agreed to move forward on the tax-cut deal. nine democrats voted against the package. the senate is expected to wrap up work on it early this week and then it moves to the house. also this morning rnc chairman michael steel making headlines on what some members call a surprise move, seeking a second term. that is where we will begin on "the washington journal" with republicans only. what is your reaction to his decision. front page of "the baltimore sun" has the story below the fold. summary of the news. steele not quitting. yes, i have stumbled along the way but always accounted to you for shortcomings. no excuses, no lies, no hidden agendas. he made the comments in a conference call to rnc members

last evening. raising $192 million and spent 206 million according to the center for responsive politics -- "the new york times" notes that during the conference call he did not address questions and did not address ending the year

but $50 million in debt. he was on a show on fox last night and she asked him about the money situation. >> we have resources. i think our last cash on hand beginning of december -- we will do another report in january which will reflect a longer period, december 2 until january 17 -- about 3.5 million -- >> what did you have when you assume the reins? >> when i took over we had 20 million -- 20 million in the bank and we raised -- >> how much did you have two years ago? >> after the 2008 election there was money transfer into the committee from but mccain campaign. >> how much did you have? >> about 20 or some million -- >> now down about 3. >> you can't look at it in terms of where you begin and end. talking two different periods. talking won election where you

had 13 million or $14 million spent on governor races of virginia and new jersey, massachusetts, and hawaii. helping the other party committees pay off their debts in 2009. so you can't look at it and absolute terms. you look at the dollars out as they, and what you do with them and how did get. up to the next cycle. host: republicans only this morning -- morning. michael still seeking a second term. what is your reaction? from henry barber -- from henry barbour.

detroit, michigan. jeff, republican line. caller: my opinion is, i have been watching politics now pretty closely and to be honest, i just can't understand what reason anybody can have for voting republican. why they would think that chairman still -- steele and influence. i am looking for positive things on the part of the republicans and i just can't find anything. host: are you a republican? caller: i am against this, i don't want health care. and don't want this and that. i want somebody to step up and say something positive that we are for. don't just jump on the screen and start crying. we need some results and i don't

know -- influence hud steele, i don't know what this guy is representing and i don't know what the republican party represents. host: are you a republican? caller: pardon? yes, i am a reagan-type republican. but i just don't go waving off into the night and just support anything. i wanted the party to start representing something positive. one time say something positive about what you are going to do in terms of helping the american people because we are in a crisis. host: you and others may be instead to know the first class postage stamp to commemorate reagan will go on sale four days after the centennial of his

birth. james, what do you think on the announcement of michael steele? caller: i think our republican party is imploding from inside and they can't respect the fact that the gains republican party has made legislatively as far as house of representatives and senate happened during his march -- watch. some would say in spite of him. what i am starting to accept as a black republican is unless i am out there champion -- championing these causes a negativity and use my voice that say we have black friends they really do not have use for me. michael steele was told that he was raised money to sit down and shot -- shut up. the man was not picked to lead anything. he was essentially pick to window dress. used him like a piece of gum and shoot him up and he has no flavor now. republicans, we need to understand that we are dealing

with a very clever president. he has given us everything we wanted and now we have two years to legislate. host: what the -- what about michael steele's record? the have any concerns with it? caller: i would like to belief that all the insider washington beltway talk is something reporters like yourself and different people dwell about but every day grass roots run of the mill republicans can identify and as a black man i can identify because my dad tells me if you are on a track team and one lane has 400 meters and the next lane is 400 with hurdles where do you think they will put you? of course, we want to try to critique of this man under standards i did not think was applied before. host: is that your opinion? caller: did it they regain the house under his watch, did they

gain and the senate? host: mississippi. mary, republic, but caller: -- republican line. caller: my comment on michael steele is the republicans used in. i am a republican and a reagan republican. i am from mississippi. in a 2008 black vote did not vote for the republican so they had to get somebody who resemble the black people to get the black people to come over to the republican party and vote for them. they used that man and every way that they can. rush limbaugh and all of them did not want michael steele as rnc chairman. and he went on and defended the republicans the way they did -- it is ludicrous for them to do

that and i am from mississippi. host: ok, mary. we will go on to isaac in california. it's talking to republicans only this morning about michael still's decision to run for a second term. caller: i think it is a good move. michael steele, his record has been not that great, but neither has the republican senatorial committee for the house campaign committee pared i think you bring someone knew and did not have as a visible face. you have other people who don't really have name recognition that he has. i think he was right last night on day greta program, you really have to take everything into context and you really don't get the full picture. just looking at it in the terms of dollars. i think it is a good move that he is going to decide to run for

a second term. host: "the wall street journal" notes there are challenges for the rnc share. they show the correct short -- pictures below. the bush administration veteran. former gop party chairman. and chairman of the wisconsin gop. mr. steele was asked about those wanted to challenge his position on "on the record close " last night. >> i think there are a lot of reasons. my style is a little bit different than most conventional republican party chairman. my style is more grass roots. i am more of a street guy. i love hanging out in board rooms but i prefer to be in neighborhoods and communities. i first trip as chairman -- chairman was harlem. they said, why go to harlem? that is what the votes are. getting out of the comfort zone. host: other candidates who are

mulling a bid, a political operative from iowa who abruptly resigned his post as political director last month has launched an exploratory committee and former u.s. senator norman coleman. massachusetts. johnnie? caller: i definitely agree he should run for another term. he did a good job. that is what he is there for. everybody just has to get together and get this thing rolling. it is not a black and white issue. it is what you have on your mind to do. i think he did a good job for the republican party and thank you very much. caller: i would like to basically say how we can be disappointed with mr. steele, in

the midwest, governor's mansion he took over and michigan and others for what of the states and what he was able to do in the house against the president that we have presently and the machine that has behind him. i don't know how anybody can be dissatisfied with the man and i wish conducting of the best and i hope his reelection campaign works for him. host: what about the criticism some have said about the way he has managed money at the rnc? caller: money is like statistics. it can be manipulated and change to look one way or the other. i hope no one is swayed by the argument. i think his performance is where we want it and i hope he gets a second chance. host: "the washington times" says he has been hurt by repeated press accounts of rnc finance and salaries, salaries to his friends --

caller: well, for the sex club i would need more defining about that. but i would like to state that when you are running the organization the size of this is, there are going to be these little things people can pick at and picket. i would be more satisfied with his performance than maybe him visiting a club that some would consider it not a standard that they would back out to. host: fayetteville, north carolina. go ahead, paul caller: good morning, greta. this is reference to your earlier callers. bequest and should be should kaine be reelected. he lost 63 congressional seats.

and gubernatorial seats. that to be the topic. steele, as far as i am concerned, he is a republican in name only. he is one of those in northeast burma republicans. -- northeastern republicans. i think he did a good job in the midterms and i think he deserves another term. host: why do you bring he is a republican in name only, what specifically -- why do you think he is a republican in name only? caller: i am extremely conservative and he definitely does not fall into that category. but, again know, if anything, he is a moderate. host: is that all right with you, that he represents the party? caller: yes, because we did gain a significant amount of its seats -- congress, senate, and

the governors' seats. but, yes, i am content with him. and i think he should be elected for another term. host: we are talking to republicans only this morning about michael steele's decision to seek a second term as rnc. joining us on the phone is american strategies program director at new america foundation joining us to talk about the death of mr. richard holbrooke who died last night after surgery. i just wanted to begin with a quote in "the washington post" on his death. the very last paragraph says -- as mr. holbrooke was sedated for surgeries, family members said to his pakistani surgeon -- you've got to stop this war in afghanistan. >> for some time i knew he was

skeptical about keep parts of the afghanistan enterprise -- i know he was loyal to the administration and organize a capable of well functioning interdepartmental team dealing with afghanistan. but just about a month ago something called the foreign relations volumes of the united states, for folks who did not know them, the official composites of u.s. foreign policy history written about 25 or 30 years after, when classified information could be incorporated and brought back into the public. these volumes focused on vietnam. i was at this event with an, kissinger, and richard holbrooke one of the keynote speakers because he was on the ground -- doing civil society development. his job today in afghanistan is much like when his career began in vietnam. i asked him about differences

and similarities. he went to the differences, which really has to do with what triggered this reaction, what triggered the government in afghanistan being toppled by the united states after supporting al qaeda and asia before al qaeda but then he went through along list that were structural similarities. i think he was skeptical of our ability to do this and i think he believed the reconciliation approach, beginning to deal with the people we were fighting was going to be the only way out of this. i really wish we had a few more years with him because i think he would have been absolutely the right guy to lead those negotiations and get them to a political outcome. host: what do you think the impact will be on the afghan- pakistan strategy for the administration? guest: i think it is hard to say.

it leaves a huge, gaping hole. i think richard was a tenacious boys for the non-military dimensions of what needed to done -- tenacious voice for the non-military dimensions of what needed to be done. women's rights, self- determination. he wrestled -- the u.s. government can be so dysfunctional but he wrestled this dysfunctional government to begin talking to itself internally. he had people -- people from the department's agriculture, usaid, defense, cia, all in this team that would make a couple of times a week -- i was invited to some -- and he made things happen that one not happening. i am sure somebody like barney rubin and someone else will be appointed to take on this role as envoy, but it is hard for me to imagine that we have anyone else on the bench as results

oriented and results achieving as holbrooke, who has got -- i described holbrooke saying very few times when you are meeting anyone, even senators and presidents and heads of state, the people who make their own weather. he was not a passive guy who waited for circumstances to be good for him. he made circumstances happen. i think that is the kind of person that we need in the afghanistan-pakistan portfolio. and i don't see them. and frankly, i had hoped he would of been elevated in the next two years to take even more of america's foreign policy problems. host: you mentioned who might replace him in that capacity, mr. rubin. who is he and what what his relationship to mr. holbrooke? >> barney rubin is adviser to the state department. one of the leading experts on

afghanistan and pakistan. he has been part of this network of talents, different parts of the u.s. government. he is someone who has been a key adviser and architect, i think, of the civil society approach to afghanistan in terms of how to build a structure is to last. and he knows all the players. it just one of america's top people. i think he is an extraordinarily talented man. there may be others who have great experience, both -- we call of the nation building portfolio, but granular understanding of tectonics and who are very complicated. afghanistan is a place where we are spending about $120 billion a year in a country with $40 billion gdp, engaged in a bit of a war and power struggle internally and also a place where you have a proxy war

