and comments on "washington journal", then at 1:00 p.m., the center for american douglas is hosting a from talking about the health care law and its impact on consumers and the health-care industry. >> tonight, with the holiday season in full swing, a discussion on internet sales tax with scott peterson and geri cerasale at ellicott p.m. eastern on c-span. >> the economic policy institute looks at how the changes to the tax code will impact the next year's pay cuts. and concerns about al qaeda and attacking the u.s. on the holidays. later, vice president of taxpayers for common sense examines presence of the tax bill that looks at various industries and special

interests. ""washington journal"" is next. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> good morning and welcome. the senate will consider today the start treaty and will meet this afternoon in the closed session to discuss the nuclear arms treaty with russia. let's begin with a capitol hill reporter for the latest on congress, but first there is an investigative piece called "monitoring america," a look at cooperation between the federal government and your community local agencies in fighting terrorism and crime. are we safer because of homeland security and under is to call

are on your screen -- of the numbers to call. you can also send us an e-mail. journal@cspan.org. this piece starts this way.

our question this morning is are we safer because of these homeland security measures? let's get right to the telephone. tom on the democrat line in michigan. caller: good morning. hileman are they going to keep the terrorists out? they need to close the borders, first. tourists could be coming through

the mexican border host: let's go to michael in riverside, calif., joining us. caller: i have lescott the question. -- in after askin a simple question. mothers, fathers.n mother, >host: is "having a negative effect, the efforts overseas? caller: yes, you cannot expect -- after a bombing people willy- nilly. host: 4000 agencies were on counter-terrorism at local levels.

host: let's go to maryland where liz is on the democrat line. caller: that is caroling

mic -- that article is hair.ng my i want my country back. when did we turn to the suspects without doing anything? host: homeland security secretary janet napolitano says in the washington post: she is named as the public face of the pivotal effort for a homeland security. she built one of the stalinist state intelligence agencies in arizona

sally in fort worth, texas. caller: good morning. host: are we safer because of homeland security efforts? caller: we are not. in texas we cannot turn the corner will be another overrun with hispanic people. they are not protecting of our borders. people are getting killed right and left in texas and nobody talks about it. host: what should be done? caller: they need to close the

borders. they either need to get the military and -- my father was in the fifth cavalry in the 1930's and the patrolled the borders on horseback. i don't know what we can not to do that now. host: some more bullet points from the washington post article. seeking to learn more about islam and terrorism -- host: george's next to the elkhart, indiana. go ahead. we are listening to you. please turn your tv down. we have to move on to robert

john coughlin "democrat line in north carolina. we safer? caller: we are worse off since the tea bagger people took over the government. snakes are still crawling and destroyed everything in sight since 1492. venom is putting oliver the roads -- all over the world. when we kicked their butts in and they called

themselves dixiecrats and now they call themselves the republican party. we are not safe. host: historic talks about wallace suspicious activity. and the state and local authorities should look for. possible tourism plaut. authorities are asked to explain in detail why the observed behavior qualifies as suspicious. the government says race, ethnicity, national origin, or religious beliefs cannot be considered as a reason for suspicion. but they can use that to describe the person in eliciting information is number one. they can talk about the facets of a facility, the operations, or security procedures. the testing security.

and recruiting. personal data, a banking data, or travel data. photography, if people shooting videos of buildings or infrastructure. also, observation and surveillance. people demonstrating an unusual interest in facilities. even using binoculars, taking notes, or of taking measures. and others include materials acquisition or storage. expertise in information. people have been unusual quantities of weapons or explosives. also, infrastructure. actions associated with concerns for public health with regard to personnel facilities or functions. what the government considers to be suspicious activities. tyson, from santa monica, calif., a republican line. caller: i feel sorry for some of these democrats.

much moneyout how conservatives should pay in taxes. janet napolitano has dropped the ball. coming from arizona herself when and halving the current governor pleading with obama to get troops to the border and yourself being the former governor is mindboggling. and with this whole psa fiasco that we had, i did not hear much from her. she has dropped the ball. she burst secretary if we have had. host: let's go to the next caller in memphis, joining us from tennessee his surely alba democrat line. caller: we are not say for it. we are into toward fascism in the government. in irvine, calif., the fbi

started trying to recruit people to and sent them into so- called terrorist activity. who is a tourist? the kkk were terrorists for years. nobody's doing anything about that. we are going to become impoverished. becoming a third troubled country already. our credit is no good anymore. -- we are becoming a third world country already. looking at truth and try to balance things so everybody can benefit will help us. that's the answer. somebody talks about the gulf the. we don't care or about people being wealthy.

they can go undercover and work against all the good things that will happen for the people in the lower classes and nobody can tell who they are because the money has been stamped with their name. host: the department of homeland security has created a second -- 365 reports have added information to ongoing cases.

let's go to raleigh, n.c. on the independent line. caller: good morning. a lot of people are not thinking about something. everybody is worried about terrorism. half of the gangs in america

are natural born latino gang members with the context to bring drugs and the people into the country. we need to stop the birthrate that we have in america with illegal immigrants. they send money dax home -- back home, they have taken our jobs legally and illegally. quiznossenior citizens' medicine. veterans without housing, african americans with the lowest population in history. -- senior citizens not able to get medicine. host: having homeland security eds moore today to the process. in fort worth, texas, landry, a

republican. obviously for adults of homeland security efforts? caller: whe-- are we safer becf homeland security efforts? caller: wheeler at first. but that position has been weakened. host: independent line, or are we safer? ofler: i think's catullus being safer, but there are so many things happening in our country right now. we need a better immigration -- we need better laws to help immigration. we need jobs. we need to improve the economy. there are so many problems out there.

terrorism, people are not really thinking straight. they are not thinking in a civil manner. they are starting to accuse people again. starting to accuse all of these different factors that really are not giving us any more safety than before. it is just causing more fear. if we are safer or not, at the beginning maybe yes, but now because of everything happening and the economy, and i don't know if we are safer because a lot of people do racial profiling and it causes more confusion. host: there's a comment from twitter.

looking at collaborative efforts going on between federal government agencies and local agencies in your community. at the same time the fbi is expanding its west virginia database --

let's go to vermont on the democrat line. caller: the things on the list you showed made the kind of nervous because the government really does all of those things. i guess, who do you trust, what are their intentions? the more you collected data, identify people. may be good on one hand, but it takes of freedom. people have used against people. -- people have opposing views of people in power.

