a functioning banking system to support economic activity. that is the reality. yes, we are in a position to contribute one fifth of the fund ourselves from the national pensions reserve fund and domestic cash balances. as i said last week, it is not credible to suggest we could have retained a sovereign wealth fund while expecting others to make resources available to us. the policies set out in the joint program, which closely reflect our national recovery plan, are not a new departure. they are, in fact, a continuation of the government's strategy for recovery which has remained

steadfast since the onset of the crisis. over the last two and a half years, the government has worked hard to get its spending back under control. we have made very difficult decisions and our citizens have demonstrated enormous forbearance in accepting the need for those decisions. we have secured an overall adjustment of 14.6 billion. without this adjustment, our underlying deficit would already have ballooned to more than 20% of gdp. the budgetary adjustments we plan for the coming four years are large. but if we postpone them, even bigger and more wrenching adjustments will be needed at a later date. our proposed budgetary measures have been laid out in considerable detail to give certainty to households and firms so that they can plan for the future. it is the government's strong view that the economy can continue to grow while we make the budgetary adjustments

outlined in the national recovery plan. we need to ensure our economic growth is built on solid foundations: that are sustainable socially, economically and environmentally. the government has committed to the introduction of a new national performance indicator to allow a variety of quality of life measurements to be assessed and reported on a regular basis, complementing traditional economic data. this will be used to guide policy development. it will allow the public to assess the progress being made across a range of indicators. the cso is working on the development of this new national welfare index. our attractiveness as a country in which to live is an important part of our overall competitiveness. this time last year, it was assumed that an adjustment of 7.5 billion would lead to a deficit of 3% of gdp by 2014, the target year agreed with our european partners. because medium-term growth prospects have been revised down and our debt interest costs

have risen, this adjustment has had to be revised upwards to 15 billion. in the national recovery plan, we have set out the timetable for achieving this adjustment over the next four years. these targets are reflected in the joint program of assistance. because the european commission has more conservative forecasts for the medium-term, we have been given an extra year to reach the 3% deficit target required under the stability and growth pact. but this changes neither our targets nor our timetable for reaching them. as outlined in the plan, 6 billion of the overall adjustment is being made in today's budget. the scale of this adjustment is demanding but it demonstrates the seriousness of our intent. in simple terms, the gap between government receipts and spending is almost 19 billion this year. this gap must be closed. we got into this position by seeking, with the full support of those opposite, to spread the benefits of the boom across every section of the population. between 2000 and 2008, public spending increased by over 140%, while the consumer price index increased by just 35%. working-age social welfare

rates are now more than twice their rate in 2000. over the same period, the state pension almost doubled. these increases were well ahead of the cost of living. at the same time, taxation was reduced and the proportion of income earners exempt from income tax increased from 34% in 2004 to an estimated 45% this year. all of this was made possible by the very large property-related tax intake during the boom years. in our dramatically changed budgetary circumstances, it is clear the state can no longer afford this level of social provision. the changes i am announcing today are substantial but it is important to keep things in perspective. the current spending reductions set out in the national recovery plan out to 2014 will bring total gross voted current spending back only to 2007/2008 levels. the income tax measures in the plan will bring us to levels prevalent as recently as 2006.

those years were not times of hardship. the reductions will impact on living standards but the fact is social welfare rates are still high in this country and much higher than our nearest neighbor. budget 2011 continues the task of bringing the cost of our public services back to levels that can be sustained by our economy. i do not propose to repeat here today the spending reductions that have already been outlined in the national recovery plan and are set out again in the estimates published today. the only area of expenditure in which decisions have not yet been detailed is social welfare. first, i want to confirm that the government has decided there will be no reduction in the state pension this year. we have significantly increased the state pension over the last ten years and it is the government's view that the security this has brought to older people should be preserved. in the case of working-age rates

of payment, there will be a reduction of about 4%. the government has maintained these payments at a rate which far exceeds total inflation since 1997. the 2011 basic working-age payment will be almost 117% more than it was in 1997. cumulative inflation over the same period was around 40%. regrettable as they are, the impact of the reductions is lessened by continued low inflation. the rates in question will still be slightly ahead of the 2007 working-age rates of payment. the fact is we have built up a generous level of welfare provision over the last decade and though they must now be reduced somewhat, our record of commitment to those in need stands up. over the next four years, further reductions in social welfare spending are unavoidable if we are to reduce the budget deficit. the size, nature and composition of these reductions will depend on the rate of decline in unemployment; the effectiveness of anti-fraud and control measures; and the reform of the benefits system. our number one priority for 2011 and onwards must be

economic growth and maximizing employment creation. that demands improved competitiveness which is at the heart of the social welfare and labor market measures we have proposed. child benefit there will be a 10 reduction on both lower and higher child benefit rates with an additional 10 reduction for a third child only. these reductions will bring rates of payment back to the 2006 rate for the first and second child and to 2005 rates for the fourth and subsequent children with the rate for the third child reflecting the 2004 rate. the new rates are still three times higher than they were in 1997. details of the specific social welfare measures are set out in the summary of budget measures along with a number of other changes to social welfare schemes and entitlements. extra fuel allowance payment in view of the harsh weather conditions experienced in recent weeks, i am allocating an additional 14 million to the fuel allowance scheme to enable a payment of 40 to households that receive the fuel allowance payment.

the department of social protection is putting measures in place to roll out this additional payment as soon as possible and many households will receive this payment this year. we know from the 1980s the importance of equipping the unemployed with skills and keeping them close to the labor market. to that end, we are refocusing the national employment action plan to establish clearer pathways to employment by ensuring that state agencies interact early and often with those who have lost their jobs to provide opportunities for education, training or work experience placements as appropriate. building on the work placements and training places that have already been introduced, i am providing for an additional 15,000 activation places and supports for the unemployed at a cost of about 200 million. the skills development and internship program will provide up to 5,000 places in the private sector with a contribution from that sector of an additional 38 million or so to pay some of the costs of the internships.

the work placement program will provide up to 5,000 places in the public service. the tánaiste announced the scheme in the education sector last week and similar announcements for other sectors will be made by ministers over the coming months. a new community work placement scheme will provide up to 5,000 additional places in the community and voluntary sector. the labor activation measures will be complemented by the extension of the employer job (prsi) incentive scheme to the end of 2011 and by the transformation of the business expansion scheme into a new employment and investment incentive. the national recovery plan provides for reform of the labor market and the removal of barriers to job creation resulting from the current level of the minimum wage and inflexible employment agreements. the aim here is to provide more job opportunities, especially for the young. we will continue to spend significant sums on investment to sustain growth and jobs. the exchequer capital program will amount to some 3.6% of gnp in 2011. this a.9 program will be augmented by the investment programs of the commercial state sponsored

bodies. in addition, the national pensions reserve fund has confirmed it is willing to invest in irish infrastructure assets on a commercial basis in partnership with third party institutional investors. the government will help identify opportunities for the nprf and other private investors. i want to acknowledge the substantial contribution made by public servants to national recovery to-date. in my own department, i see day in day out and at weekends the commitment, above and beyond the call of duty, shown by civil servants who have accepted significant pay cuts. more work is being done with less staff at lower cost. that is real public service reform. to meet our targets, the cost of delivering public services must fall further. savings will continue to be made through planned reductions in the number of public servants and through greater efficiencies in the way public services are delivered. despite the economic constraints, the government has abided by the croke park