between india and pakistan. so, it is an extraordinarily complex, brutal neighborhood and barney rubin is one of the leading experts on the area. host: the president along with his national security team is assessing an expected to release on thursday their assessment of the situation in afghanistan. what do you think mr. holbrooke's contribution would be to that report? guest: i think richard was loyal, but i think behind closed doors, looking 25 are 30 years and classified documents getting them to wikileaks before richard shared in this afghanistan the view, i think he would be saying, on one hand, we are making anecdotal progress but not system at progress in certain areas, getting girls to go to school, helping people feel like they are greater stakeholders and getting greater converging of -- poppy growing

into other crops that are lucrative for folks. when it came as -- came to the broad area of getting to the tipping point, i think richard would be highly skeptical of the over-militarization of our response. that the training of forces and continued lack of confidence and trust in the way the u.s. was approaching is challenged and the clunking this and very large military footprint we have is undermining our ability to achieve success. that is what i guess he would have said. and when the president announces what he is going to announce, i personally think he will be kicking the can down the road a bit. i think richard will be there where joe biden and some others were not, that we have to work much more on the political dimensions of this and there are things we could be doing with

the $120 billion we are spending per year that were not -- to create more of a lasting and an impact was greater traction. host: you knew him well. what do you think his legacy will be? guest: i think he will be looked at as one of the most important and competent foreign-policy diplomats. i was trying to explain to people that it was kind of like the babe ruth of the foreign- policy -- home-run hitter. he was a big thinker. he did not get lost and distracted by the trivial. he was a cultivator and manipulator of power. he was one of the big, iconic forces in u.s. foreign policy on the level of henry kissinger, scowcroft, eagleburger, but -- and those three are still around. richard was younger and

unfortunately gone today. but he was of their league and had an extraordinary impact on america's national security portfolio. he delivered results and he taught people on the left -- the democratic party, on the humanitarian and global just the side of foreign-policy equation how to think more systematically and more results-oriented way than i think people and as our arena often do. so i think he was extraordinarily important as a model of behavior and thinking. a lot of people who don't like richard holbrooke, who find him brusque, egotistical, but i would remind people in my mind he was a chameleon. if he could being what they call a bulldozer but that does not describe him that at all. he could be equally soft, highly diplomatic and complex and move cautiously depending on what you needed to do to get to the result.

host: thank you for your time. richard holbrooke, born in 1949 -- 1941 and died yesterday evening at age of 69. back to your calls. republicans only. michael still seeking a is sick -- second term. caller: how are you doing? my problem with the democrats as far as jiging -- in the republican party, we need some much diversity in terms of ethnicity. i am porter rican, latino american, born in america and i was a democrat my whole life -- for the past five years i have been a republican. i can honestly say that once i looked into republican agenda -- i am a hard-working middle-class american.

i can honestly say this -- that the democrats have it all wrong. the majority of latinos and african-americans don't even know that the republicans were the ones that fought to free the slaves. that was shocking to me. i found out five years ago. host: let me get your reaction to this. this is "the washington times" with a story and they are the only ones who have this quote -- they say he ended the 40 minute conference call by playing what one rnc member described as the race card. what do you think? caller: whoa.

i don't even know where to begin with that. i do not get into the politics of that as far as what he says or does not say. his actions, i would hope, speaks louder than words. the republican party -- we of the minority as far as latino and african americans in the party already and we need to stand -- whoever that we do have as a latino and african americans leaders in the republican party, need to be careful what we say, what we do, how we function and be a shining light. and i really think if people would wake up and really pay attention to the republican party, we are good for america. and that is my personal opinion.

and i thought with my head -- my whole family were democrats. i really had to read into it and i am a proud republican. host: did you vote for john mccain in 2008? caller: john mccain? no, i didn't. pressure from my family -- one of the hardest things i had to do. host: shaker heights, ohio. caller: i would like to say -- when i heard rumors that michael steele was going to announce he was going to resign i was very upset and then when i heard he was going to stay on and one for a second term i was ecstatic. i think michael steele has been a great rnc chairman. as a young, black conservatives i can't understand how people like rush limbaugh and jim demint are jumping down his throat after he has been so successful.

one over 60 seats in the house, more seats in the senate, went on the tour called the "fire nancy pelosi" torte and that is what happened and now it seems like all they did was try to use him after barack obama got elected and now that he has been successful they want to try to throw him out. michael steele is basically to make a black republican that does not act like a white republican and that is one of the things that appeals to me and a lot of people. i remember sitting here with relatives and flicking the channels, some news channels, michael steele comes on and the first thing they say, he is a republican? he attracts young, black men, at least gives them a chance to take a second look. "meet the press" when he went against gov. kaine, he handed him his hat. he destroyed him rush limbaugh

ones to complain? why shouldn't he get a second term? host: let me jump in and asking about what his critics are saying on how much he is spending and how he is managing the rnc money. one thing they point to it is of the currency, the convention for republicans in at 2012 in tampa, rnc has mismanaged the money there, that they spent far more on that convention so far than and the same point of the process four years ago. caller: i am glad they asked that question because michael steele was asked that question when he did the interview with greta on fox, and what he told her and makes sense -- of course, they spent a lot of money in this election because this is a very different year. we had to win elections in governor's races in virginia,

new jersey, michael steele went on a campaign and spent money and won those elections and those elections. we had to have a historic election to take back the house, absolutely historic, so we had to spend money on that as well. was it going to happen out of nowhere? money was going to fall out of the stock? of course, he made gas along the way but they were not -- he made gaffes a long way but it was not so big and major that we still cannot when a historic victory. host: adam in cincinnati. caller: thank you for taking my phone call. i appreciate it. i don't mean to get off the subject of what is being talked about but my concern is so much of these americans right now who are out of work, where their unemployment has stopped, i am one of the americans and i worked all of my life.

my company ended up playing us off, lay off two years. trying to maintain my family and take care of everything and it has been so hard and now the state extension i was granted has stopped. that't understand so much is going on. republicans and democrats, i feel we should all work together as one untried resolve all of this. host: two other stories we will talk with guests coming up. two headlines, "the washington post" has both. a judge it tosses vote -- part of health-care law. congress can't order people to buy insurance, says the judge in that case. we will talk about that coming up at 8:30 a.m. eastern time. up next at about 7:45 a.m. eastern time we will take a look at a tax cut bill. this headline in "the washington

post" -- 70% of voters support the compromise as a whole, a new poll has found. jack on the republican line. go ahead. caller: good morning, greta. you are not going to like what i have to say so you can put the finger on the dump button. i don't want him to be chairman of the republican national committee because he is black. i think we've bent over backwards to accommodate black in this country with the affirmative action and stuff going on for 60 years and it is time we ended it. as a black person i think he is inhibited to come out and condemn some of the black panthers like this creep up in philadelphia that they should start killing white children and i never heard a single word from michael steele condemning this guy.

host: what about the argument that the republicans did capture the house, that they made gains in the senate and michael steele was the chair of the rnc at that time any has that record and he made the point yesterday, according to "the washington times" that he needs to make a bigger tent for the republican party and show diversity. caller: diversity is a terrible for any country. destroying this country and it will destroy any country. host: mark in lexington, ky. you are next. caller: i don't know if anybody ever told you this, but mitch mcconnell got blindsided in this last election in kentucky. kentucky is about 80% democrat and 20% republican. he did not support rand paul and of primary -- he has seen the

light and is coming around. the republican party is virtually non existent in kentucky. the counties, state, democrats controlled. and we need somebody with a mouthpiece like sarah palin who will get out there and motivate. because democrats -- i am a republican but democrats put rand paul in office. host: the senate leadership reporter with "national journal" talking about the senate vote. to joining us on the phone. let's talk about what happens next. when will the senate wrap up its work? caller: they are open to wrap up today. they need to get votes on amendments in time for final passage. possible the vote will not be into wednesday but seems likely it will be sometime this evening and obviously that will send the bill to the house.

host: yesterday we heard from steny hoyer, democratic leader in the house, that they want to make changes to the estate tax provisions. if that happens as the bill have to go back to the senate? guest: if they change anything from what the senate passed it will have to go back to the senate. if you look at it that way, the senate will be in session until berlin next week so of the house does change at the senate will still be around to vote on the version the house has changed and back and go to the president. host: what are you hearing about the vote for this package if they tweak the estate tax provisions? guest: one way or another it seems evident this will pass the house and certainly the senate the deal, without too big a change on the house side, the bill will go through the senate. the boat obviously was pretty strong yesterday, the cloture -- votes obviously was pretty strong yesterday, at 83 to 17.

we will have to see what happens of the house. it may turn out that the house may not change it and all, voting on proposed amendments that would change without altering it. host: we heard senator mcconnell and senator harry reid saying we should be prepared to be in over the weekend, to their colleagues. host: they said they will pet -- pressed through the weekend, mitch mcconnell said, and will probably take until early next week. loading this week -- in addition to the tax bill, tinted -- continuing resolution or omnibus. they still want to vote on a new start treaty with russia, and they still want to vote on stand-alone repeal of don't ask don't tell and the dream at that will give immigrants that came into the u.s. as children a path to citizenship. host: back to your phone calls

about the headlines, rnc chair michael still wants a second term. lewis, a republican, and still, alabama. caller: i agree with the previous caller, a couple of callers ago about why they would not support mr. michael still because he is black. i did not have anything against black people but i noticed after he took over all the letters i kept getting from the public committee wanted me to donate my money, they were wanting to keep supporting these rino, what we call rino republicans at that should be in the democratic party. so, i just quit giving my money that i had been donating for about 35 years every year to the republican party because of that reason, because -- taking my money and giving it to the individual people i wanted to will for that work conservative republicans, not giving in to

everything the democrats wanted. as far as getting the black vote for the republican party, it is never going to happen. because, you see what happened to misses clinton, how they praised her all of those years because of her husband being the first black president, well, they stabbed him in the back and they are still stabbing black people in the back because 90% of the democratic party -- in the black population, which i grew up in one -- and i am not a racist -- that i grew up in, they want to tag all white people as a race this -- as racist so the republicans could never get them to vote for him. host: decision by the federal judge -- as rock klein writes in his column, health care advocates have little to fear from the judge's ruling. district judge henry hudson, george w. bush appointee and part owner of republican

consulting firm has as expected ruled the individual mandate unconstitutional.

springfield. robert on the republican line. you are next. you are on the air. caller: yes, god created us equally. why do you think he created us? to love all. it is not about blacks or white situation. these tax cuts, these tax cuts, ok? you want to raise taxes on these people that are rich, go ahead and do that. the problem is, though, how do you know that these people are not going to be able to hire anybody because you raise taxes on the rich? then all of a sudden -- i don't have a problem with black people, i don't have a problem with white people. but you need to get god first and back into the government system. bottom-line.