being nonaggressive gives more freedom. we are rolling in the wrong direction. host: the senate is grappling with a nuclear deal. mitch mcconnell says obama is trying to rush the job. the top republican announced that he will vote against the nuclear deal. this will continue to be discussed today, but it is not certain how that will turnout. jake sherman joins us from "politico." caller: good morning. host: what will happen in the senate today over the start treaty? caller: the senate is moving closer to some sort of movement on this bill, a vote of poured down. they are meeting in the chamber

to discuss the more secret items. it is moving towards some sort of vote in the next couple days. the more pressing issue for congress and the issue that needs to be resolved quite quickly is funding for the government. congress has not passed any appropriations bill in the last year. it needs to fund the government somehow. it will presumably do that in the next couple days. host: how long term will that be? caller: looks like it's going to be two and a half months. which is interesting politically if you consider under republicans coming in don't want to spend a lot of money and want to get the deficit controlled. they will have to deal with that, the next congress, relatively soon. it's going to be two and a half

months. when congress moves back into session almost immediately they will have to figure a valid a way to fund beyond that. john boehner, future speaker of the house, has said that he does not want to do a spending bill. he wants to do an appropriations bill. that will be difficult to wrap his arms around so rarely in congress. host: funding for most federal agencies and departments will continue at levels of 2010. overall funding would be $1.2 billion above levels authorized in last year's budget. who wins? caller: this is exactly what republicans have been setting a long time, that congress has assured its duties when it comes to funding the government where they have to do stop gap measures. nobody really wins. republicans say they want to go

to 2008 funding levels. they're not going to be able to do that. much of anhave optional now. congress does not want to shut down the government. we're getting close to christmas. congress is almost over could they are just beginning, they have to fund with stopgap measures. this is something people would stay on capitol hill expect this is what congress has a 13% approval rating and adapt to do things like this. host: there's a letter that says the new start treaty will not limited missile defense. how key is the missile defense issue? caller: incredibly important.

john mccain has been particularly vocal on that. which mcconnell said that the clinton against the measure. if he lobbies his members to vote against it, it could be in danger. if "tonnelle begins telling people not to vote for it, it could be in trouble. other allies, senate leaders this morning, dick durbin says that he thinks it's going to pass. joe biden said yesterday that he thought it was going to pass. democrats are making hard sell. it depends on how piscivorous the effort is. host: what about going home for the holidays? caller: the house has to pass the current resolution funding measure. the senate is sending them back

a food safety bill which have some procedural issues a couple weeks ago, so they can pass that relatively quickly. the senate -- it is never clear to me exactly what the senate will do. the house will be gone most likely after tuesday. host: the mood on capitol hill this weekend and the senate worked through "don't ask, don't tell" and the "dream act", what was the feeling about who is getting the upper hand and who's going to go into the holiday season being able to say that we did something? caller: this congress as a coming to a close, it has been said that this has been one of the more productive congress's in the last 50 years. if you look at what it has done.

the "dream act" failed, but it looks like kucinich is going to take upper the 9/11 first responders bill, which chuck schumer and kristen miranda say has a real chance. democrats and republicans also came together to pass a tax bill. that's a pretty big accomplishment. this has been an extremely productive congress over the last two years. health care, finance obligatory reform, and now the nuclear arms treaty coming up for votes. an extremely productive congress. democrats would say they have been very productive. republicans would say they provide a tax hikes. but they will all go home for christmas with a couple of a

congressman's duties owed in their districts. host: thanks for joining us this morning. caller: thanks for having me. host: the question is about homeland security and whether you feel safer. try, mich., wilson is join us on the independent line. caller: thanks for c-span. homeland security is about as good as it can be. we have to look at and other countries like france and germany and england. they have tourists. even russia has had incidents. i think the president and homeland security, they are doing about as well as you could expect them to do. the real danger is the people

getting up on the stump in this country and called the president a liar and the multimillionaires. we have an entire cable channel dedicated to assassinating the character of the president and the station is owned by a person not born in this country. we should not constantly criticize. instead we should, because we are americans. i thinks quinnett compares to any other country, we are just as safe or safer. homeland security is doing the best it can.

democrats are not doing anything to us. it's the people preaching hatred. no on everything. when are going to get some cooperation? host:joe says he believes that we do have the tourists on the run in general, but with normal policing. looking network that's been done in places like afghanistan and this is all the way back to memphis, tenn..

u.s. customs and border protection flies general atomics predator drones -- host: let's go to florida, john, a republican. caller: they came out and with a reported not long ago. when the government has people

that said they support ron paul, we have a problem. who do you fear more, the terrorists, or the government? i fear the government. host: steve, a democrat, ky. we need homeland security internally. lynn in baltimore, md., on the democrat line. caller: we do need it, but it is an issue when they start to address american citizens. sometimes if you are all whistle-blowers, you can be targeted as well.

of civil rights organizations have been targeted after speaking out. who is the terrorist? that is the issue. all lots of it is unnecessary money on targeting people who should not be on that list. they have a lot of people on that list that should not be, who are not terrorists, but they perceive them as tourists. host: wyoming, ron on the independent line. caller: this is the most important issue that faces the world. war on terror his is a total fraud. this is exactly the opposite of how you would go about securing

the country. if bill cala is an association of pure evil-- if there were an organization of pure evil, they would been able to afford their own shoelaces. to worry about, they assured us. you look at 9/11. the fact that none of these people have assumed the role that we don't want them to assume, to protect us from terrorists.

london there's stuff you can look up.n there were bombings in london ventura like the british counter-terrorism exercises drills from the same day. benjamin netanyahu was in that same exact area. this is nothing against anybody's race or religion. it is against countries that we support right or wrong even if state sinki -- even if they sink our own ships. n inside job.nce aida

host: curtis, a republican line. --ler: people think earlier there were talking about the mumbai terrorist attacks. those terrorists would have been brought down much more quickly by the people then the authorities. we are supposed to protect that building behind you and not the other way around. appreciate your show. host: a proposed amendment would enable states to repeal federal

laws. there is another story, the same-sex marriage date. how the weekend vote was a milestone for the gay rights movement, the "don't ask, don't tell" policy being repealed. a lot of activists are thinking they can gain ground in areas like gay marriage. president bill clinton proposed allowing gays to serve openly in 1993, congressional opponents raised fears that the gay service members will be --

also, what's happening on capitol hill and at the white house, president obama reaches the ballot amid new tensions -- reaches out in the wake of new tensions. - is moving quickly to amend its strained relationships with the democratic base. let's go to memphis, tenn., where larry is on the democrat line. caller: i believe the caller from wyoming that rich people are controlling this nation.

we are going to be completely taken over by fascists. everything they do is for the rich people. they let the lobbyists write the medicaid bill when bush was in office. $5 for a gallon of gas. obama and the democrats are just as bad. we have a fascist government. the news media is controlled by the rich. i don't want to and during the fascist propaganda from the reporters. host: year, pennsylvania. -- erie, pennsylvania.

caller: we are safer. host: sheila, democrats in line in connecticut. caller: good morning. i would like to point out that there is a big difference between isolationist policies a nd overseas key quinto- relationships -- overseas interrelationships. if we would stop lashing analyst at each other. the fabric of america has to come back to get there. i think a lot of ducks fear -- a lot of the fear is just like in the time of fdr. we need to nudge isolate, but

cool ourselves back together. host: let's look at the image from the washington post website. there's a slideshow looking at some of local law enforcement efforts. this is a picture of the memphis police department squad car. they cruised to a parking lots and streets and ken's scan license plates and as a city records looking for the outstanding warrants. tony, las vegas, republican line. caller: we are very probably safer. i think we are safer. we have not suffered any terrorist attacks in the last six years except for attempted once. at the same time, you have to believe that the left has become almost unhinged in a desperate

effort to blame the past for what is happening today. the president has to take responsibility for an happens now. host: some callers are concerned about privacy issues, data collected on american citizens. caller: i think kids would have been a trade-off in any advanced nation whatsoever. i cannot imagine any nation that wants to find out -- the debt and gives you a -- that gives you a card to find your propensities.nsitie