agreement on pay, compulsory redundancies and on pension terms. public servants, their unions and their managers for their part must abide by their commitments to pursue flexibilities and reforms in every part and level of the public service. we have made commitments to a continued reduction in the cost of the public service. if the government is to be held to its side of the agreement, those reductions must be delivered. the taoiseach and ministers have already taken substantial reductions in their pay. the effect of the pension levy and the pay cuts introduced earlier this year amount to 28% in the case of the taoiseach and 23% in the case of ministers. the changes in prsi introduced in this budget as they affect office holders will bring about a further cut in their net pay. nonetheless, the government has decided to introduce another reduction in the salaries of the taoiseach, tánaiste and ministers. the salary of the taoiseach will be reduced by over 14,000 per annum and the salary of ministers will be reduced by over 10,000 per annum. this brings the overall reduction in the gross pay of the taoiseach to over 90,000 and in the case of ministers to over 60,000. details to changes in the

government's transportation arrangements and ministers' pay and pensions are set out in the accompanying documentation. the government believes there should be a maximum salary rate of 250,000 in the public sector. only a few office holder posts have salaries above this level at present but there is a larger number in the state agencies. while there are issues about the contractual position of incumbent post holders, i think the position of the minister for finance as a shareholder or statutory stakeholder in these companies can be used to enforce the objective of the maximum salary within a reasonable timeframe. the 10% reduction in the pay of new entrants to the public service contained in the national recovery plan will be applied to the salary rate of those appointed to hold office in the judiciary in 2011. the 250,000 maximum will be applied to all such offices.

a reduced maximum rate of pay of 250,000 will apply to the next president of ireland. i want to record the significant contribution made by the current president who, since this downturn began, has waived a significant portion of her remuneration. i intend to make provision for these reductions in legislation. in addition to reduced pay rates, all new recruits to the entry grades of the public service must start at the first point of the relevant pay scale without exception. although recruitment will necessarily be limited over the next number of years, this measure will ensure a medium- term reduction in the overall

cost of public service pay. the cost of providing public service pensions has increased significantly in recent years. pensioner numbers have grown from 76,000 in 2006 to about 103,500 in 2010, an increase of 36%, while expenditure has risen by 56% from 1,433 million to 2,235 million in the same period. public service pensioners have so far been unaffected by the reductions imposed on serving staff. the government considers it appropriate that those pensioners who can afford to should now share the burden of adjustment. accordingly, public service pensions above 12,000 a year will be reduced by an average of 4%. those on a pension below 12,000 a year, roughly equivalent to the value of the social welfare pension, will be exempted. the reduction will be applied fairly: those on higher pensions will pay most. it will apply to former political office holders, retired members of the judiciary, and their survivors or dependants. public service pensions have

until now been unaffected by the pay reductions. the grace period, under which previous salary levels are to be used to calculate pension entitlements, was due to expire by the end of 2011. this is being extended by two months so as to prevent a log jam of public service retirements in 2011 and to spread the extra pension lump sum costs over a more manageable period in both 2011 and 2012. but i want to make clear that public servants or office holders retiring during the grace period will be subject to the pension reduction i am introducing today. legislation to provide for this reduction will be brought before the oireachtas very shortly. further details are provided in the summary of budget measures. reducing the income of pensioners is an exceptional measure. but these are exceptional times. the government has to make savings and pensions costs are a very significant part of public expenditure. failure to reduce the cost of pension provision could undermine the longer-term viability of the public service pension system. furthermore, it would be unfair

if highly-paid pensioners remained unaffected while serving staff on low pay have had their pay reduced. the new single pension scheme for new entrants, which i announced in last year's budget, will come into effect in 2011. this will bring future public service pensions more in line with private sector provision. pensions will be based on career average earnings rather than final salary; the pension age will be increased; and post- retirement increases will be linked to retail price inflation rather than to pay. this new scheme is a crucial part of the longer-term reform required to put the public finances on a sound basis. the legislation will be published very shortly to ensure that the new scheme can be put into operation for new entrants in 2011. a cheann comhairle, the primary purpose of the tax system is to provide the resources to pay for the services the public expect from the state. our tax system no longer fulfils that purpose well. the line of least resistance would be to increase the rates. but revenue is generated by economic activity: not by increased tax rates.

high tax rates on a narrow base of economic activity may raise far less revenue than lower rates on a much wider base. we cannot have a tax system that damages our potential to grow. that is why the government has decided in the national recovery plan that two thirds of the required budgetary adjustment over the period 2011- 2014 should be through expenditure reductions and one third should be raised by taxation. our income tax system, as it stands today, is no longer fit for purpose. at one level, too few income earners pay any income tax. this year, just 8%, earning 75,000 or more, will pay 60% of all income tax while almost 80%, earning 50,000 or less will contribute just 17%. at another level, too many high earners have opportunities to shelter their income from tax. we must address both these structural defects. our system is also unduly

complex. with four separate charges on income, each rational in its own terms, it contains too many distortions, steps, and discontinuities. our goal must be to create a system that is rational, sustainable and fair, and that delivers the resources needed for essential public services. income tax such a system cannot be created in one budget. but today we take a major step forward in the reform process. in this budget, we will abolish the income levy and the health levy. replace both with a single universal social charge, governed by one set of rules on a broad base. remove the employee prsi contribution ceiling. increase the prsi rate for the self-employed, higher earning

public servants and office holders. reduce the value of bands and credits by 10% in line with overall reductions in incomes. tackle excessive reliefs associated with private pension provision. abolish or restrict many tax reliefs that higher earners use to shelter income unfairly, and target the remaining reliefs more clearly on employment growth. by broadening the base at both ends of the income spectrum, the nominal rates of tax can be kept lower while the effective rate can be raised in a way that is fair to all. in the measures i am presenting today, those on the new reduced minimum wage will not be brought into the tax net. the top marginal tax rate will be kept at 52% for all taxpayers. as i said in the 2010 budget, the universal social charge requires that everyone makes some contribution, however small, to the provision of services. this charge is separate from income tax which is levied proportionately as income increases. the changes made today generally

either maintain or enhance the incentive to work relative to social welfare. for a married couple with no children earning 25,000, their net income will fall by 2.8% or 12 per week. for a similar family with two children, net income will fall by just 1% or 5 a week. we must always ensure an appropriate balance between the rewards from work and income support from welfare. i believe that in these most difficult of circumstances we have struck the right balance in today's budget. our objective is to move steadily in the direction of an income tax system that is fair, universal in its application and more easily understood. this budget marks a decisive step towards a unified income tax system with a minimum of tax shelters, the broadest base and competitive rates. a unified income tax system with appropriate tax credits will facilitate the closer integration of tax with the welfare system. broadening the tax base

in last year's budget, i said high earners availing of tax incentive schemes must contribute more in the current difficult circumstances. the restriction of reliefs measure, which increased from 20% to 30% last year, is already having a significant impact. but we can and must do more. the national recovery plan contains a commitment to the abolition or the curtailment of tax expenditures and to the phased abolition of property- based legacy reliefs. the 16 measures identified in the plan will be given full legislative effect. today, i will abolish or restrict a further nine reliefs bringing the total to 25. full details are set out in the summary of budget measures. many property-based reliefs have already been abolished, but some legacy costs remain. such costs will be further restricted as a result of today's changes. three new measures in particular will be targeted at passive investors: restrictions on the carry forward capital allowances will start in 2011 and impact progressively over the next few years. from 2011, section 23 relief will be restricted to income from section 23 property, and a "guillotine" provision will ensure that all unused capital allowances after 2014 and section 23 reliefs are lost. this last provision will effectively terminate all

property-based reliefs in 2014. again, full details are set out in the summary of budget measures. the base for capital acquisitions tax is being broadened by reducing the tax- free thresholds by 20%. this reduction follows the economy-wide fall in asset values in recent years and builds on a similar measure introduced in supplementary budget 2009. finally, i am increasing the deposit interest retention tax rate on ordinary deposit accounts by 2% to 27% and on longer-term deposit accounts by 2% to 30%. tax treatment of pensions the national recovery plan contains a commitment to significant reform of pension tax relief. today, i am abolishing employee prsi and health levy relief on pension contributions. i am reducing the annual earnings cap for tax-relievable