host: ronald in britain, florida. talking to republicans this morning and the announcement by michael steele that he will seek a second term. caller: good morning, greta. michael steele is a good man, i believe, but he is not in touch with public -- tea party expressed we want a smaller government and when he got upset because mike castle lost in deleware to christine o'donnell, he did nothing to back her up. i really do not believe he is the man of that we want for the leader of the republican party. host: ok. lexington, ky. last fall and call here. -- phone call here. caller: i have a problem with mr. michael steele is he does not come off very well in

speeches. he bumbles through them. i have a problem also with the way he handled the money -- the statement of democrats and republicans, not particular to mr. steele. host: that was correct in lexington, ky. coming up next week will talk about the health care law and what is next. just one to point out a couple of newspapers. kathleen sebelius -- and eric holder wrote a piece in "the washington post." also the editorial in "the new york times" this morning disagrees with the judge's decision of the individual mandate but praises of the judge for sensibly denying the request in part to stop the law from going into effect.

in "thee editorial washington post" about the judge making a sensible decision on that. ruling in health-care law offers a victory for freeloaders. opposing opinion written by george allen, former governor of virginia. "wall street journal" this morning, obamacare loses in court, a victory for liberty and the constitution in virginia. first we will turn our discussion to the tax deal. we will be right back. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> this sunday, in her first televised interview the newest

supreme court justice elena kagan on the confirmation process, her adjustment to the court, and her relationship with chief justice john roberts. unprecedented on the record conversation, sunday at 6:30 p.m. and 9:30 p.m.. >> just in time for the holidays, "the supreme court, watt sees then possibly this book offer directly to c-span viewers at just $5 plus shipping and handling. a discount of almost 75%. the first book to tell the story of the supreme court through the eyes of the justices themselves. it 10 or original c-span interview with current and retired supreme court justices, including chief justice john roberts, stephen breyer, did -- sounded day o'connor and sonia sotomayor. rich with history and tradition, with 16 pages of photographs detailing the architecture and history of the court's landmark building.

a handsome addition to the bookshelf of any non-fiction reader. to order at the very special price of $5 go to c-span.org /books and click on "the supreme court." use promo code c-span at checkout. place your order by december 15 in time for holiday gift-giving. >> "washington journal" continues. host: back with stephen moore of "the wall street journal." could have attacks deal. what is your opinion? guest: i like it. i think it needed to be done. i applaud the president, republicans and democrats in congress for getting it done. we could not go into 2011 with everybody's taxes going up. everyone agrees the middle-class tax cuts needed to be extended. i think it is important we not raise it on tap -- capital gains

and dividends and small businesses as well. i think the main result will be, greta, is it makes the possibility of a dreaded double dip recession a lot less. for the economy it will be a positive but we should not oversell it because, remember, it just means the taxes that currently in place will stay in place. it does not mean anybody's taxes will go down next year. host: in "the washington times) -- a mist deal in tax cuts. extending it for just two years means we will likely be back here 24 months engaging in the usual political horsetrading while the productive sector held its breath, and, two, at an uncertainty will continue to cloud the economy.

people are saying the economy needs of this, but he is arguing that we see business is staying on the sidelines with all of this cash and they are going to continue to do so because there is no certainty. they have not solved the certainty problem. guest: i happen to agree with the point. the only real flaw is we only extend the tax rates for two years. we will have the whole same debate and congress will have the same debate, too, and by the way, right before a presidential election and that is probably a good time to decide the future of our tax code. i favor a steve forbes-style flat tax, low rate, broadbased. let's be the lowest tax rate country in the world and not the highest. and but at least the next two

years and does provide some businesses with certainty about, and least they know the taxes will not go up. host: is it going to help the economy? guest: yes, it will. i think we will see a pretty strong 2011. i think the economy is picking up. i did not know if you went to the malls -- they are pretty full. people finally feeling like they can spend again, which is good news. i think for the next year or so it means we will have a pretty strong recovery. so far this has been a very fragile and mediocre economic recovery. host: you indicated the republicans should not be too happy about this tax cut deal. what don't you like? caller: i am not sure just freezing in place the tax -- guest: i am not sure freezing the tax rates are enough to keep the economy growing. we should being producing about 250,00 of the 300,000 jobs a month. if we want to bring down the unemployment rate we need much

more rapid growth, much faster reduction in unemployment. that is not happening right now. we have seen a kind of mediocre expansion at best. host: there is talk that when the legislation passes the senate, which could be this evening, it goes to the house and the democrats don't like the estate tax provision that has been put in. steny hoyer yesterday held a press conference where he talked about what significant or non significant changes he may make. i want to show our viewers and get your reaction. >> mr. axelrod says he does not expect significant changes -- >> ag is the issue there is what is significant. we passed a 3.5 million estate tax -- 3.5 individual, 7,000,004 couple, 45% rate and the

proposal is five, five, 35% rate. it seems to me there is some room for change which may or may not be perceived by some as significant. guest: first of all, we should not have a death tax. this should be a death tax-free nation. part of the american dream that you can build up a business or a farm or a ranch and leave that to your children. the idea that the government should be able to keep half of your lifetime savings at the time of death i think is just a horrible idea -- a bad for the economy and the american family. then the question becomes should there be a real lugosi asian of the compromise. if democrats decide to do that in the house and they decide to say they will not go with the agreement -- the whole deal blows up. that is how significant it is. host: there were 80-some of

votes yesterday. guest: in the senate they voted for the package as agreed by the president -- host: looks like they have room. guest: i guarantee if the democrats -- a deal is a deal. if the democrats say we made the deal but now we are going to make changes, i guarantee republicans will say there is no deal -- now trying to change the deal, we will not negotiate under those conditions. host: a political risk you think republicans should take? guest: this is a deal that 10 days ago the president sat down with republican leadership and said -- i do not think this is the most wonderful deal, a lot to object to. i think the president has to

understand and bill clinton made this point when he spoke at the white house a few days ago. conditions for democrats will only be worse in january when the republicans take over the house. they will be negotiating from that point up with a much stronger hand. i spoke to republican leaders in the house and senate and they assured me it will not be in renegotiated. not the way you do compromise. host: unemployment benefits also included. the idea they are just subsidizing unemployment -- real detachment on what it is like to live and hard-hit state.

-- of that is just bad economics. you cannot make the economy stronger by paying people not to work. there is this mythology that extended unemployment benefits helps the economy. you cannot help the economy by paying people is centrally not to be in the workforce. however, if we are going to do this as a humanitarian policy, fine. i am all in favor giving people if they live there -- lose their job in a top economy, three months, six months, nine months of unemployment benefits but we are talking about two years of unemployment benefits. i do not think it is fair for the people working 60 or 70 hours a week in two or three jobs.

10% unemployment rate two years after the president launched his stimulus plan? one thing we can agree on is the $800 billion stimulus plan has been one of the most expensive public policy flops in our nation's history. how can democrats explain after spending a trillion dollars we have 10% unemployment? we were suppose that less than 8% and unemployment still goes up? that is what is exciting about this deal. that we finally agree that spending stimulus does not work. host: charles crowder -- charles krug hammered right to this is the biggest swindle in the year.

guest: charles is a dear friend and i admire him so much. one of the few times i disagree with impaired -- disagree with him. this will stimulate the economy -- keeping the capital gains rate low, dividend tax, making sure business taxes do not go up. but, look, we want to do whatever we can to put america back to work and tax rate reductions is a way to do it. host: silver spring, maryland, on the democratic line. caller: two points i would like to make. this wonderful new to being correct -- newt gingrich strategy telling a lie would be the truth if you say it. uncertainty. these so-called job creators. they want the certainty of having everything they want like schoolyard bullies, their way or no way. i don't have certainty. kids to go to school don't have certainty they will get a job. people who work three jobs at

minimum wage do not have certainty that they will be able to pay bills. they have to get up every morning and do their job. about the stimulus and how it is working, this stimulus -- big banks, businesses, a huge pile of money to play monopoly. they used that money to consolidate their positions, to buy each other out, to get bigger and bigger because that worked so well for us. host: about hoarding cash? guest: we have a story on the front page of "the wall street journal" that american corporations are sitting on cash, a lot of money. it should hopefully be invested in the economy and used to create jobs. i think the reason they are not using the money right now is there is an environment in

washington that has been hostile to business. it is not just all the talk about raising taxes, which i think has hurt investment by businesses, but also the health care bill, it will add a dramatic costs to businesses. i think the most important thing we can do to increase jobs is repealed the obamacare bill. just give an example, a weaker two ago the president announced he will not -- a week or two ago, the president announced they would not drill for oil. one example of how regulations can be such a detriment. we should be doing everything we can to create jobs and instead washington is an inhibitor to job creation. host: companies saying the reason they are holding on to the money is the man does not there, consumers are not spending. guest: partly because consumers are not spending but one of the major reasons they are not spending as they did not have an idea what the regulatory climate

will be like, tax climate, what they will have to pay and health care. as an example, i was in dallas, texas, a few weeks ago giving a speech talking to small businesses and a guy owns a restaurant says the obamacare will cost me $1,100 more -- more per employee you. if you add the additional costs onto the backs of the nation's employers, guess what, they did not have as much money left over to hire more workers. host: oklahoma. mike, republican mind. -- line. caller: i come from an area with large cattle ranches. everybody is land rich. adon't know anybody who has trust set up with all the devices to operate that. it. .

you get an a in economics today. let's say you inherit money from your father, grandfather. what should happen is you should pay a capital gains tax on the money that has not been taxed before. that tax is 15%. that is the way we should tax

this, not at 35%, 45, or under current law, 55%. host: next phone call from mike. independent line. caller: good morning c-span, good morning, america. i have something to say about this tax deal and what the league is doing to the united states. they are withdrawing all of the nation's wealth out of the country and are pumping the nation the pour into the country. once it is all done, kaboom! bye-bye, america. the elite have hijacked the most powerful government in the world. they are using the powers and technologies of that government to benefit themselves. guest: i agree government is completely out of control.

that is why we are in this economic mess. one of the problems in washington is we do not focus on economic competitiveness. what can we do to make sure that america maintains its superpower status? unfortunately, when we have some of the highest tax rates in the world, a legal system that is broken, education system that is broken, health care system that is broken -- i believe all these systems are broken and it is patriotic duty of president obama to do something about it. host: an e-mail -- guest: in 2003 we had the big investment tax cut. people said that that did not create jobs.