there are now 4000 local, state, and federal government agencies whereupon -- working on terrorism. you can see the great collection along the eastern seaboard, boston, new york, philadelphia, the virginia beach area, washington. and every state has at least a few of these centers located there. let's go to minneapolis on the independent line. caller: good morning. thanks for taking my call. i am one of those people who

tends to think there are terrorists. i am more afraid of the local police than terrorists. when i am driving in my neighborhood, i get pulled over driving 66. >host: you think that you are being profiled because of the color of your skin? caller: yes, it happens a lot and it has happened to a lot of people here before me. i get kind of scared when i hear the law enforcement agencies

have their local police departments. host: let's go to new jersey, john, republican. caller: i am calling about homeland security. what about the people they're giving extended unemployment benefits? that does not include 911 workers. we got kicked and a lot of the box -- out of the box. host: vivian says -- charles, a democrat line, calif.. caller: first-time caller. we are not safe for -- not

safer. i live in the neighborhood and in a black person where everybody else is black. i used with a lot of african proud.ecause i am troubl i don't want to be stopped for that reason as a terrorist. my home was entered and i was taken ave. host: thank-you. looking at whether we are safer than we would a years ago. the was it would be bomber try to make his attack.

first, let's go to the tax code changes and how old they will affect your paycheck. we will be right back. every weekend on c-span 3, experience humira industries, 48 hours of people and events

telling the american story. historic speeches by national leaders and an eyewitness accounts of events that say to the nation. visit museums, historical sites, and college campuses as leading historians and taught profs delavan to america's past. all weekend, every weekend, on c-span 3. >> tonight, with the holiday season in full swing, and discussion on an internet sales tax with scott peterson of the steam line sales tax governing board. and a representative from the direct marketing association at 8:00 p.m. eastern on c-span to. >> the c-span.org provide coverage of politics, affairs, nonfiction books, and american history. it's all available on television, radio, on line, and social media networking website. find content any time through the c-span video library. and we have been abuzz and local

content vehicle bringing resources to your community. it's a washington uruguay, the c-span networks, created by cable, provided as a public service. ""washington journal"" continues. host: the economic policy institute and he's a federal budget policy analyst. cguest: thanks for having me. host: how your paycheck might be affected by the tax code changes. what will the page 6 look like when the changes take effect? guest: about a thousand dollars in tax cuts will be the difference. reductions from 6.2% down to

4.2%. the fica tax on your pedestal will be reduced by 32%. you will see an immediate reduction in your taxes starting in. from some low-income workers and you will see an increase. the making work pay credit to draw us to attend. your payroll liability decreased every month. that was decreased from withholding so it was spread through the years. some people and it's your refund. any worker making less than $20,000 a year and would be adversely affected by this. most americans will see a bigger tax cut. the making work pay tax cut,

there is a maximum value of the pay cut at $136. host: we have productive extension of the bush-era tax cuts which has been passed by congress. that will affect not all americans making less than $200,000, high-income earners. guest: the middle-class tax break helps all income levels. the republicans insisted on slightly more tax relief even vocal higher incomes already endured tax breaks as the middle class did.

something that will be palatable, necessarily. talking about the cuts in social security payroll taxes. people will see more money in their paychecks. guest: that's right. all of the bush tax cuts were supposed expired at the end of the year. no one expects that to happen. bill would be a drag on economic growth, close to a percentage point. some forecasters expected all the bush tax cuts to be extended. some expected only the middle- class. there are some variations on whether the taxes would change the gdp forecast or unemployment. as whole, it is a negligible impact on the upper income provisions. estate tax changes will have a

negligible impact. host: we are wondering about deductions. there's a recent story that look set some of the measures and things people could deduct from their taxes. a deduction of $250 for educators spending their own money on classroom supplies. is that still there? guest: absolutely. host: and being able to deduct state and local sales taxes. guest: for individuals taking the itemized deduction, you can deduct other taxes, it is a bit of a regressive deduction. most itemized deductions are. if someone in the top bracket get 35 cents on the dollar,

someone in another baggett gets 15 cents on the dollar. with the standard deduction, you get absolutely no benefit. taxe's a host of expenditures that are not being called into question. most of them are being rolled over another two years. but the administration is starting to signal some interest in fundamental tax reform. in that case, you could see an effort to eliminate or reduce the value of some of these deductions in exchange for reduction in tax rates and an increase in revenue. we have gotten tax changes in the past, often the revenue- neutral. from let's hear from tom los angeles. caller: hello.

i notice petco that we have not gotten any social security raises in the last couple years. i was wondering how much r.m.b. losing in welfare to the legal immigrant population? -- how much are we losing? it's not fair to the people that they all their lives into social security. guest: we transformed a welfare program into the current income tax credit to help with assistance for needy families. you can only draw on that if you or paying taxes and most illegal immigrants do not pay taxes. as far as social security,

theation is so locaw because economy is depressed. there's a $250 supplement in the recovery act that congress quiznos it going to do. host: you spoke about the cuts in social security taxes that people will feel in january. what does that do for the money that is collected for social security? guest: the payments last. the money is being made upper through the general fund. the treasury borrows money nationally and internationally to fund social security. many policy makers and some analysts are aware about the longer-term effects. after you cut taxes, it is very hard to raise them again.

could taxes be raised 2% for all americans? it looks highly unlikely. unemployment near 9%. it's going to be up and climate in 2012 to raise taxes. if you cannot raise, the annual social security off the balance sheet. a separate pension fund "partially on-balance sheet program. then you get more leverage to policymakers opposed to social security and want to cut benefits, if it has an immediate impact on general revenue, cutting benefits would be a more feasible. host: a caller from washington, d.c., a democrat line. caller: good morning, thanks for c-span. i've been waiting for this topic. the problem the democrats have

had, they have not been able to explain themselves, for example, the tax code. if you can tell us how much someone making $50,000 would be able to save from this tax code? cond, and earned income tax credit, who qualifies? thank you. guest: let's start with the earned income-tax credit, it increases your after-tax wages so that it matches you to a certain point and then the levels off, a predominately benefits americans making less than $20,000. there's a lot of discrepancy

regarding family members and qualifying children. lower-income families with children should. you don't want children to be adversely affected by the economic condition of their parents. if the value of the earned income-tax credit increases with the number of children. incorrectness accommodate added a third tier. that provision is a fairly large expansion of the and the income tax credit being expanded by the tax package. the and earned income tax credit is much smaller if you don't have more children. it is targeted toward low-income families with a lot of children. it's a partially refundable tax credit targeted for lower middle-class families, the other one. if a family has a child, you

want them to be able to take care of their child regardless of their economic condition. host: what with the savings be if you made $50,000 or $100,000? we have their average savings for next year if you make half a million up to $1 million, your savings could be $25,000. how significant is this? guest: it is significant. talking about how big a tax cut you would have. do you use current funding or do you assume current policy?

it is really quite telling if you look at what a millionaire gets out relative to current policy, extension of the bush tax cuts. a millionaire seeing a tax cut of about $9,000, relative to current policy, $140,000. the bush tax cuts gave a lot of money to very wealthy families. if you look toward current policy, it is benefiting everyone throughout the income distribution. interestingly enough, the smallest relative tax cut, the group with the smallest share of tax cut -- not in terms of absolute value but the number of filers, and lowest -- again, because of the making work pay credit is being allowed to expire in being placed with a less progressive payroll tax cuts, for about most of the income distribution use the 84% receiving tax-cut relative to current policy.