pension contributions. the portion of retirement lump sums above 200,000 will be subject to tax and the maximum allowable tax-relieved pension fund will be reduced. employer prsi relief on employee pension contributions is being reduced by 50% from 1 january next. the effective tax rate on approved retirement funds will be increased by raising the deemed annual distribution of assets in those funds from 3% of end-year assets to 5% per annum with that distribution subject to full income tax each year. details of all these measures are in the summary of budget measures. business and employment two weeks ago, all political parties in this house supported a motion calling for the maintenance of the 12½% corporation tax rate. our commitment to the 12½% rate was restated in the national recovery plan. i welcome recent comments by european finance ministers who understand the importance of this issue to ireland. there will be no change to ireland's corporation tax rate. better focusing tax reliefs to create more jobs small and medium sized companies

are the wellspring of employment and innovation in the economy. the business expansion scheme has helped companies to gain access to capital investments. but given that job creation and protection is our top priority, it is essential that schemes like the bes and the 3 year corporation tax exemption for start-up companies are targeted and evaluated against jobs created or retained. accordingly, the bes is to be revamped and renamed as the employment and investment incentive. this incentive will come into operation once the necessary approval from the european commission has been received. in the meantime, the existing scheme will continue to operate. under the new incentive, the limit that can be raised by companies will be increased from 2 million to 10 million, and the amount that can be raised in any twelve-month period will be increased from 1.5 million to 2.5 million. in addition, the certification requirements will be simplified. the new incentive will expire on 31 december 2013. i have decided to extend the three year corporation tax

exemption for start-up companies commencing a new trade in 2011 and to amend it so that the relief will be linked to the amount of employers' prsi paid by the company. this change will focus the relief on employment creation, rewarding new companies that create jobs. i have also decided to extend the accelerated capital allowance scheme for energy efficient equipment for a further three years. further details of the changes are set out in the summary of budget measures. bringing confidence to the housing market i am undertaking a fundamental reform of stamp duty on residential property transactions with immediate effect. this has three aims: to stimulate the property market, to provide necessary valuation information and to increase market transparency for the smooth operation of the market. there will be a flat rate of 1% on all residential property

transactions up to a value of 1 million with 2% applying to amounts above 1 million. in line with the base-broadening approach adopted in this budget, i am abolishing all existing reliefs and exemptions for stamp duty on residential property. this means that 1% will be paid on all residential property sales, new or old. if this system had been in place instead of the previous volatile one, it would have lessened the effect on tax revenue of the booms and busts in the market. the information gathered from this new regime can be used to compile data on house valuations to inform a valuation database. this data will bring a greater degree of transparency to the operation of the housing market that has been previously absent. markets operate best where buyers and sellers have reliable information available to them. the new rates will apply to property transfers on or after 8 december 2010. a transitional provision will be put in place to ensure that anyone who has entered into a binding contract to purchase a residential property before 8 december 2010, and who executes the transfer of that property

before 1 july 2011, will not lose out. the tenant purchase scheme allows local authority tenants to purchase their homes at a discount. today, i am announcing a short- term improvement in this scheme. this will allow greater access to tenant purchase by introducing a higher discount for existing tenants. the details of this enhanced scheme will be set out by the minister for housing. fostering compliance within the economy the construction sector has been at the vortex of this economic downturn. it will be some time before the sector returns to a sustainable level of output. in the meantime, the government wants to ensure that existing employment levels are protected and allowed to grow by reducing black economy opportunities in the industry. today, i am proposing

significant reform of the relevant contracts withholding tax regime which applies to contractors in the construction, meat-processing and forestry sectors of the economy. to foster compliance, a new withholding rate of 20% will apply to subcontractors registered for tax with an established compliance record, with the existing 35% rate retained for subcontractors not registered for tax. in addition, the system will be strengthened to enhance its effectiveness and reduce the opportunities for fraud. the proposed changes provide a cash flow benefit to registered subcontractors that will enable them to compete for business on a level playing field. the recent cold weather conditions, once again, demonstrate the benefits of ensuring that homes are as energy efficient as possible. today, i plan to introduce a new tax incentive in this area which will support employment while improving energy efficiency in homes. the new incentive will complement the grant aid that is available through the home energy savings scheme currently available from the sustainable energy authority of ireland. standard rated tax relief will be available on expenditure up to 10,000 on a list of approved works. the total relief available under

the scheme in any one tax year will be 30 million which would allow for remedial works to be carried out on a minimum of 15,000 homes. contractors employed to complete the work must be registered with the revenue commissioners. this incentive, together with the proposed changes in relevant contracts tax will support construction businesses operating in the legitimate economy. full details of the new incentive will be provided in the finance bill. supporting tourism an air travel tax on passengers departing irish airports was introduced on 30 march 2009. the tax is expected to yield 105 million in 2010 despite the impact of volcanic ash on air travel earlier this year. similar taxes apply in the uk, france, australia, new zealand and the us. an air travel tax will apply in germany and austria from january 2011. there have been calls for the abolition of the tax which is blamed for the reduction in our visitor numbers. having examined the issue in detail, i have decided to introduce a single revised rate of air travel tax of 3 to come

into effect on 1 march 2011. but let me be clear: this reduced rate is being applied on a temporary basis until the end of 2011. the position will be reviewed next year and the rate will be increased unless there is evidence of an appropriate response from the airlines. i do not want to see the reduction in the tax being used by airlines as an opportunity to raise their fees and charges. in conjunction with this initiative, the dublin airport authority is prepared to introduce an incentive scheme for 2011, to provide, subject to certain conditions, a full rebate of airport charges for any additional traffic above the current levels. the daa will provide further details of the scheme. indirect tax excise will be increased by 4 cent per liter on petrol and 2 cent per liter on auto-diesel, both increases inclusive of vat, from midnight tonight. in the light of its success, the car scrappage scheme introduced last year will be extended for a further six

months to 30 june 2011. the vrt relief provided in that period will be up to a reduced maximum of 1,250. i have also decided to extend the vrt relief for series production hybrid and flexible fuel vehicles for two years to end-2012. the rate of relief provided will be up to 1,500. the vrt relief for plug-in hybrid electric vehicles will continue at up to 2,500 until 31 december 2012. a review will be undertaken of the excise duty payable for licenses for on-trade and off- license sales of alcohol products during 2011 to ensure that the system is both transparent and fair. i am making the necessary arrangements to ensure that bets placed on the internet by domestic punters are subject to the same level of betting duty as applies in high street betting shops. details are set out in an annex in the accompanying documentation. full details of these measures and related measures are contained in the summary of budget measures.