actually, if you look from 2003 to 2007, the u.s. created 8 million jobs. that is pretty good. we would love to see that for the next four years. i think the evidence is pretty clear. tax rate reductions are tied to job creation. the periods of great job creation in the u.s., 1930's, 1980's, and even 1990's, were precipitated by tax rate reductions. host: houston, texas. democratic line. caller: thank you for taking my call. there is no question tax cuts create jobs. those jobs were not created here. especially the second tax cut

after 9/11. what did businesses to? they went overseas and created jobs there. there was a 50% tax cut in 2003 after 9/11. how many jobs were created in the country from 2001 to 2008? contrary to what mr. more said, there were 3 million created, not 8 million. what we are seeing, since the people would set up tax accounts overseas. after a certain number of years, they would go to another location. now they are doing it to countries like india, china,

pakistan. what we are seeing is the role of the corporations, by the corporations, and for corporations, and businesses are sucking the blood of everyone else. guest: there is concern of the outsourcing jobs. of course, we do not want that to happen. how do we make sure that they stay here? i would tell you one thing we can do that is a good start. we cannot go forward with the highest corporate income taxes in the world. there was a report last month that said the u.s. had the second highest tax rate in the world. that means we are taxing our corporations at a higher rate than 99 out of 100 countries.

we have to bring that corporate tax rate down. economicident obama's team agreed. in is simple. if you have location a and location b, and you raise taxes in location a and cut taxes in location b, people will go to location b. it is not hard to understand. host: nasrallah. jeremy on the republican line. -- nashville. caller: i am tired of talking about increasing taxes. maybe we should decrease spending. there is so much money that is

wasted in this country on so many frivolous expenditures. no one -- not the democrats, independents, republicans -- no one talks about a decrease in spending. until we get our budget right, this hopeless situation is going to go on forever. we are hemorrhaging money. host: spending -- was that a big issue for you in this election? i think we lost him. guest: it was certainly a big issue with voters across the country. host: so what do you make up something that adds to the deficit? guest: first of all, i had visited many districts and everyone was emphasizing, cut

the spending. you have to do two things to get this under control. you have to get the economy growing again. if we do not do that, it will not matter how much we cut. we do have to concentrate on, one, getting the economy growing. the second step, which begins in january when the republicans take over in congress, is to take an ax to the budget. he is right, there is so much waste in washington. about one-third of the money we spend in this town is going to wasteful, inefficient programs. we have to start cutting out the inventor not work. host: what is first on the chopping block, according to republicans? care, we certainly

cannot afford that. we have to cut that entitlement and start over. then i think the republicans -- at least the ones i was talking to -- were saying, one of the things we want to do as a start is reprogram across the board. every agency is going to have to reduce by 5%, 10%, a 15%. that is what households have been doing this past year. everyone else is having to suck in their belly. why is government allowed to grow? host: that includes the pentagon? guest: certainly, there is some waste in the military that could be routed out. some republicans say they want to increase the defense budget.

that is yet to be determined. host: "the washington post" says -- guest: that is exactly the point i was making. host: baltimore, maryland. david. caller: mr. moore, the c-span viewer is a bit smarter than your average person. i think you misled us. the biggest percentage of our budget is in defense spending. i want to cut everything. including the defense budget. there are places where we should not be.

health care. if someone goes to the hospital without health care, we have to give them coverage, no matter what. someone broke their legs, they are going to the hospital to get a cast. who does the cost go to? it goes to the americans who have insurance. host: and david in baltimore is disagreeing with the judge in it isnia, saying that an actio legal. guest: i do not see anywhere

where the federal government can require people to buy insurance. this decision, i believe, will eventually go up to the supreme court, and will be decided there. there are places where we can cut health-care costs. i agree with you, by the way. i have been tough on republicans. the reason they were thrown out of office in 2006, they did not cut the budget. the bridge to nowhere -- all of these excessive spending projects. they better not screw up this time because if they do, i think there will be a third-party challenge to the republicans. host: david is an independent and he says to cut the defense spending. will it be a mistake if republicans increased defense spending? guest: i am not a military

expert, but so much of the budget will depend on what happened in afghanistan, iraq. we have to win the war on terrorism, that is for sure. as i said earlier, i think there is waste in the pentagon. if we can, we should cut. i do not think any government agency should be immune from the cutting that needs to happen to balance the budget. host: wind gap, pennsylvania. ralph. you are on. caller: i have been a republican all my life. i voted for ronald reagan. i changed. they have the people so mad now, there has to be a third party. it is out of control here. are they really that done in washington, d.c. that they do not see what is happening? i do.

guest: i saw that everywhere i went over the campaign season. he is indicative of the way so many americans feel. that is why we had hundreds of thousands of people on the mall. people are sick of the bailout, and government takeovers, they are sick of the debt. the voters have basically said to republicans, we are going to give you one more chance. if they do not succeed, i think there will be a third party that gets the government under control. host: another tweet from a viewer -- guest: i do not know the details of what you're talking about.

by the way, the excessive cost of public employees is a big problem, not so much in washington, d.c., but in states and cities across the country that are going bankrupt -- we have to rearrange the outrageous pension costs. there was a story a month ago showed the average public employee in the u.s. gets twice what a private worker gets because of compensation. we cannot do that. host: tampa, florida. nardo, go ahead. caller: when it comes to the fiscal situation we are in now, we know that the republicans had total control before this all started.

right now, we have people like making theore democrats look so bad, what about republicans? guest: the reason we got into the economic crisis in the first place was, in part, because washington was spending and borrowing too much money. then barack obama comes in and barrault's even more, making the crisis steeper. i think everything we have done in the past two years has made the crisis worse. all we have had to show for this spending is more debt. host: one of the ninnon-partisan agencies that looked into this legislation said the opposite.

the stimulus bill helped the economy, unemployment would be a lot higher if they had not had that, the american people actually made money from t.a.r.p. guest: putting aside t.a.r.p., we know we spend all this money and we lost 2.5 million more jobs. two years after we did this, we still have a 10% unemployment, which is a catastrophe. if you include people who cannot find full-time work, unemployment is closer to 20%. whatever we are doing in washington is not working. host: butler, indiana.

walter, republican line. caller: it is great to hear you. you are a deacon in the fog. -- beacon in the fog. i have been and longtime conservative. ronald reagan who was not much of a republican at first but he changed and he earned it. i have helped to party members diligently get a elected. i have told my daughter this is our last shot to get it right. any republican that goes along with this deal -- i am shutting the tv off, i will be watching cartoons and i will be done with the whole thing. it is an abomination going on. guest: what is it that you do not like about the deal?

caller: i do not like anything. i do not like the premise that people feel that we owe the government money. i do not like the idea of a nanny state, free handout. we are giving away the house, we are borrowing money, and what i want to know is -- let any republican stand up and prove themselves. we are going to continue to have to borrow from china. at some point, i am going to leave this thing along, i am disgusted. guest: well, sir, do not turn off c-span. i understand your frustration. americans are turned up to the idea of this -- off to this idea

of dealmaking. what i have said to conservatives -- i do not think this is a wonderful deal. if i was president, i would have done something differently, but i am not. president obama was not going to sign anything that cut taxes more than this does. this was the best we could get. if you want a flat tax, you want to bring down government spending significantly, then we probably need a regime change two years from now. i think barack obama believes in the power of government, believes so much good in the country comes from the government, rather than the private sector. host: john is in traverse city, michigan. independent. caller: grateful for c-span, grateful for people like stephen

moore. i consider myself to be a conservative independent. i would cite the fact that the cost of an american worker is exceptionally distinct from other places. there is an awful lot of regulation. yes, our safety should be looked out for in various ways. in any case, i should let you go.

i want to express my appreciation for you saying, war on terrorism, rather than war on terror. i am tired of that. host: thank you. moving on to fred in charlton, texas. caller: thank you for c-span, and merry christmas to all. number one, the guy from butler had some great point. everyone should take that to heart. one of my heroes in congress is senator tom coburn of oklahoma. whenever the government will expand, he makes sure to debate it. the other thing i was wondering about, back in the 1990's, there was a lot of push for people saying, the u.s. is the greatest country in the world. we need to export jobs to the

rest of the world. i think congress did all that, but that is why the law changed. maybe i am wrong, but do you have any input on that? guest: i do not think we should be exporting jobs, that is for sure. we should be importing jobs. the most amazing thing about the united states, starting in the 1980's, when ronald reagan turned around the economy, we created about 40 million new jobs in this country. we created more jobs than all of europe and japan combined. we had the formula right. of texas, keeping government under control, not have an excessive regulations on our businesses. we better fix it now because we cannot go forward with one out

of 10 american not able to find a job. i do think that means keeping the tax rate low. i think this will provide some jews for the economy, and fingers crossed, we should see a reduction in the and on employment -- in the unemployment next year. host: next phone call. caller: good morning. you keep saying that the corporate tax rate is 30%. these corporations have teams of lawyers and they use every loophole in the book. now on the other side of the spectrum, government sucks. i could walk down the street and not have any problems during the day. what happened when all the police disappear? somebody pays for that. border patrol.

somebody pays for that. government does a lot for us. people need to wake up and smell the coffee. all i see is rich people taking their money and sending it overseas. i do not know how you can sit there and say that rich people need money. i go to a gas station and i have to buy only $5 because that is what i can afford. the guy next to me with a three million-dollar house rolls in next to me with his homer and has no problem. -- hummer and has no problem. host: if this tax bill had not gone through and your taxes went up to a higher rate, would you be ok with that? caller: absolutely. the rich guy would pay his share, too.

this is the way the world works. that person is dead, you just got free money. guest: by the way, if you want to pay more taxes, you are allowed to do it. an average family makes $60,000 and $80,000 a year. they are going to save about $3,000 a year from this. most families -- it is a hard time to make ends meet. the idea that they have to pay another $2,500 in taxes next year is not something that they like. most americans agree this will help stimulate the economy, but i agree with this gentleman, even though he is a democrat, that we need to get rid of the

loopholes. we can get rid of all of these loopholes in the corporate system and lower the rate, and it will be more efficient. i was happy to see president obama mcnabb case last week. maybe this is a time to restore this tax system. host: taking a look at how this deal would break down an average savings in 2011 for income earners. you can see it goes all the way down to if you make between $10,000 and $20,000 a year. guest: those that make under $20,000 a year do not pay income taxes, you have to remember. host: next phone call. lee from wisconsin.