host:, to us from the tribune newspaper -- $40,000 to $50,000, an american would receive 1700 record 30,000 to 40,000, $1,300 break. 20,000 to 30,000, $1,000. it down to 10,000 or 20,000 range, a saving of about $560. let us get to david, republican line, in florida. caller: good morning. as always, thank you for c-span. i would like to object to your guests use of the term tax expenditures. it is not a tax expenditure, it is our money that is being sent to washington. it will spend the night on the town there and the appropriators will send it where they want. it is not a tax expenditure. i object to that of a very, very much. this is language that is being

used by the left wingers and the democrats to keep our taxes -- or to raise our taxes high. guest: i am going to have to disagree with you. on a very technical level, called the tax expenditure, what the congressional budget office, objective non-partisan groups call it a tax expenditure. a lot of these provisions look like spending initiatives but they are done through the tax code. the reason why politicians prefer to do it by the tax code, you don't have one of the programs up for the annual appropriations process, and once it is written in the law, it stays there. something like home mortgages is designed -- deduction is to foster home ownership but nobody has to pay for it. it is just written in the policy. lots of times the objective it is not met. you see a lot of attention from

obama's this commission, and other commissions in washington, identifying them as real -- $1 trillion forgone revenue. a large sum of money. if you are talking about budgeting at the national level you have to look at this use of the tax code. a lot of these initiatives could be done at lower cost through the spending side, appropriations. or be eliminated entirely. a lot of them are regressive in nature and poorly designed. host: andrew fieldhouse is federal budget policy analyst at economic policy institute. "the wall street journal" took a look at the weekend at what the bill means the taxpayers. capital gains and dividends. current rates would be extended and the top rates for long-term capital gains and qualified dividend's, those from those stocks held longer than two months, would remain 15% for two years. what action effect does that have?

-- actual effect does it have? guest: you are thinking about marginal propensity -- what does a tax cut due to somebody's after-tax income. the vast majority of capital gains go to very high earners. this is a investment income. a lot of it probably goes back into the investment. you often see dividends reinvested in the stock market. in a lot of ways it increases wealth. not your checking account. the 15% rate, exceptionally low. google raw -- coup de gras a bush economic policy and would have very little stilted impact. in terms of long-term growth, there are reasonable supply-side economic theory is that suggest increasing investments in either the stock market and bond market

would have a tangible and -- return. in the near term i think it is a pretty negligible impact. increasing the what the people who have a lot of money -- wealth of people. this is one of the areas like the mortgage deduction that came up in obama's fiscal condition. the proposed taxation of capital gains and qualified dividend and taxing it as ordinary income, as we used to do. qualified dividend's as ordinary income during the clinton years. this is one area where you could see substantial savings, the reform of the tax expenditure code. and level the playing field between investment income and labor income. host: let us go to vince and, independent line in california. caller: good morning. i would just like to comment on a statement that andrew made about the tax code being a saving -- yes, they do benefit

the american people but i believe it benefits the wealthy allot more than they do most of the american population. the other thing i couldn't understand is how corporations can have the rights of people and pay very little taxes when it is the mom and pop businesses that employ most of the population in america. can you talk on that? guest: there is very little on the corporate side in this. corporate tax rates being unchanged. the hope of tax expenditures being rolled over, about $5 billion for an ethanol credit. over all it is a little over $80 billion for tax extenders for businesses and also accelerated depreciation. firms can expensive investments. in terms of the individual side, you are right, hugely

disproportionate amount of the bush tax cuts benefit the wealthiest americans and we are seeing an extension of those tax cuts and we are seeing an expansion of the estate tax, most generous estate tax parameters since the 1930's which i find to be an egregious giveaway of money. on top of the 2009 levels of the estate tax -- it is not the military. you cannot call it a measure for job creation. it is simply a transfer of wealth. what you do see beyond current policy -- the stability of a component of this package broken into three parts. the payroll tax cut, 112 billion, you have a refundable tax credit, earned income tax credit, child tax credit, earned income opportunity tax credit --

that has high bang for the buck. and the extension of unemployment insurance which is not even in the tax code but has one of the highest fiscal multipliers, dollar impact on economic activity for -- per dollar spent up. if you get a dollar to someone who lost their job and only has an unemployment insurance to form of income support they will spend it immediately, the money turns over in the economy quickly. to london and $12 billion of the package. a lot of the package -- $212 billion of the package. a lot of the package, estate taxes, and the amt patch, it does not change in the -- looking to trade off to london and $12 billion of hard-hitting economic stimulus at the expense of $130 billion of tax giveaways to the wealthiest americans. it turns the dial on unemployment but certainly the upper income provisions could of been spent -- the revenue could

of been much better in terms of stimulating the economy. host: in "the wall street journal" is a breakdown of what some of the benefits are to americans in the tax code. it talks about business investment, something you touched on. businesses would be allowed to depreciate at 1 under% in 2011 and 50% in 2012. host: this provision sort of accelerates the rate at which they would be able to expensed things over time. the important thing to note in this provision is that it does not have a very high expected economic return. mark zandi pegs it at 25 cents on the dollar. every dollar and foregoing -- forgone revenue, all expect 25 cents of economic activity. you can understand the macroeconomics. the federal reserve says the u.s. industry is running 75% capacity, massive

underutilization of labor and equipment. you have very little incentive for a business to invest right now. they have a very high capacity being unused. on the margin, what will make them invest more, i think less than supply side effects -- really demand. if they know the american consumer has money in their pocket, the american consumer is employed in doing well and seeing wages increased, then they will be able to buy, then you create demand and when you see the man you are forced to use of capacity and and and and invest in new capacity. it is unclear why it happened. very popular with the chamber of commerce. business tax extenders tend to have a lot of bipartisan support. it is similar to but not very. if you really wanted to address the u.s. economy and get back to potential you do more in the direct spending side than the supply side in businesses. host: andrew fieldhouse is our guest.

paul on the democrats' line. caller: i am glad to see the tax cuts. i believe -- i never got a job offer from a poor people so tax cuts for the wealthy is good. bill gates, i believe, did not sleep all day. people are mad about the tax cuts for the wealthy. i think they gave society and lots. my other question is, the question is, on the unemployment extension -- i worked construction all of my life, is this for hard-hit states or for every state in the union? there was an article in local paper that this is not for everybody, for the unemployment extensions. can you comment on that? guest:sure -- what is continued is emergency unemployment compensation program.