public debate of our current difficulties is focused, almost exclusively on our banks. much of what is said is plain wrong. for example, it is regularly claimed that the taxpayer will end up bearing most or all of the cost of the banks' bad loans. this is not the case. as the governor of the central bank has previously indicated, over the period 2008 to 2012, the total loan losses of the domestically-owned banks are expected to reach 70-80 billion, equivalent to about half of this year's gdp. loan losses on this scale are unforgivable. they reflect the recklessness of lending decisions during the bubble years and the weakness of the previous regulatory framework. we must ensure they never happen again. what is almost entirely overlooked, however, is the fact that tens of billions of these losses have been absorbed by the private shareholders in the

banks. it is clear there has been no taxpayer bailout for bank shareholders. neither has there been a bailout for holders of banks' subordinated bonds. these bonds have absorbed losses of about 7 billion to date, and legislation to facilitate further burden- sharing by subordinated bondholders will be submitted to the oireachtas next week. there is a limit to burden- sharing. as i said in this house last week, there is simply no way this country, whose banks are so dependent on international investors, can unilaterally renege on senior bondholders against the wishes of the our european partners and the european institutions. that course of action has never been an option during this crisis. it's true the state has had to inject large amounts of capital into the banks. in return, the state will own the bulk of the banking system. the use of funds in the national pensions reserve fund to recapitalize the viable banks is necessary to ensure that these institutions can serve the needs of the economy. the approach to fixing the banks agreed under the joint program will not reverse any of

the government's banking policies. in fact, the very opposite is true. the program builds upon and intensifies the measures introduced to date. the most senior members of the international team negotiating the program have endorsed our policies. this budget is the first installment of the national recovery plan. the plan plots a course to sustainability for our country: sustainable public finances, sustainable public services, sustainable growth, and sustainable employment. it is a sensible, rational plan that is proportionate and equitable in the circumstances in which we find ourselves. everybody pays and those who can pay most will pay most. the plan calls on us all to take more responsibility for ourselves: to contribute to the support of local services and to pay more towards the support of college education. this budget is not captured by any sectional interest. the focus in the distribution of the tax burden, in the reductions in public spending, and in the reforms it introduces

is the common good. i believe that politics in this country must put the common good at the centre of the stage in all that it does. the job of the government on behalf of the state is to ensure that the common good is served: that requires saying "no" at least as often as saying "yes". there has been much public debate about political reform during the current crisis: some of it has been the stuff of cheap headlines; some of it has been constructive and a.18 innovative. any reform proposals, whether they relate to the dáil electoral system, the future of the seanad, the composition of government departments or the size of government, must have as their objective, the pursuit of the common good. since i was appointed as minister for finance in may 2008, i have been dealing with the worst crisis in our history and one that has few international parallels. this is my fourth budget in that period. in every measure i have introduced, on behalf of the government, we have sought to stabilize our public finances. in doing so, we have sought to

protect those most in need. analysis using the esri model has shown that the measures i have introduced on the government's behalf, have been progressive and have distributed the burden of adjustment fairly. it is clear to us all what went wrong in our economy. in the period leading up to the crisis, the construction sector and property prices grew to unsustainable levels. the appetite of a rampant building industry for labor and other resources put upward pressure on our cost structure. as a result, our competitiveness was damaged and we lost market share for our goods and services. excessive public spending on the back of the enviable but transient taxes of the boom added to the overheating of the economy. a huge expansion in bank borrowing for property and construction-related investment was the final and most lethal domestic ingredient in the causes of our crisis. the international financial crisis added pace and severity. the government has accepted that analysis: more should have been done to counter imbalances in our economy. i do not know if any alternative government would have done better. we have taken steps to ensure that the mistakes that led to

this crisis will never be made again. we have broken with precedent in key appointments: professor patrick honohan, our foremost academic expert on banking, is a widely regarded governor of the central bank. mr. matthew elderfield, a highly qualified and experienced professional is our new financial regulator. we have introduced new legislation to reform the regulatory framework for our banks and the central bank has greatly increased its resources. we have set out a program of budgetary reform in the national recovery plan and legislation providing for a fiscal responsibility law is in preparation. this will ensure that the principle of keeping the public finances on a sustainable footing is binding in law. in other words: this government has faced up to its responsibilities; we have acknowledged our mistakes; worked might and main to rectify them and we have put in place the measures to ensure that these mistakes can never be made again. our country must now move forward with confidence and purpose. the underlying strengths of our

economy, built up over many years by our citizens and by the actions of successive governments, have survived this crisis. we continue to have a highly skilled, flexible labor force with one of the highest levels of formal education in the oecd. during the boom, we built a world class road network; we invested in our public transport, our education and social infrastructure. continued capital a.19 investment over the next four years will ensure that the economy is well equipped for recovery. we have developed a highly competitive, pro-enterprise taxation system which

incentivizes innovation and high-value economic activity. the measures i have introduced today will benefit our domestic sectors that have been particularly badly hit by this downturn. we will defend our 12½% corporation tax rate against all comers. the actions we have taken in government over the last two years have helped us to regain competitiveness. wages have adjusted and costs have fallen. more needs to be done but we are pricing ourselves back into global markets and the performance of our export sector is the proof of our success. we know we can have sustained, balanced, export-led growth in this economy. we had it in the 1990's and we have what it takes to win it back if we pursue the correct policies. we have been through a tumultuous two years culminating in our application for external assistance. today's budget is our first step in ensuring that we can get back firmly on our own feet. it is a substantial down payment on the journey back to economic health. we can emerge from this dark time as a stronger and fitter economy to provide sustainable jobs and decent public services for all our citizens. a cheann comhairle, there is every reason to be confident about the future of this economy and this country if we only have confidence in ourselves. i commend this budget to the house. [applause]

[shouting] [bell rings] [bell rings] [shouting] [inaudible] [bell rings] >> you will both have four minutes each. >> thank you, very much. this budget is a budget of a puppet government that are doing what they have been told to do by the imf.

they are doing so so that the state control down the bailout funds now that the country is insolvent. this budget is an ironic way a fitting tribute. they have learned nothing and forgotten nothing and they are destined to continue their mistakes in our last budget. these mistakes are easily recorded, but their consequences are tragic. the government has wrecked the economy and they have put 450,000 people out of court. they have forced over 100,000 of our adult children to emigrate. they have increased party. the government has made it three major mistakes and they continue to make them today.

the two budgets that were introduced to correct in the fiscal crisis or incoherent in policy and undermine their own objectives. the government never learned that you cannot tax your way out of a recession. one can only grow out of a recession. consequently, it was counterproductive and they failed to include measures to grow the economy and protect and create jobs. not a single progressive idea to support job creation for to get our economy growing again. on fiscal correction, the intentions were sound. but his policies were misguided. the more that he did, the worse that it got. then, some months ago, the country became insolvent and to put it bluntly, we went bust. the misguided budgetary policy

would not, on its own, have destroyed the country. the destruction of the country is to to banker policy. think of a small country guaranteeing $450 billion of funds. think of the decision to bail out anglo irish bank and think of the extraordinary importance. a think of the failure of regulation. think of the childlike relief that the banks were telling you the truth. think of the failure to hold anybody to account and think of the failure to keep directors of banks in place and the decision to recruit new management from the second tier of existing management. think of the failure in the investigation. think of the fatal ignoring moral hazard so that all the

shareholders were wiped out and those who borrowed recklessly were punished. of those who lent recklessly were not punished, but were underpinned by the taxpayer. how could anyone have confidence in that system, underpinned by the set of policies, promoted and the government. the financial tolerance was difficult, but the financial problems were manageable. when bank debt became national debt, the position became a sustainable. the current budget deficit shot up to 32% of gdp. the government can no longer borrow. ireland has become insolvent and that is why we have to be rescued by europe and the imf. in case anybody on the front benches or the back benches

thinks that this happened by accident, it did not. it is a direct result of your banking policies which we pointed out to you when he promoted it in the house really pointed them out to you that they were going to cause extra trouble and they have caused this now and that is where we find ourselves where we are. i wonder, do members of the government ever feel ashamed. i felt ashamed when i read the letters of the minister of finance. the first sentence, in bold letters, reads as follows, ireland faces an economic crisis without parallel in its recent history. at the improv -- slow-growth and a fragile banking sector are now feeding on each other.

what a self indictment. your critics could not have put it better. an absolute indictment of your own policies in both of the letters that you wrote to our new masters in europe and in washington. if it was not so serious, it would be kind of funny. when you read the letters, they sound like confessions' written out. it is as if they water boarded you and me to sign the letters, or maybe there were more -- they were more of mark -- more of moderate humility. >> [inaudible] [laughing]

[applause] >> without interruption. >> the current and biggest mistake of the government is to think that the purpose of all the pain and suffering is to restore eiland to where it was. the dream of restoring a last camelot is always a huge mistake. the trips to florida are gone. the subsidized works are gone. the flipping >> you will allow the members to address.