caller: good morning. there is a movie called "capitalism, a love story" and you will see your guest coming out against democracy. if you agree with him, he is a fascist. guest: i did have a cameo in his movie. he called me and asked me to do it. i think the statement i made was, i believe that it is more important we have a free-market capitalist system that democracy. there is an old saying that democracy is just two wolves just of as sheep discussing dinner. i think what made us so great, we have been based on a system of free market and free enterprise economics, which is why we are the richest country in the world. i did not say i was not for

democracy. i believe in our system. it is the best in the world. i was simply saying that we have to preserve our free enterprise system, which i believe is under assault. host: fort hood, texas. dalton, republican line. caller: i would like to say thank you to the guests for being here, but also i am for the tax cut because it benefits our soldiers who are fighting. and one more question. why is it that they can not lower the prices of automobiles, furniture, to a place where the people who have what little money now can afford something? like myself, i would love to buy a house but i cannot afford it. i feel like they are trying to a home that is selling

for three times as much. why can they bring down the guest: for the last few years, inflation has been under control. we have the lowest level of inflation in 30 years. i do worry, because of this program, -- i have heard you talk about this on the show, quantitative easing -- they are shoveling $600 billion into the

economy. one of my worries is, as the economy starts to expand, i worry we will start to see rising rates of inflation. not catastrophic levels, but going from 1% to maybe 3% down the road. gas prices are starting to rise, food prices are starting to rise. i would hate to see castro back up to $4 a gallon. -- gas go back up to $4 a gallon. host: stephen moore, thank you for being here. coming up next, we turn to that decision from a virginian judge

who ruled the individual mandate in the new health care law is unconstitutional. first, a news update. >> more reaction coming in from around the world on the passing last bite of richard holbrooke. this from nato's secretary general. he noted ambassador holbrooke's accenture role in the agreement that ended the war in bosnia. he went on to say, as president bush's's special envoy, he recognized we have to keep our freedom by engaging in conflict. attending the meeting is vice- president biden, secretary of state clinton, defense secretary gates, and top intelligence officials. tomorrow, the president turns

his attention to job creation as , amongs with 20 ceo's them, intel, cisco systems. stocks are set for a modest higher opening this morning. delaware futures are up 22 points. -- dow futures are up 22. . >> it is hard to get here, it is hard to leave here, but the senate continues. >> hear from retiring members of the house and senate on c-span. more than 160,000 hours all online, free. it is washington, your way. >> students, parents, teachers, with the studentcam competition one month away, we are offering

six webinars to get you prepared. to sign up for a session, up at c-span.org. the competition is open to middle and high school students. for more information, go to studentcam.org. host: ethan rome is the executive director for health care america now, a national grass-roots coalition court of more than 1000 organizations in 46 states. your group spent $46 million in the past few years to win passage of this health-care law. your reaction to what the judge in virginia said yesterday? henry hudson wrote, "neither the supreme court nor any -- --

guest: there are a couple of things the judge suggested. the most important thing, from our perspective, is he did not issue an injunction. so implementation can move forward. the law can move forward, and we can move forward in getting quality, affordable health care for everyone. he did rule that the individual mandate was unconstitutional. what he really did was give a green light to insurance companies to deny health care based on pre-existing conditions. that is what this law is about. this law is about stopping the worst of insurance company abuses. host: all the papers say that this will go to the supreme court. if the court rejects the individual mandate, which many democrats have argued is at the

core of this health-care law, how can the law then provide -- even if the rest goes through -- but without that individual mandate, how can there be affordable, quality health care? guest: while the mandate is key to strong consumer protections in this law, it does not guarantee that without it we cannot have those. the most important thing is, this will be resolved by the u.s. supreme court. we do not think this legal challenge will be successful. host: why not? guest: it is a meritless case. his clock does not hold legal merit. what he has fundamentally said is, not purchasing health

insurance is not an economic activity, and we think it is. anytime somebody decides not to purchase health insurance, they are asking the rest of us to pay their health insurance -- to pay their health care cost. that amounts to $1,000 on average per family for their coverage. host: the supreme court has ruled in the past on this kind of law. what gives you hope that they will approve the individual mandate? guest: there are a number of cases, dating back to a court case from 1947. the key thing is there is no precedents are around this so- called activity. when people make the decision not to have health insurance, they are making an economic decision to ask their neighbors

and taxpayers to pay for their health care. host: this is what has been said about previous supreme court rulings. guest: i think there is a long,

legal history, different elements of the commerce clause. our fundamental belief -- just like other significant pieces of consumer legislation -- this will be ruled constitutional. two judges already have. there have been 15 cases that have been brought against this law. in 13 cases, they have been thrown out on procedural grounds, and in two cases they were held up as constitutional. yesterday was mixed. we expect to continue to win. host: republicans are asking that the it ministration side with them and ask that the supreme court -- administration signed with them and that the supreme court take this up immediately. guest: i do not think they will do that. this does not take effect until

2014. there is no reason to fast-track this case. what was interesting is, judge hudson did not issue an injunction, so this law can continue to be implemented. there is no reason to fast-track test. when we talk about republicans though, what we have to keep in mind is this, they have no health care plan. they have never proposed a single measure that would take on the insurance companies, and eliminate the worst of insurance company abuses. they would rather go to court and protect the average consumer. we think that is wrong. "the washington post" also says this -- in "the washington times," they

write about the bell and howell language was put into the bill. and how the language was put into the bill. do you think democrats made a mistake? guest: no, i do not. i think the judge is making a mistake about speculating what folks were doing when they

enacted a law. the judge is making inferences about what people were thinking when what he ought to be doing is making judgments based on what the law said. host: jacksonville, florida. you are next. caller: i agree with the caller back. it is pretty ridiculous. any decision the president has made has not been a good one, according to the media. we do not want to talk about any of the things that he has done that is for the people. the media portrays that people do not want this. who does not want health care for their children?

that sounds ridiculous to me. the media, you all portray the president as a stupid man who does not know anything. guest: i think the caller is right. two things. all the different accomplishments that this bill has done have been glossed over by the media. let us be clear about what happened yesterday. this is not about the so-called mandate, commerce clause, or any of these arcane legal issues. yesterday was about going against the ban on pre-existing conditions, stopping the worst of insurance company abuses. three-quarters of the public believe we should stop insurance from the nine us care. that is what this lawsuit went after.

-- from denying us care. so when the republicans declare this as a victory, they are standing with insurance companies and against consumers. host: margie from california. go ahead. caller: i was wondering if you were aware of the act of 1861. guest: with no constitutional authority to so, congress created the district of columbia. it took our organic constitution and replaced it with a corporate constitution. america is not even a country, it is a corporation, and that is what this health care is about, control of our schools, food. every aspect of our life is under this. this is not a bill for the people. this is not even a country and people need to look into this.

the united states is a corporation and it is all for the corporations. guest: i was not around in 1871, so i am not deeply familiar with what you are talking about, or to the fact that we are in corporation. here are the facts. this stands up to the insurance companies and stands for the consumer. we should not be allowing insurance companies to deny our care, to drop us when we are sick. that is what this law does. it stops those scenes from happening. what this lawsuit does is it tried to get in the way of the reform from being done. host: we want to incorporate the other side of this. with me on the telephone is the virginia attorney general, can coach in l.a. -- ken cuc

chinelli. what is your stand on this case? >> the white house has expressed great confidence they are going to win the case. maybe they will. but the uncertainty created around the country, because of the extraordinary burden this bill places -- particularly the insurance portion -- which is the centerpiece of this case, does not resolved itself quickly. ast's get to the end point quick as possible. that is a discussion we're having right now. we will work with them the best we can to achieve that. host: so when do you expect the

justice department to make some sort of decision? guest: they have to appeal in the next month. that step has to be taken, regardless of acceleration of the case or not. so i think discussion should be concluded in the next 30 days. host: if the justice does not agree with you to accelerate the case, will you ask yourself for the supreme court to take this up? guest: we will speak to our colleagues in florida. there are another five, six states that will be getting in in january. by the end of january, over half of the states will be plaintiffs in various cases. part of what the founders had in mind is that states would keep

the government in check when the overstepped their boundaries. host: will you go ahead and cover this if states decide they want to? are you inclined to do so? guest: i certainly think it is important. 99.9% of the time when we are in a court room, the department of justice is in the same court room, we are partners. they are typically our partners. it is a great partnership. this is the the one occasion when we are on opposite sides of the table but we want to maintain the same sense of civility we have with them because of the nature of the rest of our relationship, which is all positive. we are going to hold back doing

anything independently until we know how they would like to proceed. host: ed klien in "the washington post" writes -- >> certainly, there were three elements of the ruling. one, a decision on constitutionality on whether the government can order as to buy insurance. the judge ruled that was unconstitutional. the second was the government's

fall back, the penalty you had to pay if he did not pay the mandate of health insurance. congress had the power to tax. the judge ruled that is not a tax. those are the two constitutional rulings. you are talking about the remedy. that does not affect the decision on constitutionality. for the long-term implications of the power of government, set aside health care for a moment, because ultimately this case is about liberty, not about health care. if the government can force you to buy a product, in this case insurance, there is no limit to what they can do. on those key elements, the judge found the exercise of power and unconstitutional. i think every court will find a different flavor of remedy.

there are a million different permutations of what courts could do as a remedy once they find the enactment itself unconstitutional. that does not concern us as much. the next court up will do something different. i am sure the supreme court will do something again differently. that is the one that will ultimately matter. host: mr. klien also writes --

>> i think the legislation, what it tries to achieve here, clearly, could have been done constitutionally -- i say simply but i am not advocating this. if they had imposed a tax to pay for the cost of their new entitlement -- but they were not willing to vote on a tax bill. this was all a creative evasion mechanism for the people in congress to try to go out and say, i did not vote for a tax increase, which is event for what they said when the bill was processed. as they began to lose confidence on the commerce clause defense, they needed an alternative argument.

then they said, well, it is a tax. you cannot have it both ways. on that question, every judge, four of four, they have ruled against. the only thing that they have one on is some judges granting them the ability to order american to buy a product, of the individual mandate, is a program under the constitutional powers granted to congress. but that is a highly debatable question. i recognize that this is an unprecedented legal position. it is an unprecedented exercise of power by the government. that is exactly the type of case the supreme court takes, as justice breyer said.