a program that has gone over time, as recessions have gotten worse. under the recovery act we created four tiers of unemployment compensation of the federal level because long-term unemployment was growing to be more and more of a problem. more than four unemployed for every job. not about people not wanting to work. about insufficient jobs about their paired the maximum duration of unemployment insurance with this emergency unemployment compensation program is 99 weeks. at the upper tiers, and it is targeted toward states that have high unemployment rates. i think the top is above 8%. but national unemployment rate is 9.8%. many states will qualify. "the wall street journal" had a good breakdown of how many states -- but most states see unemployment at least 70 weeks. the traditional state level

benefits only last for 26 weeks. so, this program is providing considerably more relief to states, and 99 weeks, while it is a long period, it is not that long given where the labor market is right now. we are about to hit 99 weeks after the peak in initial unemployment claims. so, pretty soon you will see a pretty steep drop-off. if this had not passed you would have seen 2 million americans lose benefits for all of december and by december of next year, 7 million americans would have lost benefits. there is a huge economic impact. you cut off income support for 7 million americans, it does a real member of the economy. council for economic advisers estimated this provision alone will generate 600,000 jobs in the coming year. you are looking at roughly 0.6% added to gdp growth. great economic stimulus. the department of labor recently released a study showing that you get a return of almost two

dollars for every dollar spent on unemployment insurance. we have seen the worst recession, worst financial crisis since the great depression. 50 million americans unemployed. broader unemployment rate, 17 -- 15 million americans unemployed. unemployment insurance is a great way to address the challenges in the labor market. host: andrew fieldhouse, federal budget policy analyst with economic policy institute. let us go to david calling some republicans line in st. joseph's, madrid. caller: hello. i wanted to make a few comments. apparently the message is being told but not being received. it is not the government's money. it is our money. we worked for it. we earned it. host: can i ask you a question? do you have a sense of how the

tax code will affect you next year, are you looking at how your taxes might change? caller: it is going to be good for to be extended, but as the healthcare bill takes effect i will get tax on my insurance -- not super grant insurance but they are already hitting me already. i already had a $30 increase on what i pay for insurance now because of the impending bill. guest: i don't think the increase in your insurance rate have anything to do with pending implementation of health care reform. if your insurance plan is not one of the cadillac plans, the most expensive, you will not see any additional tax on your insurance plan. the reason premiums skyrocketed because an insurance company is essentially a financial company. they collect from individuals. they have a massive amount of capital and when you see the stock market crash over 2008 and in the 2009 their phone defunds were de-capitalized. short-term financing constraint.

the solution is the premium. of course, they will jack up the premium. that is why you saw them shoot up 25% or 30%. unfortunately as the stock market recovers i do not think you will see it drop. certainly an industry that has incredibly market power budget not nearly enough competition -- not nearly enough competition. i did you actually see a decrease over time as more competition takes place in the exchanges. i think for you, this health care reform bill will massively improve your financial situation 10 years down the line. "thegot a story from washington times" do host: a story from "the washington times." its is the tax cut bill that gain final approval coming so late in the year has whipped up a mild panic for accountants,. staff, and anyone else who handles taxes. we have a question from one of our c-span viewers, linda writes

to us from west virginia that she has to make payroll to her staff on the first friday in january. will the irs had no instructions available or will we -- and guest: that is a great question. i did not envy the job. tax policy should not be done at the end of the year. a lot of the provisions in this bill are retroactive fixes for provisions that expire at the end of 2009, a shoddy way to do tax policy. the federal government just funded itself for a three days. we cannot pass any form of a long-term budget, yearlong omnibus appropriations bill was just shot down. tax policy should be thought through and done and had a time. this puts enormous pressure on the irs and employers like

yourself. this is not how tax policy should be conducted buzz -- but as you know the political reality is a little different. host: how could linda find out more information about what she could do as she prepares to deal with the payroll? caller: i would call the irs, frankly. they are the only ones who would know how quickly they are able to implement this. i am not an expert on the actual implementation side. it was something that was just passed a few days ago. host: and drew fieldhouse is our guest, talking about the recent tax code changes and how it will affect you and your pay and what you can also do with that money. we do have a couple of details to remind ourselves about what the provisions are in the tax bill, aimed at consumers. how it extends all bush era tax cuts. keeps capital gains dividend tax that top rate of 15%. it extended 2500 annual college

tax credit. extent of $1,000 child tax credit. boost the earned income tax credit to of 35% estate tax with $5 million individual exemption, and then at&t by indexing to inflation, 2% cut of the payroll tax and extend unemployment benefits for two years. a little bit of refresher. john, independent line in new hampshire. caller: good morning. i have a question for answer. we are talking about taxes -- i look at it this way. when we are talking about tax cuts -- i just got a new increase in my taxes for a town of 70,000 people, went up $414 for the year and they are not done yet, a $39 million school budget with a population of 17,000 people.

i am in the income of below 20,000. forcing me out of the house and all of this stuff. what is good with the federal taxes -- if the towns and state raise it so it is a no-win situation? mines will just leave the thing the way it is because there is no gain. all they talk about as federal. as soon as the federal drops, the state and local raises it and the stuff they spend the money on, even the government grants, they are putting in a bike trails and everything -- the way the economy is. in this town, we don't need a bike trail. it is unbelievably rural. guest: you hit on something very important. state and local budget crisis is a serious problem. we see spending cuts -- for the most part state and local spending cuts have had a drag on unemployment until recently and dragging on gdp growth and one

of the potential unintended tax consequences of the negotiations if it becomes easier for state and local to raise taxes. at the foot side is, would they be forced to raise taxes regardless of this package? probably. we hope it is stimulated on this. but the recovery act largely but to offset state and local budget cuts. only one economic actor can borrow masscult from international markets, the federal government. state and local are usually bounded by balanced budget amendments. federal government should have large cyclical budget deficits when the economy is performing 6% below potential. unfortunately the state and local budget situation requires tax increases. for someone in at your situation

i think you will be benefit by the earned income tax credit. it certainly the payroll tax. but i hope the austerity measures imposed at the local and state level are not so much that you are made worse off by this. i think it is certainly a compelling argument for more job creation on the federal level, to put the economy back given the state budget crisis will be lingering for two years. this problem does not disappear immediately. there is often a lag time. and the state budgets are adversely affected by this because they collected so much more revenue for -- from property-tax is. we saw the entire recession reduced by meltdown of the housing market to property-tax rates really taking a battering. we hope to be able to offset some of that and the national economic policy is to keep the economy running regardless of what happened at the state and local level.

host: "the washington post" created this look at how the tax bill is impacting the economy or how it is expected to. you can see that there is an increase in 2011, but when you go to 2012 and to 2013 it sort of flipped and then it changes. guest: you hit on something very important. the recovery act essentials ads as a drag on the economy. it is expiring as of the fourth quarter of this year. it will be taking a real hit on economic growth. looking about a percentage point shaved off. this tax cut package essentially

delays that impact, that drag for another year. you see a boost in gdp growth, the estimates of about a percentage point in 2011, faster drawdown of the unemployment rate but the forecast for 2012 actually deteriorated. it is possible the payroll tax cut would be extended for 2012. you mentioned politically very hard -- i am sure the forecasts are assuming the temporary tax measures remain temporary. we will see. if we continue the payroll tax cut for another year, continue the current income tax credit, child tax credit, possibly unemployment insurance, although the republicans certainly seem less inclined to do anything on unemployment and more inclined to do stimulus on the tax side, you might see an upward revision to the growth forecast. as it is, you see a big drop in