[shouting] >> the flipping of property will not happen again. the public cannot be reinstated. the government policy designed to restore lost * cannot proceed. we need a new ireland. a lean and more generous ireland, where we support strong families and strong communities, where volunteerism is honored and people are honored for hard work. we need to reform the political system. we need new policies to support growth and jobs and this is a flaw in this budget. there is nothing to get the economy growing again. even though your for your plan,

on the 29th of november, the european commission knocked that down to 0.9%. your figures will not work but you are still persisting and proceeding without any growth or job strategy. we need a fair and just society, but the test of any policy is the answer to two very simple questions. does it protect the most vulnerable and society? it is against those objectives that i intend to measure this budget. the minister was very sparse in his veto. it is difficult to know what exactly the full implications are.

if you take the public expenditure first, $4 billion of that our expenditure cuts. two billion is [inaudible] it is difficult to know what the expenditure is. in the olden days, when a budget was presented, we found the figures did not add up and more importantly, there were no policy decisions taken to underpin this cut. i want you to state clearly what the policy decisions are which underpin the expenditure cuts. i hope you are not mistaken, but i want you to come out and explain what the expenditure cuts are. i know that in the green book,

there was -- there were assets of several hundred year and euros. i know that that is rounded off to 660 million euros. there was not a reference to that speech. you were totally silent on this. when i see how things like that, i worry about the accuracy of your figures. he made no reference to reduction. there is a quick look to the back. what are the heavy hits?

[inaudible] [build coles] since the minister of finance did not do it, tomorrow morning, they will spell out the policy decision the finance minister has not done today. well you say that you are obvious, the universal charge --

those with long memories will recall that the minister announced his intentions. this would be the social charge. this charge would be 7.5%. while it would tax in the sense that it would connect the same amount, obviously, it would have a distribution merit affect where it would be harder on poor people. when i was doing the proposal in the last couple of weeks, we ran the proposal by the department

of finance who do an independent costing of these proposals. the department of finance is now in excess of 9%. if one wanted to content -- to collect extra income, one would have to go beyond that. curiously, we talked about reducing this. that is not fair. when you present a budget, you need to be transparent. you cannot fool the people by announcing a universal social charge. >> now the second is -- back in the small print. it wasn't in the speech. in the charge -- in the rate

that the deputy has pointed out to me in the appendix, is it the intent to be revenue neutral or is it the intent to collect extra revenue from the university social charge? that is a very important announcement you should have made in your speech, and you didn't. so there are a lot of things not here in this budget, a lot of things not clear in the budget. >> if you can't be silent, please -- he should be able to make his press tapings. >> i know this is in your tax provision. your tax credit for carers. you have cut the carer's allowance as well as cutting the tax credits. i will tell you, they have it tough, and it is one of the vulnerable areas that you

should have protected, and it didn't protect it. >> hear, hear. >> i am glad you exempted the two old-age pensions, the contribute tri and non-crib tri. but you didn't exempt wid oaths? under what -- what kind of social compass would suggest that widows can afford the cut but old-age pensioners can't? why would you cut blind and carers' pensions? the only exemption that was forced on you is the pension. this is one of the things i don't understand. why a government would be so socially blind as to include vulnerable persons where the total tax take is so small anyway. you would have got most of what you wanted from the main

heading. and yet you hit invalidity pension, blind pension, carers' pension and widows' pension. that is what we mean when we we say you don't really care about the vulnerable, and our policy is to protect the vulnerable on this side of the house. you have cut job seekers by eight euros. it is the same as last year. i think that is worth remarking. child benefit is down by 10 euros per child for the first child and the second child. minister, what have you got against poor children? in your speech you said that there would be an extra 10 euros cut from the child benefit of the third child only . the fourth child won't be cut,

the fifth child won't be cut, the 16th child won't be cut, the 20th child won't be cut. [laughter] [bell sounds] >> did some third child beat you up when you were a young fillet? [laughter] >> i mean what is this thing about third children? i have no vested interest. i am a fourth child myself. >> what happens if after the second child you give birth to twins? [bell sounds] >> your changes, some of them are welcome. certainly someone has to do something to get the property market going again. i think they have taken everything out and put nothing back.

before you leave office, you should call the nana people in and tell them to put $2 billion or $3 billion worth of property on the market at fire sale prices. nobody will get into the market because prices are continually bottom. somebody ought to put a floor on it. so sell a trench of their assets even if you have to sell them cheap and get the thing started again. now your 1% universal levee on all property and 2% over $1 million, that is an onerous enough charge. it means nothing at the moment because there is no mark. i would suggest in the course of the finance billion, if you looked at a capital gains tax

on the family home, it would be less onerous. it is going to hit a lot of people who have paid a lot of stamp duty over the years. if you had the capital gains code, you would hit all those categories. so i have suggested an alternative way of raising the tax. public service pensions, there is a lot of change. a lot of them were announced before. the levees have been announced in the plan. public servants won't like them, but i spoke to a lot of them and at the end of the day they were trading on an equal basis with public servants. so i am not going to quarrel with that. you did nothing for people on a negative equity. we have a proposal, and we won't charge you a pane if you implement it. if you take the people who bought at the top of the market

between 2004 and 2008 and increase their percent to 30 euros a year. that is a targeted relief. you could pay for it by not having mortgage relief for anything that sold from june of 2011 on. you have a cost in your department, and that is the way it works on. anybody who buys from next june on, they are buying at the bottom of the market. they are boig at knock-down prices -- buying at knock-down prices. if you look at adjusts like that, you have all sorts of excise duties proposed. you have proposals on ministers and t.d. salaries, and you have a cap on public servants' salaries. i believe that if we don't start putting our own prospects

and our own salaries, we don't have the moral authority to prescribe tough medicine for others. it is not clear what you are doing with t.d.'s. if somebody is here 30 years, and they re-elected in the first week of march, and if so, are they going to be hit by the new 10%. the phrase in your speech is ambiguous, and i think it should be spelled out. the public wants to know what is happening. it needs to be spelled out, and there needs to be no riddles whatsoever. i thought you might take the opportunity to introduce the changes that you announced on your plan. if it is your intention and negotiateded the deal with the i.m.f. to take the 21% raise up to 22% up to 23% in budget

four. a lot of retail won't like that, but a lot of that is charged to imports. you should try and do something for jobs by taking the lower rate, the 13.5% down to 12% or lower if you can. the lower rate that have applies to all the domestic stuff, the building industry, restaurants, the food trade and bars. hair dressing, the newspaper industry. they are service industries are -- and are high employers. a very small adjustment would get people back to work there. i am not making political points when i say there are a series of supply measures you could introduce to get people back to work. that is one of them, and it would work because if you bring down the cost there, you're going to get people back to work.