i expect them to ultimately take and decide this case. host: finally, a political question for you. brian moran accused you of using this suit as a political spring board while also promoting the health care market in virginia, which would benefit you. guest: apparently, he does not appreciate the importance of the constitution, and i do. that is the first thing in my oath of office. we are protecting the constitution. host: any other political aspirations? guest: not at this time, rather than maintaining our survivability. we are taking a beating from people who like this kind of command and control government. we made a decision to proceed, based on the law and constitution. i believe we were right. the court has expressed that

they think we are right. whatever the political consequences of that are entirely secondary to the fact that this is the right thing to do. host: virginia attorney general, nelli, thank you for being with us. guest: first of all, 12 of those cases, they were thrown out procedurally. second, you asked the attorney general about politics and his aspirations. yesterday, the first thing he did after this ruling is he went out on blog ads asking for donations. this entire fight has been politicized and it is all about which side you are on. there are two sides. the insurance company or the

side of consumers. he is fighting for insurance companies, for their ability to deny us care, jack up our rights, and act as they please. this puts an end to insurance company abuses. it lowers insurance company costs and tells insurance companies that they are not free to run roughshod over american consumers. host: aspen, colorado. bruce, good morning. caller: happy holidays. i would like to talk directly about a pre-existing condition and why this government seems to be so anti-small business. i spent 14 years with one company and then i decided to go out on my own. i am allowed to use cobra, extension for 18 months. the minute my cobra runs out, big health care is willing to

deny me coverage for a pre- existing condition. for those 16 years, i suffered from kidney stones. i currently have four employees now. as of october 1, i end up in the emergency room, and for those five hours, on a sailing trip, my bill is $9,800. i will never understand how this government sees that small business will ever survived when they continue to pander toward big health care -- and i am speechless now. host: mr. rome? guest: what you are expressing is what so many americans are expressing. insurance companies are in the business of making excessive profits, of paying their ceo's

outrageous salaries. this law stops the worst of the insurance company abuses. it also helps small businesses by providing tax credits for small businesses, beginning at 35%, going to 50%. this law stands up for consumers. it tells the insurance companies that the days of them running roughshod over consumers and businesses are over, and that they actually have to provide health care. host: clinton township, michigan. dorothy, you are on the air. caller: good morning. mr. rome, you point out the fact that pre-existing conditions, children up to 26 can stay in their parents' health care. what you failed to mention --

just like the attorney that was just on, saying that it was not a tax. well, yes, it is a tax. just like they said there were not death panels. now you have people coming out saying there is going to be redistribution continue have people saying you are too old. there is all that kind of stuff in there. they will say anything to get what they want passed. like, like, live. once it is passed all the truth comes out. guest: this does not take away

our rights as consumers or recipients of health care. what it does do is keeps health care and -- health insurance companies from jacking up our rates or denying as health care just because we've been sick. for the first time it uses government to protect consumers, to guarantee we get the health care that we pay for and deserve. host: next phone call from oklahoma city, eleanor, democratic line. caller: i hope can is still watching. medicare is absolutely nothing but medical insurance, and if you are 3 years old, someone's got a medicare premium out for you.

the government forces every living, breathing person who works to go into the medicare system. if the fair -- if the fear is you can't force someone into this health care system, you cannot force them into medicare. and older people are losing their -- what has happened is the wealthy people have persuaded them to go through this building and it's fascinating how the marketing campaign works. the people who were applauding what the judge did yesterday, you've got the thing wrong, greta. he struck down a provision of aid. you've got people out here cheering about something that did not really happened and they're cheering about something that will make them lose their

medicare. if i filed a lawsuit tomorrow and as a judge to strike down medicare based on what the judge said yesterday, he has no choice. guest: first, you are right about what happened yesterday. the judge did not throw out this law. what the judge did do is issue a so-called opinion about the -- issue an opinion about the so- called mandates. the attorney general, the first thing he did after this ruling was to go help raise money for his yet to be announced campaign for the united states senate. the judge who issued the ruling and actually has a financial interest in a campaign and lobbying firm that lobbied against the health care law. that is the corruptive influence of money and politics. insurance companies are using their money and influence to run roughshod over consumers and 10 in the way affect reforms that will protect consumers.

-- in the way of reforms that will protect consumers. all of the mumbo jumbo, so many of us do not understand that. what we understand is that each and every day we get sick and we worry whether or not the insurance companies will pay our bills. we have to call our insurance companies and fight them just to get the care we deserve. we should not have our care denied and they should not be able to jack up our rates. families ought to get what they paid for. that is what this lawsuit does. this lawsuit one after that. that is what the republicans are all about. we're going to win this in the end and finally this law will be able to fulfil its promise to provide quality health care for all americans. host: there is a story about a judge arguing against the health care bill.

this person tweet in -- guest: it is a really good question and i cannot speak to why the judge did not recused himself. this affect is that the judge had a financial interest into the lobbying role the was put in the health care lot and then yesterday he ruled against this law. host: will what you're doing continue to move this forward? guest: we will continue to put pressure on lawmakers and we will defend this lot and we will most importantly be about the business of implementing this lot the federal and state level. pre-existing conditions are banned for children. people have free preventive care. adult children between 1926 can stay on their parent plants --

between 19 to 26 can stay on their parent plants. host: linda in virginia disagrees with you here saying -- maybe she agrees with you a little bit there. guest: she may well agree with me. the important thing is that this law begin the process of controlling costs.

what she is right about is that insurance companies be it in ways that are outrageous. they are not about providing for consumers. they are about making outrageous profits for themselves. their rates have gone up five times the rate of wages and two times the rate of medical inflation. there is no basis on the rates that they charge. this lot is the beginning of controlling costs. it is the beginning of creating the transparency that will force the insurance industry to be more competitive to give consumers more choices and make health care more affordable. host: pennsylvania, maria, you are on the republican line. caller: it is a shame. it seems like we always put the cart before the horse. the situation with pre-existing conditions as a workable thing, i agree with that. i totally and -- is a horrible thing, i agree with that. i totally understand. the biggest problem, though, is

just like the previous caller, i agree with her. you cannot have people forced to purchase something they do not want. there are plenty of people in this country that do not even believe in the medical system. they take care of their health and medical-their medical health it by other means. they think doctors are crap. and what you do with those people? you have to uphold the contra -- constitution first. people's rights need to be protected. you cannot tell people they have to buy health insurance when they have plenty of other things they have to spend money on. guest: i support the constitution and i support this law and asking everyone to carry health insurance. what this law does is ask everybody to pitch in and take responsibility for their own health care. what the law says is simply this, if you do not carry health

insurance, you are making an economic decision and that decision is very simple. it is that the rest of us should pay for your health care. i do not think that is right. for those of us who have insurance, approximately $1,000 of the premium we pay goes to pay for those who do not carry health insurance. that is not right. that amounts to about $60 billion a year. it is part of skyrocketing costs. if everybody participates in the health care system it will make costs go down. we think that is fair and the right thing to do. host: next phone call comes from terrence on the independent line in florida. are you with us? hong caller: i am here now -- caller: i am here now. i have got to say, you should be ashamed of yourself for trying to sell what essentially is a

lie. government does not offer any one to any route -- anything to anyone. the government is a force and uses either a threat of violence or the girl of a gun to enforce its policy. -- the peril of a gun to enforce its policy. -- barrell ave gone to enforce its policy. the drug laws -- and sorry, i'm losing my breath here. if the drug laws are enforced, is this health care law also on the same level of determining that the health care law applies to a man or other animal?

guest: what this health care does very simply as applies to consumers. it says the u.n. by should carry health insurance -- that you and i should carry health insurance, that we should not be denied health care by an insurance company, that our rates should not be tracked -- should not be jacked up just because we get sick. it creates the watchdogs of that we get the health care we need and deserve. what can cuccinelli it by bringing this lawsuit is the same thing that republicans are doing all across the united states. the book of this as a political opportunity. they have never had a health care plan. they have never had a proposal to bring down health-care costs or to stop insurance companies from taking advantage of america's consumers. that is what historic averages about yesterday. i respect and appreciate mr. cuccinelli when i was listening to him, and this call earlier

said that one of the things he did not talk about was his dad's to raise money for political future. host: the "wall street journal" calls what the judge did is today, a victory. putnam, ill., bill, republican line.

caller: you keep throwing the constitution into this. where do the insurance company stand as far as free market? they are still private companies. if i decide to charge five -- for my hamburger and the guy across the street only charges -- charge $5 for my hamburger and the guy across the street on the charges $1, that is my prerogative. how can you mandate need to provide that for you? -- mandate, m me to provide that for you? it is still a free market, for- profit business. if you do not want that, then decide on something else, but that is the wave is right now. -- the way it is right now. guest: is the thing about the health insurance industry right now. they are not about profit.

there about excessive, extreme profit. and these days they are not even about providing health care. in most of the markets in the united states, there is not any competition or any choice whatsoever. we do not have a choice. we do not have competition in the insurance market. we are not having to choose -- we are having to choose from one bad insurance plan from another. and that is not right. if they get to jack up rates and an eye care just because people are sick. -- and deny care because people are sick. this lot is changing that. for the first time it is about giving consumers someone in their corner. that is what is exciting about this law. this lawsuit is not quite to get in the way of implementation of the law. -- not going to get in the way of implementation of the law host: kathleen sebelius and eric

holder right today in the "washington post" -- arkansas pass, texas, terry, democratic line, go ahead. caller: where is the common sense of all of this? i am for everybody having to pay for their own health care. that is the way it should be, but if you can mandate somebody

to pay for their insurance -- or if that is an unconstitutional, -- if that is unconstitutional, why isn't and constitutional -- why can't the images tearooms refuse you? -- emergency rooms refuse you? guest: when you seek health care, should you have to take responsibility for that health care yourself, or should you be asking your neighbors and other taxpayers to take responsibility for your health care? that is what yesterday was about, in part. but the most important thing is that we have got a law protecting you and me from insurance company abuses. it is about lowering our rates. it is about making sure we can afford high quality health care. yesterday's lawsuit one after that. ken cuccinelli, the attorney general from virginia, he went

after that. he said, i'm going to stand with minsurance companies and i think my political future is more important. we do not think that is right. we will continue to fight republicans in congress and the legislature to demand that this law is implemented so that we all get the quality affordable health care that we have paid for and deserve. host: ethan rome, we will have to leave it there. coming next, we will talk about the story behind the bp well blowout. but first, a news update. >> senator dick durbin, the democratic leader in remarks earlier today says he believes the 83-15 vote last night clearing the tax measure for further action in the senate will help facilitate its passage in the house as well. he went on to say that the house takes notice of a lopsided senate vote and predicts the bill will be done by christmas.

meanwhile, house democrats meet later today on the tax package. party leaders say they will not schedule a vote on the bill without changing provisions. economic numbers are in this hour. the commerce department says retail sales posted to strong gains in november as the holiday shopping season got off to a solid start. it is the fifth straight month of gains and the biggest jump in department store sales in two years. the labor department says wholesale prices outside of food and energy rose modestly last month due to a large increase in the cost of new cars. but there was little sign of inflation in the report, showing a weak economy is keeping prices in check. those are some of the latest headlines on c-span radio. >> just in time for the holiday season, the supreme court, c- span's the latest book, is being offered directly from our publishers to c-span viewers at a very special price, just $5 plus japan handling.