unemployment in 2011 and in 2012 the situation does not improve that much, maybe 0.3 percentage decrease in unemployment, still above 8% by the 2012 election. host: a question on twitter -- if the middle-class said some cash. guest: the economy will not before it -- perform well. the third quarter of 2012 -- 2010, the biggest driver behind economic growth, 2.5% annualized rate, was consumption, which increased at 2% of gdp growth. if the middle-class does not spend the money, if it is all saved or used to pay down debt, mortgage, credit cards, you are not going to see consumption rates hold up to keep growth alive. you are going to see a drag on the government side, the recovery act, and state and local budget cuts, adversely affect economic performance,

investment incentives, a celebration depreciation may boost a little bit but does not seem likely to boost investment by that much. i don't see how you get out of this economic sit with him without substantial increase for high-speed of consumption growth. if the tax cuts are all saved, you will not see that. this is why it makes more sense to cut taxes for someone more likely to spend on the margaret -- margin, lower income earners, does the estate tax giveaway do anything for consumption, no, it does not do anything to create jobs. host: matthew from north carolina, democratic caller. caller: i am a progressive in the middle of a lbj democrat county in north carolina. i'll ask this in parallel to what the gentleman said on health care. regulated a fact of health care caused all of this conglomeration in fixing the numbers and having people have to deal with the drug bill,

medicaid, those are all things that are pro-business. i guess my question is this -- if over the last 25 years -- worker productivity has made this boom, this growth, really just fostering the top, it has not created jobs, lose jobs over 30 years, why would it create jobs now and i want you to related to the lie of the lacquer curve. guest: i think it is very valid right now. you referred to the laffler curve, tax rate at 0% or 100%, the government is not collected and revenue and somewhere between that, hyperbolic curves,

and if you cut taxes, somehow revenue increases. that is your reagan revolution economics. i think the economic expansion between 2001 and to about 07, the george bush economic expansion was a referendum on that. they did the deregulation, cut taxes, we just extended the tax cuts, the core of the bush economic policies and you see the worst economic expansion in terms of gdp growth, in terms of investment, in terms of employment, in terms of compensation and wage and salary growth. the one economic indicator that really excelled is after-tax corporate profits. but the idea that you cut taxes for the wealthiest and it just trickles down to middle-class americans, i did not think there is any real evidence for that. i think you are right to be concerned that the regulation, too much accumulation market power and it is destabilizing. we have seen it in wall street and the healthcare industry. it is a hard thing to reverse.

certainly with citizens united, it is very difficult to attack corporate interests. the health-care package that passed earlier this year will turn the dial on that over the long term. and it is certainly necessary. not just the federal budget problem. it is a problem for households. premiums being jumped up 25% annually. this is a problem for employers, small businesses, all americans. budgetary implications but -- the entire budget, businesses and federal government a bust, i did not think you do that unless we change attitudes toward merits of deregulation. i think you need more regulation and more market competition and eventually we will need a public options in these exchanges. you need a federal government to force honest -- honesty. you could do with medicaid part d to the bush administration chose not to negotiate for drug

prices. it does nothing to constrain cost growth. it is a problem host: eddie, a republican in massachusetts. one last call with andrew fieldhouse. caller: andrew. we paid too many people too much money to do nothing. i am more inclined to go with the earmarks, a listing of doing something. i was elated when i heard nancy pelosi said she would consider lowering corporate tax. to stimulate manufacturing and business in this country. of course, you have to offset it with a sales tax. i see and are c-span sister channel that they are -- a sales tax on the internet. host: before you go, can i ask you a quick question? do you have a sense yet of how the tax code changes will affect your paychecks or what ever your income looks like next year? guest: even though i am retired -- on pension and social security, i still at income on

capital gains and mutual funds. that would be affected. thank you. guest: sure -- talk about lowering the corporate tax rate. there has been a big push, obama fiscal commission proposed lowering the corporate tax rate. they proposed instead of having a sales tax they propose the eliminating the host of corporate tax expenditure is -- fossil fuel production, oil and gas companies can expense -- hugely profitable industries. about $100 billion a year in corporate tax expenditures. if you wipe all of those away you could actually lower the corporate tax rates. doing so even and a revenue positive fashion. you would do a little bit to address the budget deficit or find a public investment, find a job creation measures. at the same time you could reduce the corporate tax rate which is and then that benefit all businesses, not just those

being successful lobbying for tax expenditure. i do not think you see much talk as a value added tax as an offset to corporate tax reduction. one of the commission's proposed a deficit reduction sales tax, which is really a disguised value added tax under a brand name. but there is a lot of opposition to the value added tax. republicans, conservatives, often viewed this as a way to massively increase the size of government. liberals often view this as a very regressive tax, lower income earners spent a much higher fraction of their income on consumption so it adversely affects them. you need more of says so you did up his people -- more people and above poverty line. is certainly a contentious issue. i think you will see some sort of sweeping tax expenditure reform, sort of brought in the base, and -- administration has

some interest in doing that and there could be bipartisan consensus. host: and zero fieldhouse, federal budget policy analyst at the economic policy institute. coming up next, talking about homeland security with a stored baker but first a news update. >> democratic senator chuck schumer, speaking earlier on "good morning america," says he believes the chamber will approve a new nuclear arms control treaty with russia despite republican opposition. he went on to say it will be open " a real slog," house by house combat, but he believes democrats will prevail. the senate passed the repeal of the ban against gays serving openly in the military and political reporting that gay advocacy groups are pushing the pentagon to implement the repeal in a matter of weeks about the service chiefs want more than a year to implement the new policy, citing the need to train the forces and prepare for open

service. the senate continues to work on a spending bill to fund but that the government until march of next year. r roll call" reports harry reid yesterday answered at language into the measure giving some counties in nevada and other states royalties from geothermal the a lot of projects. a previous spending bill was defeated by republicans because of more than $8.5 billion in earmarks like the geothermal language. close some of the latest headlines on c-span radio. >> tonight on "the communicators," the holiday season in full swing a discussion of the internet sales tax with scott peterson of the streamlined sales -- sales tax governing board and jerry cersale from direct marketing association. on c-span2. >> it is hard to get here and it is hard to leave here. but all of us to do leave and the senate always continues. >> search for farewell speeches

and hear from retiring members of both the senate and house on the c-span video library with every c-span program since 1987. more than 160,000 hours all on line, all free. it is washington your way. >> "washington journal" continues. host: stored baker, former assistant homeless security secretary -- stewrt baker. the washington post has a piece on monitoring of america. local agencies collecting and sharing information about their own citizens. we have been talking about this this morning. what is the relationship you are seeing between what the federal government does and what local community groups can contribute to national security? guest: the principal thing the federal government has done is provide funds for investigative activity, a gathering of information, and buying

equipment. that is pretty much what we have seen but also an effort to keep track of suspicious activity, to say here is somebody who was taking a lot of picture of the underside of a bridge, we should take a look at that person financing whether he is suspicious or whether to back this is somebody likes taking pictures of the underside of a bridge. host: when someone sees suspicious activity they have concern about something happening in their community, do they know where to go, and if you call the local police is there an official way for that information to get to people who do more than deal with crime? guest: there is not a perfect way to get information to the authorities, although to see some the -- the see something, say something, campaign is a mechanism for saying if you see suspicious activity then you ought to refer it to, usually the police. host: you were assisted home less secure secretary from 2005

until 2009. what was the interest in collecting information on americans in sort of a preparatory way? if there is a database, not necessarily for violations of people broke the law or pretentious as byssus activity? guest: i think there are two different things going on. eight the principal concern is whether -- the principal concern is whether there has been a gathering of information about innocent people for no good reason. and that is certainly something you have to worry about. but by and large the information is gathered because somebody has done something that seemed a little suspicious, and you might want to gather in little more information before you decide it is completely innocent. i think it is principally what this story talk about. people engaged in activity that seems a little suspicious. the police right down their names and report what happened.