>> he think the 8.5% prli race should be abolished. it would save an employer 30 euros a week when they are employing a new worker. you should look at what the economists call supply side initiatives. i know you haven't got millions to spend or billions to spend. but these kind of measures are focused, torgetted measures to increase employment, to get more growth in the economy, and they have the great advantage of costing very, very little indeed. you are slept on carbon tax. you should move on carbon tax

again, but you are moving on excise on fossil fuels. you need to make up your mind. are you going to continue on the excise road or go to carbon taxes? if you go both ways, everybody gets hit twice. a year ago there was an increase in carbon taxes and now you are back to excise taxes. the agricultural and food industry you don't mention at all in your speech. the budget is a bit incoherent and soft on the rich and hard on the poor. the times ahead will be hard, minister. we all know that. and the government has sought to tie the hands of its successors with a series of specific commits over the next four years. if finegail is part of the

government, will stick to the targets, but we will renegotiate other things. i have been assured that the i.m.f. will cooperate with us in doing so. [inaudible] >> i believe there is now a flaw in ireland's approach to europe which arises from the hubris of the celtic tiger years. since we joined the union, the department of foreign affairs has taken the lead role in our relationships with the union and the individual member states. it was quite common for ireland to make alliances with the smaller member states in particular to advance or interests. it was quite common for

informal alliances with these smaller states to be entered to push ireland's interests. there were close alliances with certain countries in particular. over the last decade we seemed to have lost our way and forgotten our friends who protected our interests. irish ministers could clear any bar in the country through how to get rich. i suppose it was easy to forget our friends when that was going on. and when irish ministers were the brag arts of europe, which was easy for our friends to foreget it. our skilled diplomats must again be instructured to build alliances with smates who share our interests role in diplomacy to protect our interests in

europe must be restored. when the major new initiative of euro bonds was being discussed yesterday, i believe it was disgraceful that ireland was not represented by a cabinet minister. i know you are business wii the budget, but why wasn't somebody there? it is the most far-reaching proposal, and it could solve a lot of our problems if the euro bond is accepted. if the prime minister of lex enborg -- lucks emburg, the minister, he could have been there to push the project along which was so much in our vital interests. [inaudible] [bell sounds]

>> noonan without interruption. >> despite a last count call, despite everything that has happened, i do not believe our country is ruined beyond repair. with the recently announced initiative to down size the banks, we can come through this. the foundation stone of everything is certainty. that is why finegail is committed to reducing the deficit to 3% by 2014 and a total adjustment of 15 billion. we want to give that certainty out there, we are committed. once we have certainty, we can build confidence in this country. that is why we are committed to an extensive jobs and growth program. once we have confidence, people will grow in optimism and begin to spend money and invest again. the margin rate of income tax must be kept low, that the

12.3% tax is an absolutely essential component of our economy, and the 13.5% should be reduced to 12% when the standard rate is increased. the economy can grow and jobs created. we believe we can meet our budget area targets for the next two years. and hopefully, after two years of meeting our budget area targets, we will be back borrowing in the bond market at a far less penal rate than the 5.8% negotiated by the government in the bailout badge. we want the i.m.f. out of here. we are an educated, talented, accomplished people, well capable of running our own affairs. at times of crisis we tend to turn to the heroes of the past for instance operation, to collins, griffith ith and

others. i know the members on all sides of the house do that. therefore, i will finish by reference to a quotation attributed to michael collins, which we can all ponder. collins said, "give us the future. we have had enough of the past. give us back our country to live in, to grow in, to love." thank you very much. [applause] [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] >> next, the annual capital christmas tree lighting ceremony. then the senatement trial of

new orleans judge thomas porteous. >> this week on "prime minister's questions", david cameron talks about concerns about recent increases in university tuition and sports programs. he talks about the transition of troops out of afghanistan and efforts to force utility companies to return profits to customers. "prime minister's questions," sunday at 9:00 eastern on c-span. >> new orleans johnson tom porteous is only the eighth judge in history to be impeached. search, watch and share from the c-span library all free. it's washington, your way.

>> middle and high school students, as you work on your documentary for the competition, here are a few tips. one of the things i look for is you the student. i want to see you and your personality. that helps make your video stand out from all the rest. >> what i like to see more in the student cam entries are a real investment and care in the topic that you will be telling us about. be sure to be interested in what you are telling us. if you are not interested in what you are presenting, chances are we probably won't be either. >> one tiebreaker was the requirement of using c-span videos. i am looking for videos where people have looked at the c-span content and say what makes the most sense for telling the compelling story i am trying to tell. >> for all the rules, go to studentcam.org. >> now to capitol hill for the

annual u.s. capital christmas tree lighting ceremony. this year's tree comes from bridger teton national forest in wyoming. children from that state have made 5,000 ornaments to decorate the tree. this is about 25 minutes. >> hello, everyone, and good evening. welcome to the united states capitol's tree-lighting ceremony. i am steven ayers, the architect of the capitol, and i am honored to be the master of ceremonies tonight as we carry on the tradition for the 47th year in a row. part of the tradition is playing festive holiday careless prior to the program. let's give a special thanks to the united states navy band for

being here and helping to create a warm holiday mood. [applause] >> it has been beautifully decorated with more than 5,000 hand-made ornaments by wyoming residents which reflect this year's theme. wyoming, forever west. [applause] >> in addition, the tree is adorned with thousands of bright colorful l.e.d. lights, which are environmentally friendly and save energy.

as is the tradition, the speaker of the house, the honorable nancy pelosi will extend her holiday greetings to you and officially light this remarkable tree in just a few moments. before we get to that big moment, i would like to welcome members of congress, distinguished guests, our capitol hill neighbors, and those of you who are visiting our nation's capitol today. thank you for joining us on this cold and breezy evening. i would especially like to acknowledge the wyoming delegation, senator john barrasso, center michael lindsay, and congresswoman cynthia loomis. each year the historic society produces a beautiful ornament and presents the congress with one to place on this christmas

tree. so at this time i would like to introduce a former member of congress and the president of the united states capital historical society, mr. ron, serason. [applause] >> thank you, steve. thank you again for the opportunity to be here to once again present one of our ornaments to you to hang on the tree. this year we have a very beautiful ornament which includes the dome and the tree. this year it is a metal ornament, you can get this if you get on our website. but again, it is my pleasure to be here and take part in this ceremony, and we are honored to be able to do that. steve, here is the ornament for your tree. >> thank you, ron. >> thank you. [applause] >> that is beautiful, and it is quite fitting that this year's ornament features this iconic

capitol dome behind us. well, for 40 years the department of agriculture's u.s. forest service and the architect of the capitol has partnered to bring a tree to the capitol each year from one of our nation's 155 national forest, which altogether comprise 193 million acres of forest and grasslands in the united states. i would like to specifically thank all of the dedicated forest service staff who have helped us make this event possible. let's all please guff them a round of applause as well. [applause] joining us tonight is jay jensen, deputy undersecretary for natural resources and environment with the u.s. department of agriculture, and he would like to share a holiday message with all of you. jay?

>> ok, it is cold out here. i hope the tiedings of the season will bring warmth to all. it is my pleasure to be part of this ceremony today. speaker pelosi, senators architect and distinguished guests thank you. on behalf of the secretary of agriculture, tom vilsack, we wish to everyone a good holiday. this comes from the bridger teton national forest. this tree is a spruce, and as a forester, i can say it is one of the finest that i've seen. tall and surely strong like the citizens of wyoming. there are countless stories

behind getting a tree like this here, which include the ornaments you see on the tree, selected from over 17,000 hand made ornaments from the state of wyoming. to bring us this tree and the dozens of smaller trees that decorate our offices and buildings, our volunteers have donated thousands of hours, and businesses, schools and other partners have made many donations. this tree symbolizing the holiday spirit of giving, and i would like to extend my gratitude to everyone involved. this tree comes to us because presidents long ago like theodore roosevelt that had the foresight to establish national forests. we sustain those forests so that many generations can enjoy them. we can't do it alone. it takes partnerships and

collaboration to get this tree on its journey here to the capitol. it takes people who live on the land, use it and know it. it takes people who cherish its beauty and rely on its resources to bring a tree like this. we must recognize such an effort that draws on old friendships and builds new partnerships, as we knee more efforts like this to continue building this ground country. so thanks again to the bridger teton national forest, to the people of wyoming and everyone involved in bringing this tree. you have graced our nation's capital with a truly special thing, and hopefully it will remind all of us of the importance of connecting people to the land and the forests. again, merry christmas and happy holidays. >> thank you, jay.