that is a discount of more than 75% of the original price. it is the first book to tell the story of the supreme court through the eyes of the justices themselves. 10 original interviews with current and retired justices, including chief justice john roberts, steven briar, sandra day o'connor, and sonia sotomayor. it is rich in tradition and history, with 16 pages of photographs, the killing the architecture and history of the landmark building. to order copies of the supreme court and the publisher is a very special price of $5, go to c-span.org/books and click on the supreme court book. be sure to use the promo code c- span at checkout. "washington journal" continues. host: we want to welcome bob cavnar, author of this new book "disaster on the horizon" about

the story of the deep water well blowout. from what i've read in the book, you've done a lot of different jobs in the industry. why write this book? guest: i felt like i could add to the conversation about the deep water well blowout. most people did not even realize that we drilled in deep water. when this disaster happened, a lot of the media coverage was it your superficial or just -- was peter superficial or just not understanding what was going on. i felt like someone in the industry needed to write about the risks -- what actually happened and the risks of drilling in deep water. host: and what are they? guest: margin of error in deepwater is razor-thin. most people do not realize that. we are in deep water because we have had for years of no comprehensive energy policy. we have been importing so much oil, over 60% of our daily use

from overseas. most of which is from companies that hate us. to fill some of the need, we are in the deep water right now trying to supply some of that daley energy needs. host: are other countries in deep water? guest: yes, there are deep wells are run the world come off of africa, norway, and the coast of the united states. host: is it because the profits are great? guest: the profits are great. " companies go into areas where they have more margin than on land and to keep water is the last frontier for big oil funds. that is why they are out there. they fill the vacuum that we have because we do not have an energy source anywhere else. host: you write in your book -- and i just want to read a little bit of it. in the beginning of the book you save was caused by bad design, that judgment unhurried

operations, and a convoluted st. and the result was inevitable. and what did you mean? guest: the biggest issue is safety. both personal safety and environmental safety. in the oil and gas business, success breeds complacency. bp has a management structure that is very convoluted. as the coast guard said, everybody's in charge and nobody's in charge. they had a multi-headed organization where it was not clear, the lines of authority. that was one of the biggest issues. the other issue was that the well had caused a lot of money. they were way over to on schedule and they were trying to get off that well to move onto another well. with that kind of complacency and the manager the structure and they were rushing, and you get a catastrophe.

host: the chair of the national committee -- commission is looking into this reason well blowout and had some comments on the industry's role. here is what he had to say. >> oil is in a strategic resource and its importance of security and economy of the united states. my own experience with the industry leaves no doubt about the industry's technological savvy and its ability to manage risk and to fuel the economy. we are not dealing here with a sick or failing or unsuccessful industry, but with a complacent one. host: bob cavnar, what is your reaction? guest: he came up with the same conclusions that this -- that i did. i have been rattled look to flee critical of the president's commission -- relatively critical of the president's commission, but so far their

conclusions have been pretty well lined up with mine. i do not agree with fred burk but, there council, who said that money played no part here. but his conclusions about complacency are lined up with what i said. host: who did you talk to that this commission has not talked to? guest: i have sources within the industry who i have known for years that i've gotten a lot of my information from. a lot of my research was based on the testimony from the coast guard investigation, which i think was very good. i listened to almost every hour of that investigation. because they had subpoena power, they were able to get a lot of information that the president's commission has not been able to get because they do not have subpoena power. host: what did you hear? guest: is what people do not want to tell you. it is almost what the engineers and managers of bp do not want to say.

the reason the captain came up with the conclusion that everyone is in charge and no one is in charge is because witness after witness after witness was saying that they were in charge or someone else was in charge. there was no clear line of authority. it was clear to me during the testimony that the bp people and the trans ocean people really did not want to talk about that, but it was a key information to the causes of the accident. host: why? guest: because, in the industry when something goes wrong like this common -- would never have won this big, -- we have never had one this big, but when something goes wrong with this, the wagons to into a circle. there is a cone of silence and that opened up a little bit and you could see into these organizations. what i was hearing privately verses testimony, it was pretty well lining up.

the complacency and overconfidence was a factor. host: people heard a lot about bp, but people did not hear a lot about trans ocean. in your opinion, what role did they play? thet: let's be clear, bp is responsible party. they were responsible for making sure that transition and halliburton and other contractors fulfill their obligations according to federal regulations in the, -- in the outer continental shelf. trans ocean that a lot of things that exacerbated the accident. pour minton dhanapala presenter, the silence alarms on the root -- poured maintenance's -- poor maintenance on the blowout preventer, the silent alarms on the rigge.

we cannot forget that there were 11 men killed that night. i bring this up all the time when i talk about the bp well. those families, to my knowledge, still have not been taking care of like they needed to be. that is just when the veterans ocean needs to be -- one thing that trans ocean needs to be held accountable for. right now, the blowout preventer is being examined and investigated by the justice department and by other agencies of the government. we will no one is the forensic work is done how bad the maintenance was on the -- we will know once the forensic work is done how about the maintenance was on the blow up prevent her. -- blowout preventer. if we have a design flaw built into the blowout preventers. andpreventer and a mistake

like this and things like this happen. host: you have been in this industry for 30 years. what do you do now? a guest: i have taken over a company in colorado that produces natural gas. i have always wanted to move into sustainable and just moved into it in the last year or so. caller: first call from arkansas. -- host: first call from arkansas. caller: until we stop driving these suvs and gas guzzlers, nothing is going to change. until we crack down on these things, this is just a joke. guest: one of the issues we have

incumbrance of energy policy is just that. today, our mileage standards are worse than what they were 20 years ago primarily because of suvs, many of which are exempt from fleet mileage standards. because of that, our usage has -- our fuel usage has skyrocketed over the last 20 years. as long as we do not have a policy that encourages conservation, alternative fuels, other ways to conserve the fuel that we have, we will have this problem. host: next call is and andrew, you are on the air. caller: first of all, we have got to get rid of the epa. we worked hard in america and that is why we can afford the vehicles that they are talking about. but these people here want to drive it into asia so we have to depend on those people to give us fuel. we have plenty of fuel in this country, but this administration

and the epa are killing us. host: parol of the epa and how the industry reacts to the epa. -- the role of the epa and how the industry reacts to the epa. a guest: i have to disagree with the caller. i think the government can do a better job. not one of the problems that we have with the bp well as with federal agencies like the epa and deerow of oceans management and the weight of your work with the industry. they did not in force -- the way the bureau worked with the industry. they did not enforce the regulations. i think we need to make sure that the industry follows regulations. host: next one is roger, democratic line, go ahead. caller: if you have noticed, ever since the republicans in the bush administration, the

price of oil has been going up ever since. i think this oil spill is just another ploy to drive the price of oil up. host: mr. cavnar? guest: the price of oil has been driven up because of huge global demand. i do not believe there is manipulation of the market. i believe there is a huge growth in asia and huge growth in other parts of the world where demand has grown because we have not been able to grow our own domestic supplies because we have explored all of the front -- frontiers of the u.s. except for the deepwater. we have been driven more and more to import, which has put us more at risk. essentially, we have lost control of our own destiny because of that supply situation. i believe it is more because of the global demand rather than a political party.

host: you hear about the impact of the moratorium and the future of deepwater drilling. guest: one of the things the public has is they allow lobbyists to speak for them instead of speaking for themselves. lobbyists make money on the conflict that goes on at capitol hill. they like to see it gone on because they make more money. if we spoke more directly to the politicians, we would have bettered his course. -- better discourse. i believe the industry continues to push for the short term solution because they are driven to push for quarterly earnings rather than long-term solutions. privately, that executives tell me they agree something need to be at dawn. macon's needs to be -- maintenance needs to be redesigned and improved.

when one market closes, they can move to another market and not have to use three-move the u.s. cruise with them -- not have to move the u.s. crews with them. is this situation where the industry has created this problem and then complain about it. host: here is a question. guest: the acoustic system is a good system. it would not have prevented this, though. because the blowout preventer itself was faulty, and acoustic or wired system would have both failed. but i do think an acoustic system lowers the risk of failure. host: at the core of the problem here, what happened technically structurally that allowed this

to happen? guest: the core of the problem was that the dp managers on the rig and the transition managers on the risk -- on the rig allowed hydrocarbons to flow from the wealth through the blog printer. the control point, a blowout preventer, in deep water is not at the surface. you have 5000 to 10,000 feet of pipe above that blowout preventer. if you allow hydrocarbons to get above that blow up printer, then there are nois almost nothing yn do to control that well. host: and the cement job was what caused that? guest: what allowed it was the complacency of the management and too much going on with the rig and then missing that particular fact and then having

an additional well but did not have the seal down in the well. host: next call is tom from new york. caller: michael worked on the oil rigs in odessa, texas -- my uncle worked on the oil rigs in odessa, texas for years. he told me they had the same things going on for years and years without any problems. but the shallow waters is the way to go. there's plenty of shallow water to do this. there is no need to go deep water. host: mr. cavnar? guest: i actually worked in odessa years ago in my own career. the onshore fields like west texas and around odessa and the flynt are much different than the gulf of mexico. the challenge we have in the gulf of mexico is that the shallow water has essentially been drilled. the reason they are drilling in deep water is because there are

no more large find, at least economically, in the shallow water. some would say deep below the shallow water there are some positive than might be commercial, but we have not done a good job of finding those. host: next call is from new jersey, carol, and even the line. -- independent line. caller: is in a true that all of the oil that was drilled in the deep water or alaska, most of it is exported to the world market for individual countries? as i understand it, most of the oil in alaska's that is currently being pumped and has been pumped four years has been exported to the japanese market. if that is number one. number two, bp contributed over $1 million to the election of the obama candidate. in return for that, and the mineral management corp. -- i

think the mineral management corp. that was instituted to oversee the drilling, especially the deepwater drilling by mandating security measures to be placed on these drilling wells, they walked away from mandating that as far as bp was concerned. host: mr. cavnar? guest: the couple of things about the exporting of oil. there is a misunderstanding, i think, in the public generally about how the markets work. it is true that some oil can be exploited from places out of alaska. but the way we calculate the amount that we produce versus the amount that we export in is a net number. most of the oil that is produced in alaska, and virtually all of the oil that is produced in the deep water or in the gulf of jet -- gulf of mexico in general is

used domestically. there are motor oils and other products into other countries, but they are all calculated on a net basis. we look at the net amount of oil that we produce verses what we byrne, rather than individual creditor fields. in terms of the bp particular relationship, i do not believe that they had a regulatory regime based on the amount of money that bp might have contributed or the bp executives might have contributed to a particular politician. i do believe that bp and the government had a real motivation to get this well off of the television. there was a midterm election coming up, the news was bad. the obama administration particularly was very concerned about the viability of bp and bp committed to pay $20 billion