and if nothing else turned up suspicious, then i think the end result is a pretty much nothing happens to the person that was reported for the activity. host: as you look to the christmas holidays people are reflecting on the would be christmas bomber of last year and certainly heightened security at airports with the increased travel. what keeping the likelihood that there would be some type of attempt or al qaeda event? guest: debt -- there does seem to be -- we have had two series of tons of bringing down an airplane, both in the christmas season. a first in a -- in the 2001, and then again just last year. so we do see some indication of where people are looking for a chance to bring down an airplane or otherwise carry out a terrorist attack right around christmas. so, it is something to be concerned about. host: we are talking to stewart baker about homeland security and potential terrorism threats

and safety. melissa joins us on the democrats' line, calling us from ohio. good morning. welcome, and go ahead. caller: how are you? i just had a question by wondering why sarah palin is so mad about the package deal? sarah palin seems real angry about what is going on and i don't understand. host: security measures and safety issues? caller: the tax cut. host: since we are taught about homeless security the have a question about terrorism and threats by u.s. -- since we are talking about homeland security, do you have a question about terrorism? caller: no. host: you are next. caller: i of watching a show that gov. ventura put on, and

these infusion centers is what they are called -- decant -- cats the first part? guest: gov. ventura and diffusions centers. caller: the fusion centers. he points out they are funded by my dollars but they have no oversight. nobody oversees what they do. they report to nobody. this is all video. he has the head of one of these fusions centers saying this. also under viet fema, h.r. 645, they built camps that look just like prisons -- razor wire, and his, but they are called community centers and they are for our protection from something. can you explain that? guest: i know a little bit about this. not too much. i have to say, jesse ventura has really got off the deep end recently. starting to claim -- sounding

very much like a truther, and i do not have very much time for that point of view. but the concern about oversight for fusion centers i think it's probably misplaced. there is a lot of federal funding for that but they are typically overseen both by the federal funders and both by the state to they are located in. i think there is oversight for those organizations, both at the state level and the federal level. host: from "the guardian" today, anti-terrorist police arrested 12 in u.k. rates, ranging in age between 17 and 28. guest: not a lot of detail. they say they caught this very early in the process, so they don't have cut a lot of information. but there are persistent rumors that a large number of people from the west have been trained

in pakistan and afghanistan and then sent back to carry out terrorist attacks, and we have been expecting efforts of that sort for some time. host: chantilly, virginia. john, republican line. caller: thank you for taking my call. the biggest issue that i awarded about is the mexico border. -- i am worried about right now. the mexican government has no power to stop these drug dealers. what we see every day is chaos. i don't know how we will stop the problem in mexico. i believe the trend -- threat is not only afghanistan and terrorism but also our border, right because our border. a lot of worry about what is going on in mexico. i don't think the government is in charge any more. guest: icing you are onto something -- i think you are

onto something. it is very troubling -- not just at our border but other parts of mexico as they struggle with very powerful drug gangs. there is a long and very strong tradition in mexico of being cautious about cooperating with the u.s. on issues like max. -- like that. it is not serving in the mexican government or the people well today. i know "the washington post" likes to make some kind of scandal that we are flying uav's of the border to try to catch people infiltrating. i think it is a good idea. i don't see a scandal there at all. they are arguing that it is somehow militarizing our response to homeland security. that is the first step. plenty more we should be followed to protect ourselves. host: our guest stewart baker is

former assistant homeland security secretary from 2001 until 2009 did and what he was there he greeted a staff, to enter the 50-person. -- 250-person. a comment from twitter -- talk about them. guest: a remarkably dumb comment. not a question of admitting it -- it is funded. it would not be funded without permission and approval of congress. have legislative foundation did created in -- consistent with the law and created with the knowledge of all the responsible officials in congress who oversee them on a regular basis. i don't see any basis for the question. host: talk to us what they are.

guest: what they do is -- the idea was a there is a lot of information about suspicious activity, and in some cases, organized crime, that no one jurisdiction actually has a complete picture of. so, the idea was, why don't we get state authorities, federal authorities, and some of the local authorities altogether so they can trade information right in at the same building, in the same office. it is a pretty good idea. i will not say it is god's gift to anti-terrorism but it is a pretty good idea. and some of them were pretty well. others, maybe less so. host: broken bone, and nebraska. welcome. caller: thank you very much. what i am calling bout -- the homeland security used to take care of the illegals.

do they still work with the illegal people? guest: what do you mean by work with them? caller: do they pick them up and send them back home? guest: yes, they do. you have to be careful because there are so many illegal aliens in the country that they really almost have their pick. but this administration has followed a pattern of doing two things -- they pick up people the catch at the border and send them back quite quickly to mexico or to other parts of central america. and they also go into the prisons and jails and try to identify illegal to are also people who have been arrested or convicted of crimes, and they send those back and it probably send more people back in the last year than had ever been sent back before.

so, while they don't go looking particularly for people who are law abiding and away from the border, they have been quite aggressive about sending home the two populations i mentioned. host: in the years since the attempted christmas day bombing, what have we learned and what has changed in security men -- measures? guest: we changed a lot, actually. first, i think everybody who flies is aware of this -- we do much more careful pat downs. some people would say more invasive. we have a millimeter wave machines to look beneath your clothes to find what bird -- weapons that might be hidden. and we have begun more aggressively trying -- this is just the beginning -- but we have begun using more intelligence to try to screen at

least trans-atlantic passengers in an informal way. and i think in the long run there is a growing sentiment that we need to do a better job of varying the kind of screening we do based on what we know about people instead of treating every grandmother and every four-year-old the same as people would just got back from six months in waziristan. host: the criticisms of the security at times is that it is a reactive, and that if somebody tries to put a bomb in a shoe, we look at issues, and if they try underclothes, look under the close. how will we get to more of the preventive the -- the line -- of two things. first, we have to be reactive. if we did not react they would keep putting explosives in shoes and underwear. so, being reactive is not bad. it is just not enough. the second thing, in my view, at

least -- and i have written about this and i have a book out about this -- what we need to do is really look for terrorists and not just for weapons. and have enough information about travellers so we can ask them questions about the things that are suspicious. we do this at the border. we identify people we want to question, even if they are not suspects. one out of every 200 people get a much more detailed look and they get questions, and all of their bags are gone through. but for most of those crossing the border, it is actually a lot easier than getting on a plane. that sort of intelligence- focused inquiry is something we ought to add to our air security program. host: greg in allentown, pennsylvania. caller: i am a ron paul republican and i think that the

bureaucracy that has grown up is just enormous, completely overpaid and completely unnecessary. in allentown, every single bridge is falling apart, covered with rust, we have bethlehem's steel was used to be a grand employer, should be immediately reopens and brought in as a generator of honest jobs. we don't need all of these overpaid government jobs destroying our economy. guest: well, i understand that. i am a republican myself. although probably not a ron paul republican. i don't think ron paul would support the idea that the federal government should be doing something about bringing bethlehem steel back. i did not think there is an immediate correspondence between bringing back bethlehem steel and the federal jobs we have. but i do think our budget is way too high. and we should think about cutting everything we can to get