has i mentioned, this tree has been on a tremendous journey. in fact, it has traveled more than 4,600 miles across the country from wyoming. just a week ago the tree arrived here on the west front of the capitol, where our dedicated grounds crew went to work decorating it. didn't they do a marvelous job? [cheers and applause] i would also like to thank our capitol grounds superintendent, who had the tough task this year of selecting one tree from the many beautiful trees found in the teton national forest. next i would like to introduce someone who was instrumental in having the tree come here from wyoming this year, the first time the state has had this honor. please welcome senator john barrasso. [cheers and applause] >> well, it's the first time

ever for wyoming, and it was worth the wait. isn't this absolutely gorgeous? [applause] bobbie are so thrilled you could join us and be here. as mike, cindy and i travel around the state, and the former governor is here. all of us said we need more wyoming in washington. wyoming values, independence, determination, honesty, hard work. and the work that went into getting this here wasn't done by the congressional delegation. it was done by all of you. you are the ones that made the ornaments. mike, cynthia and i were concerned. could we actually get 5,000 ornaments? we were concerned. but it didn't turn out to be 5,000, then it was 10,000, then

it was 15,000, almost 20,000 ornaments made by the people of wyoming. [applause] people said it might be cold. the all-city children's choir of cheyenne, they don't worry about the cold, do you? [cheers and applause] i just want to thank the thousands and thousands of people from wyoming who turned out as this tree traveled through the roads of wyoming, stopping, a,000 in cody, 1,500 in jackson, a thousand in wheatland, all coming to see this tree, because this tree is a gift from the people of wyoming to the united states to celebrate christ's birth. and with that, all of us, all of us from wyoming wish this country a very merry christmas.

thank you. [cheers and applause] >> thank you, senator. next i would like to introduce senator michael enzie. >> i want to welcome the hundreds of wyoming people who came for this. that is a big percentage of our population. [laughter] we are proud of this 67-foot tall tree that came from the western side of our state. it had to be cut and taken into a warm building so it could be impressed down to fit on a truck. it was brought through the state of wyoming, winding up in georgia on thanksgiving and here last week so that we could have this grand celebration. today is december 7th, and that is a day that lives in infamy,

and so it is only fitting that we mention our service members that might be looking at this on television half way around the world. they also might be in places where there aren't any trees like this. and in some places they are sticking a stick in the ground, and they are taking coat hangers and making limbs. and they are taking things out of the boxes that you sent to them to decorate that tree. so on their behalf and on behalf of the people of wyoming, we get to commemorate this tree tonight in such a glorious fashion for wyoming, the west and america. thank you. [applause] >> thank you, senator, enzi. now to help set the proper mood, let me introduce the all-city children's chorus from

cheyenne, wyoming. they will be singing a melody of sings entitled christmas greetings from wyoming. ♪ ♪

♪

♪

♪

♪ [cheers and applause]

>> the all-city children's chorus from cheyenne, wyoming. [applause] >> ladies and gentlemen, it is now my great pleasure to introduce the speaker of the house. i know this is one of her favorite events here at the capitol every year. joining the speaker to help light the tree is daniel sitter. daniel, come on up. daniel is a sixth grader at osmond elementary school in fair view, wyoming. a round for daniel. [cheers and applause] daniel's name was drawn from more than 1,000 students who made ornaments for the tree. he won this trip to washington along with the honor of assisting speaker pelosi in lighting the tree. ladies and gentlemen, the speaker of the house, the

honorable nancy pelosi. [applause] >> we want all those kids back over here as we light the christmas. come on over. what an honor it is to be here with all of you and with daniel, to be here with the senators and congresswoman loomis. i want to recognize the undersecretary for the environment and the united states navy band for entertaining us this evening. what a treat for all of us to see the all-city children's chorus from cheyenne, wyoming. you honor us with your presence and entertain us with your music. to the people of wyoming, thank you for this gift to the nation, the capitol christmas tree. i accept this for the capital

congressmen, the senate majority leaders and from the house as well. senator brown from colorado springs is upstairs. they can see you gathered on the speaker's balcony are men and women in university from walter reed hospital and members of their hospital. let's give them a wonderful expression -- [cheers and applause] >> i told them that you would appreciate their presence. this is the highlight of our year. and the fact that the tree is from wyoming is just such a joy. to the gifts and the lighting of this magnificent tree, and the ornaments, we are showcasing the beauty of the equality state for the entire nation to see. last month as has been mentioned, from the heart of the bridger-toton national

forest, crowds came together to glimpse this tree. parents brought her children to see the capitol christmas tree as it began its journey through 22 cities in wyoming. 22 cities woim -- within wyoming? and towns before heading across the country. the entire state produced to uses of ornaments. the tree even has its own memorabilia, mugs, magnets, pins and patches, t-shirts and tote bags that you will all want to have. it is a source of pride for wyoming. it is a source of joy for the united states congress and for all americans. now daniel has been mentioned, but his sister, mia -- how old is she? >> mia. >> mia is how old? >> she is 13. >> she is 13 as is here with him as well. daniel is the person that we

are honored to share the lighting of the tree with. as we are honored by this gift from the state of wyoming, we are honored each day by the service of our men and women in uniform. with the help of daniel sitter, a sixth grader from wyoming, we are now going to light the tree. but i want the children to come closer. come in fronts of the tree. you have to be in the picture. this could be on tv. [laughter] you have come this long way. why have a few steps separate you from being in front of the tree. ok, daniel. here you go. you're just going to push that up. [cheers and applause] >> good job! ♪

♪ >> thank you all. i know you will want to get your pictures taken in front of

the tree. >> thank you, daniel, and thank you, speaker pelosi. doesn't the tree look wonderful? [cheers and applause] well, thank you all, everyone, for coming tonight and joining speaker pelosi, members of congress, the wyoming delegation, the free-throws service, the navy band and other guests for this 47th annual lighting of our united states capitol christmas tree. thank you and food night. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute]

♪ >> next, the senate impeachment try of new orleans judge thomas porteous. then marks by the president of poland. tomorrow on "washington journal," a reporter's round table with tim fernholz and robin wright, including the tax deal wretched between president obama and republicans. robin rithe discusses the international community's next step toward raun.

and plito reporter darren samuelsohn talks about the just completed climate change talks in can could not. "washington journal," live at 7:00 a.m. eastern on c-span. >> in london, students reuters over higher tuitions. and politicians debate the death of england's debt crisis. "q & a" scomplands to two programs. tomorrow night, matthew police, former member of parliament who now writes for the times of london. >> just in time for the holiday season, the supreme court, c-span's latest book is being offered to viewers at a special price, just $5 plus shipping and handling. that is a discount of more than 75% off the original price. this is the first book to tell the story of the supreme court through the eyes of the

justices themselves. 10 original c-span interviews with current and retired judges. the supreme court gives o'reers a personal and compelling view of the modern court, rich with history and tradition, with 16 pages of photographs detailing the arc tech tire and history of the building. a handsome addition to the book shelf of any non-fiction leader. to order copies at the price of $5, go to c-span.org/weeks and click on the promo book. place your order by december 15th to receive your copies in time for holiday gift-giving. >> the senate this week convicted u.s. district judge thomas porteous of louisiana on four articles of impeachment, making him just the eighth judge in history to be removed. he was a state judge before