toward damages. they needed to stay viable and the government wanted to keep them viable. there was a bit of happy talk during that time to keep bp viable and able to pay $20 billion. host: what is the view is understanding that our viewers should know about when it comes to how these oil rigs or wells operate? guest: the thing the general public should understand is that even though the technology here is wonderful -- it is like heart surgery on the surface of the moon the way the industry can work at the bottom of the ocean. people need to understand the razor-thin margin for error, though. and the inability to control these wells this something that goes wrong, like it did in this particular case. host: what is the culture like on an oil rig? guest: it is very close, like a family. they will work 21 days on, 21 days off. and the 21 days they are on,

they are working 12 hour shifts with the same people, day after day, month after month, year after year. these relationships are very close. host: does that need to change? guest: no, i think is good. if you have proper management and proper training and proper design of the devices to keep the well safe, then i think the camaraderie is something that would protect one another. but they need to be sure that they are protecting one another according to a safe procedure, not short cutting, like i think happened in this particular case. host: mike, a democrat from georgia, go ahead, mike. caller: my question was, why do you think that the republicans blocked the committee from having subpoena power to find out what really happened? and is this an example of protecting big business and no matter what? guest: i think the reason that

the republicans blocked subpoena power was a strategy they have been following for the entire two years of the obama administration, trying to deny the obama administration any kind of victory in any case. there is no rational reason that a presidential commission not have subpoena power to be able to access all of the information. and it really hamstrung the committee, i believe. host: says the story on the front page of the "usa today." turning the discussion toward gas and drilling on land. it is about a gas shale in louisiana. the residents there two years ago when the gas companies pumped into a gas shale 2 miles

below their homes if the sparked a gold rush. what is the future of this? guest: the gas shale's have been a wonderful discovery. in terms of as being able to fuel our future. i think the costs are very, very high for these wells. these wells cost anywhere from $12 million to $14 million to drill. host: compared to? guest: the traditional completion is less than half of that. but the reserves are large. i think the reserve life is shorter than everyone thinks it is. i am really worried about them becoming complacent about energy policy if we have tons and tons of gas. we have a lot of gas and it has

made it a lot more economical for us to use it for transportation and other uses. i'm just concerned that we think this is the solution long-term and unafraid is not. host: republican line, go ahead. caller: it seems this administration is pretty much try to limit as much drilling as possible, but yet, it is my understanding we are lending the mexican government money to drill in the gulf, which we are pretty much.ing and i know for a fact that we are lending money to brazil to drill 20,000 feet under the surface. but it is too dangerous for us to go 5000. i think it is just part of this

administration's trying to divvy up the wealth. comments? guest: it is interesting, i hear a lot about this money being loaned by the u.s. government to brazil. that is one of the action -- that is actually one of the economic agencies of the government that provided some backing for financing in brazil. that decision was made about -- was made by the bush administration, not the obama administration. it was made some years ago. you have to remember the obama administration to much as three weeks before the well blew out actually announced opening areas of the east coast and alaska that had been closed for over 20 years before the first bush administration. the obama administration, even though they tend to exercise some anti-business rhetoric, i believe they were actually trying to reach a balanced in terms of alternative fuel investment and fueling our own

domestic policy. but clearly, the bp well blowout shut that for many years to come. host: bob kavner, author of "disaster on the horizon" and a 30-year veteran of the gas and oil industry and currently the ceo of luca technology. you harnessed natural technologies? guest: that is right. it is a very technological process where we are able to reactivate the microbes that exist within -- we work with methane primarily. if we work with these microbes to begin to generate methane gas in these oils that are close to depleted so we can restore production from a declining supply and provide more natural gas. host: says not necessarily an alternative source. it is guest: alternative in terms that it is -- guest: it is

alternative in the terms that it is sustainable. you find an area that has oil or gas, you draw it, you produce it, it is gone. in this particular process we can take over old wells that are close to depleted and restore them back to production and keep the production for a number of years without having to drill new wells or any hydraulic fracturing. host: next call is from tennessee. good morning. caller: one thing is responsibility. if you would just comment on that. you got the head of the dog, the body and the tail. i look at the consumer as the tail and the government as the body. and the head of this thing is the corporation. who should be leading in terms of responsibility?

guest: in our system, our elected leaders lead. unfortunately, history tells us that political leaders are only focused on their own reelection, not necessarily doing the right thing for energy policy. energy policy requires the american people to make some difficult decisions in terms of the cars they drive, the amount they travel, how much they burned in heating their homes, and how efficient -- the investment they need to make to be more efficient. we are all responsible for ourselves. but we cannot drive electric cars until we have a policy that encourages investment of electric cars that reduces overall oil consumption. host: what happened during the 30 years of being in the oil and

gas industry that made you change your mind, if that is what happened, about the future -- the status quo of this industry? guest: there were a number of things. years ago back in the early '80s, was burned in a gas well fire. i was really lucky. in fact, i read about it in the book. i fell into a ditch full of water after the pit blew up. it saved me from being burned critically, but it really focused me on safety. it focused me on how i could act personally as a manager to protect myself and the people in the field. the industry took a years to get to the point that i was in just a moment from being burned. the other thing i saw was practices in the company's i worked for in terms of wasting freshwater, destroying a surface environment, and improperly disposing of hazardous chemicals that got me worried

about the future of my kids and my grandchildren. i have been speaking of for about 10 years about how i believe the industry should be more responsible in the way they operate to protect not only the environment, but our kids. host: next call is from new orleans. go ahead, johnny. caller: i would like to know what role halliburton played in this disaster. guest: halliburton was a service company that was contradicted to bp. they provided a number of services. the primary one in this particular case was these demanding job -- the cementing a job, or the job that seale told in the pie. i do not believe they have a lot of liability in this case. even if the cement job is bad, that is not legally blowout.

a cement jobs this indeed is difficult to do successfully. remedial work, the cement job needs to be repaired before the well is completed, that happens quite a bit. because there were no mechanical seals lower in the well and because the bp management and transition management allowed the well to float above a blowout preventer, that was the primary cause. certainly, halliburton need to talk about and disclose what this event tests showed themselves in the lab and in their samples from the rigor. but i do not believe halliburton doing a bad job should lead to a blowout. host: next call is from tom in ohio. good morning, tom. caller: he was saying how we

were not using anything, but yet, when we were in pennsylvania, they turned around and have to pipelines going up to canada -- two pipelines going to canada. you can look now and i agree with him how they are with the water system. they are starting to protect the water systems now. but if there, and how much oil and they are going to canada and -- if they are pumping that much oil and they are going to canada and then coming back to the united states, why can't we, that are around the united states and that way we can save a lot of money. host: that is a great question. understand that the industry will go to the market that is closest. the merciless shale -- the marsalis jail and a number of

other shales are producing mainly gas, not oil. one of the issues that we've had in the states is that we have not really build a modern refinery in a number of years. our refinery capacity and our ability to process crude oil is very sensitive. you have to move it where it is. i do not believe they are moving into canada so they can reimported at a higher price. there is no profit to be made by a moving it around. in fact, the more you move it, though less money the oil companies will make. they will drive it to the market that is closest. host: 10 on the democratic line. go ahead. -- ken on the democratic line.

go ahead. caller: my question is along the lines of the person who asked about how a burden. me being along the gulf coast, is bp shielding halliburton saifrom the bush administration? guest: i think just the opposite is happening. if you recall, they came out with their own accident report in september and a list today causes for the blowout. -- and of a listed eight causes for the blood. they ignored several important -- for the blowout. they ignored several important causes, but the causes that they listed -- they only took responsibility partially for two and ignored a number of other

causes. i think they're actually trying to spread the blame as wide as possible rather than shot -- trying to shield the contractors. host: next phone caller is from steve. you are on the air. caller: the corporations to control oil -- who control oil have all of this influence and they decide what the policy is. wood that we it was woul used for energy. if it was mature, they would control about. -- if it was manure, they would control that. jimmy carter came in with a solar policy and reagan ripped the solar panels of the white house. don't you think we should have a policy that is not subject to correction?

and what ever happened to fusion energy? fusion energy was supposed to be coming on line in 2010. what happened to that? guest: we cannot ignore the role that money plays in the political process. the oil and gas industry over the past 10 years give about $130 million to republican candidates and about another $20 million or $30 million to democratic candidates. they consistently support conservative candidates because they tend to support industry positions. and the industry position is that we need to drill as fast as we can to drive quarterly earnings. our elected leaders, rather than falling what is best for corporations in terms of their earnings, really need to take the courageous step of talking about what we are one to do about our energy needs over the next 50 years.

even those who do not believe in the people. will it knowledge we have about 50 years -- the people fear you will of knowledge about 50 years -- the peephole theory will acknowledge we have about 50 years left. we need to refocus on our grandchildren rather than being reelected in 2012. host: a comment here about drilling in 1960. in 1960 the total was around 200. if you go to the 2006 because of 58,000. where do they expect that number to be in the future? guest: i'm not sure is going to grow as fast. right now, we drill all the easy short -- keys he will. -- we drill all of the easy

well. statistically, the large discoveries have been made. they will companies will go to where they think the biggest return is. -- the oil companies will go to where they think the biggest return is. because they are in deep water, not a lothat there's of other option. we have 4000 active platforms in the shallow water, but only about 500 to 600 in deep water. 80% is coming from a small number of wells. the discoveries are large. you do not have to drill as much, but they are very expensive, about $100 million per well. host: gary in ohio. go ahead. caller: 11 days before the well blew out -- this has been reported on tv -- halliburton bought the recovery and, the oil recovery company and the agent

and they were spraying to disperse the oil had arsenic and everything in the world in it that was poisoned. why was this allowed? guest: couple of things. the company that bp acquired just before the blowout was a company called boots and coo tz.' they are not a spill control company, but it will control company. i have a whole section in the book on well control and those people who work for years to control wells. halliburton acquired them during this entire catastrophe. i do not believe it affected the performance of boots and

cootz. it just happened to be a coincidence that they were working on the deal at the time that it happened. the dispersants' have been a huge problem. one of the problems with the applications of dispersants, they use a product called core exit. it is made by nalco, which is a company here in the united states. the thing that bp did that i really disagree with it was applying the dispersion of the ocean floor. it had never been done. we do not know what the natural effects are. there are solvents and other hazardous chemicals in those dispersants'. it breaks the oil of and to -- the oil up into small droplets and it allows thato