winning appointment to the federal bench by president clinton in 1994. prosecutes said drinking and gambling problems led him to accept catch. he was accused of lying to congress during his judicial confirmation and filing for bankruptcy under a false name. the senate voted unanimously to convict on the first article and strong ma majorities on the other thing. here is a portion of the senate trial. this is just over three hours. the president pro tempore: the senate will resume consideration

of the articles of impeachment against judge g. thomas porteous, jr. >> the senate will begin. presented by representative schiff and representative goodlatte. mr. schiff has asked to speak first. mr. schiff, do you wish to reserve time for closing, and, if so, how much time? mr. president, if it is permitted, i'll turn it over it my colleague mr. good lat to speak. when he is finished speaking, we would like to reserve the balance of our time, unless we're required to submit that in advance. the president pro tempore: you may proceed. shifa pharmaceutical plant mr. president, and members of the senate, this is a case about a state court judge from louisiana who had a gambling problem and had a drinking problem and as a result of both of those problems also had

serious financial problems. he was constantly short of money. this judge entered into a corrupt scheme with lawyers and bail bondsmen who could help him lead a lifestyle he could otherwise not afford. he sefnts the lawyers cases, they kicked back money to the judge, and they paid for many of his meals, his liquor, his parties, even some of his son's expenses. he set bonds for the bail bondsmen at the amounts that would maximize their profits. he expunged the convictions of their employees and they also paid for many of his meals, his trips, his home repairs, his car repairs, and lavish gifts. the white house was not aware of this corrupt activity and nominated judge to the federal bench. the judge misled the senate about his background, concealed the kickbacks in graft, waited until after his confirmation hearing but before he was sworn in to expunge the conviction of

another bail bondsmen employee and falsely told the senate that there was nothing in his background that would add vrsly affect his confirmation. unaware of what the judge had been engaged in, he was confirmed. the very reason why the information sought by the senate was so material, whether he had a drinking problem, whether he had a gambling problem, whether he lived beyond his means, whether he engaged in conduct that would make him the subject of coercion was to prevent the damage to the institution of the judiciary that would be caused by putting a corrupt man on the bench. shifa pharmaceutical plant what happened when -- mr. schiff: what happened was all but predictable. the corruption continued. the judge declares bankruptcy, he files with a false name and files under penalty of corruption, falsely states his income, secretly takes out a new credit card, violates the bankruptcy court order by incurring new debt. he files false judicial

financial disclosures stating that he is no more than $30,000 worth of credit card debt when he owes over $100,000 on his credit cards and most pernicious o the interests of pernicious.rests of the spital smells a rat. they don't know about the kickbacks, but they're suspicious about why an attorney with no experience in the case or complex bankruptcy litigation would be brought in so they ask around. and they don't like what they hear. they ask the judge to recuse himself and he refuses. falsely representing that he never received money from the attorneys but once and even that

was only a campaign contribution that went to all the judges of that parish. the case goes to trial and is taken under submission by the judge. while he is considering how to rule, he goes fishing with a lawyer who paid him the kickbacks and hits him up for $2 more in cash. the two partners at the law firm put the cash in an envelope and the judge sends his secretary to pick it up. at the law firm the judge's secretary asks what's in the envelope? the lawyer's secretary rolls her eyes, never mind, the judge's secretary says. i don't want to know. and the relationship with the bail bondsman isn't over either. he can no longer set bonds for them but he can help them recruit other judges who will step into his shoes by vouching for his character, by bringing them together, and he does. now we are here.

everyone around the judge has fallen. the bondsmen have gone to jail. the other state judges he helped recruit have also gone to jail. the lawyers who gave him the cash have lost their law licenses and given up their practices. sh-f -- mr. schiff::litigants wonder if they too must pay a judge in cash and under the table, do the homework, car repairs and other favors to win their case or have their conviction expunged. only the judge remains defiant, claiming his problems are no more than the appearance of impropriety, not actual wrongdoing. he retains his office, his title, his full salary, though he hears no cases and hasn't for years. and if he could just eek it out

a little longer, a full retirement. the judge is a gambler, and he is betting that he can beat the system just one more time. in a moment i'll turn it toefr my colleague, bob goodlatte to, give a detailed presentation of what the house proved at trial for high crimes and misdemeanors committed by judge g. thomas porteous. the remarkable thing about this case is most of the pertinent facts are not in dispute as the neutral report prepared by the senate committee demonstrates, he evidenced on -- the evidence on most of the salient points was uncontested. at the same time the report is not a substitute for hearing from the witnesses themselves, or because that is not possible for the entire senate, hearing from the senators who did. the senate impeachment committee of 12 conducted a remarkable trial, weighed the testimony of

every witness, heard every argument and they will be a great resource to you during your deliberations. to give one example, it is uncontested that judge porteous received $2,000 cash secretly from his attorney and possible while that case was under submission. judge porteous admits this before the fifth circuit. the judge called it a loan that he never paid back. but his counsel has taken to calling it a wedding gift, as if it were a piece of china from the pottery barn. significantly, no one other than defense counsel has ever called this cash a wedding gift. not am mat tow&creely and not the defense himself. this is himself the best counsel at his most creative. the 12 senators who heard the testimony are in the best position to refute those characterizations which are so

at odds with the evidence. one last example before i turn it over to mr. goodlatte, the defense has suggested many times during prior proceedings and may today, that judge porteous has been impeached for nothing more serious than having lunch with attorneys or bail bondsmen. this was represented to the committee of 12 senators after the pretrial deposition of bob creely in which only senator johanns was present. because senator johanns had heard the testimony, he was able to inform the other senators of what creely really had said, as johanns admonished the defense -- quote -- "i sat through the creely deposition, and to suggest this was about a purchased lunch is really, in my personal opinion, very misleading." he later went on to say, "again, i will emphasize please don't try to convince my colleagues that the creely deposition was just about a free lunch. it was not, and i can cite what i heard that day."

the 12 senators who heard these witnesses can cite what they heard during that trial. and they will be a tremendous resource. i would now like to introduce mr. goodlatte of virginia for a detailed presentation of the evidence the house presented. tanned when he -- and when he concludes, we will reserve the balance of our time for rebuttal argument. the president pro tempore: the chair recognizes representative goodlatte. mr. goodlatte: thank you, mr. schiff. mr. president, let me turn to what the evidence showed. by way of background, in the early 1970's, judge porteous practiced law as a partner with jacob am mat -- amato. in 1984, judge porteous was elected judge of the 24th judicial district court in

jefferson parish, louisiana, with its courthouse in gretna outside new orleans. he served as a state judge from august 1984 through october 28, 1994, when he was sworn in as a united states district judge for the eastern district of louisiana. starting with article i, let me first describe what the evidence established concerning judge porteous' curie torship kickback scheme with creely and amato. while he was a state court judge, judge porteous started to ask creely for money. at first he asked for small amounts. $50 or $100, money that creely had in his wallet which creely would give him. at some point in the midto late 1980's judge porteous began to request more significant amounts from creely, amounts in the range of $500 or $1,000. creely resisted giving judge porteous that sort of money. as creely testified, i did tell him i was tired of giving him

cash. i felt put upon that he continued to ask. i thought it was an imposition on our friendship. i told him a couple of times, i'm tired of giving you money. i'm tired of you asking for money. judge porteous needed cash and creely wouldn't give it to him. so what did judge porteous do? the evidence demonstrated that judge porteous came up with what was a kickback scheme. judge porteous used the power of his judicial office to assign creely curatorships and then requested and received from creely and his partner amato a portion of the fees received by their law firm for handling those cases. over time judge porteous received approximately $20,000 from creely and amato as a result of this arrangement. let me show you what one of these orders looks like. as you see here, mr. president, let me just say i know that it's difficult for some of the senators to see these exhibits. at the conclusion of the