our budget back in line with what we actually can afford. i certainly would not think homeland security should be exempt. host: should we look at what israel is doing and implement some of it? guest: may be. but let's remember israel has, i think, one domestic ports -- domestic flight and you could drive faster than you could get through your security process. almost no domestic travel by israelis -- a few tourists take one flight. so, they have a very different security problem than we do. second, i do not think people would like what they do more than they like what we are doing now. they are very detailed questions they ask you and they can ask you anything. i think it is fair to say they do a fair amount of ethnic and religious profiling that we

would have difficulty supporting in this country. i think we should ask people more questions and we should give to psa the leeway to ask more questions but i think of full-fledged -- to interrogate everybody until you are satisfied would not work. people would never get on planes. host: "usa today" reporter looks at an airline trade group, looking at ways to speed clearance for travelers deemed as low risk. he writes that they could be assigned to a tunnel that reflects their status. depending on biometric and other personnel information airline and government authorities have. guest: i think something like that is worth looking at. you can never say i trust this person forever, because there is an enormous premium of recruiting people who have gotten back. but you could have a system in which is sometimes people went

through stronger security and sometimes less and demanding security based on who they are. as i was saying, a system in which you very the amount of security based on what you know about a person only makes sense. the reason we don't do that, ironically, is that there was a kind of a left-right privacy attack on tsa saying you cannot even trust them with simple confirmation like where the traveler is going and what their names and birth date is. we have overcome that to some degree but we will have to make -- make a decision to trust tsa to make rational decisions about who should be screened more carefully. host: mississippi. independent line. caller: i am a retired federal firefighter, and the program this morning, like almost all programs i watch, has all the emphasis on protecting ourselves against the tax from some --

attacks from a foreign or domestic terrorists. but in our country, i can guarantee you, will be attacked by natural disasters every single year that will cost our country billions and billions of dollars and many lives. and we as a nation are still unprepared to deal with these issues. it has always been my sense is that if our public is as aware of what to do in a disaster -- whether a hurricane, earthquake -- earthquake, wild fire -- you would be able to save billions of dollars and millions, if not, lives, over the years, because people are prepared. we finally resolved the issue of how to notify when we had a problem by 911. even six-year-old children know how to call 911 and get help in an emergency. however, today, most communities

-- i live in hattiesburg, mississippi, which is absolutely a beautiful community -- but of the whole community on the gulf coast, if there is another terrible disaster like katrina, will probably not know where to go for medical assistance, for all of the things that they need to have. and they should know that as well as they know 911. >> i could not agree with you more. i think there is a difference between a hurricane and a terrorist attack in terms of threat to social order. but in terms of surviving both events, we have not done as good a job as we should have of getting the word out and taking personal response below before being prepared. we should all have three days to five days worth of water and food, batteries, ability to communicate.

we should know how to communicate with cellphone using sms, text messages, which is much more effective than phone calls to give you could give battery alive for days sending text messages for people whereas he would not get more than two phone calls out. and it would work better if some, if not all, of the towers were down. we do need to be more prepared. we all have to take personal responsibility. you cannot take -- say, i will not be bothered and then expect the federal government to show up and rescue us when something bad happens. it is just not the way the world works. >host: major on the democrats' line. new jersey. caller: i am an owner operator and a month ago i got my truck stolen at fort elizabeth -- i thought this was one of the most secure places in the country.

cameras all over the place. but i found out from the detective in the port that it is one of the worst places -- the cameras did not work, the resolution is terrible and you would think this would be one of the most secure places in the world. but come to find out, it is not as secure as we think it is. i think we are getting a false sense of security with homeland security. host: can i ask you, was there follow what do follow up because of the cameras? caller: there was no follow up. i had to go to them to find out what was going on because no one contacted me. and the officer, the detective i spoke with, told me my truck is probably out of the country, probably in the dominican republic by now. guest: i do not know the situation at port elizabeth. obviously some of the security is designed to keep people from

getting onto the base, or into the port, who should not be getting into the port. so, if they want to drive out, it is probably a little easier. want't disagree that you pretty good resolution of the cameras. again, they are not designed to catch people stealing trucks and driving them away. but i would talk to the coast guard -- there should be someone who is in charge, a captain -- captain of the port, who is concerned about security and tell him what you found. he may not have an understanding at a granular level of the weaknesses that you encountered. host: just a few minutes to go. a terminal at newark airport closed and bomb squad on the scene -- now been opened. the port authority has been given the all clear after the fbi determined a device that cause an alarm was actually a computer monitor in meeting small amounts of radiation,

which is normal -- in meeting the small amounts of radiation. guest: it is nice to know we are using radiation detectors unpredictably and networking. although obviously it is really inconvenient. host: shut down a terminal at the airport. guest: you would hope it would not do that, because this is not the only monitor somebody is going to want to send in air freight or even in their luggage. but i think we all know, you are not ordinarily subject to radiation screening when you go through air security checkpoints. so, this must have been some special check that they were doing to see what turned up. next time i suggest they turn the knob of little higher so they are not getting all the radiation in a particular

monitor. host: former assistant homeland security secretary stewart baker is our guest. republican from california. caller: good morning. i'd like to talk about something that they talk about all the time on c-span and that is these conspiracy theories about 9/11. here in california they had a tanker hit an environment of an overpass -- hit again enbuttment of an overpass. and every time someone calls and says that the jets could not have done that, i would like to refer them to the fact. i did that was about two months ago.

guest: i think is very important that the people that are rational about this, you understand these facts, actually effectively combat the release poisonous thought that the truthers are spreading out there, including people like jesse ventura, who has not flipped into that camp. the effort seems to me in the long run to take away the legitimacy of the view that the united states was attacked on 9/11 -- but you once say the united states was not really attacked, then the question of why it went to war in afghanistan becomes an open question. people can say, oh, it is because they hate muslims, etc., that is the kind of thing the across the world that is going to get americans killed. people like jesse ventura said maybe they set off charges

because they could not do it with a plane. at the end of the day, they are making it easier for the folks in the islamabad world to kill americans. that is a terrible -- in the islamic world to kill americans. that is a terrible thing. we should refuse those kinds of attacks. host: you have an opinion piece in the washington post in october looking at how -- looking at security in europe and how the relationship has hampered security efforts. you write that -- a line

guest: the europeans, the european parliament, the european commission have really taken a very aggressive, almost anti-american view here. i say that because they discovered the idea that we are gathering this information, which is travel reservations. " what cd doucet index who were you traveling with? -- what seat did you sit in? who were you traveling with? it is not particularly sensitive information. they said they did not want to necessarily let us have that information. they want to determine when we

can have that information and we can share it with. they are trying to rebuild the wall between law-enforcement and the agency that gathers that information. they have done it almost exclusively against the united states. this issue was not an issue with respect to the russians or the burmese or the north koreans or the chinese. they decided that it is human rights threat in the world was u.s. access to this information, this travel reservation information. they have launched, i think it is the fourth or fifth negotiation where they have tried to prevent the u.s. from getting that information. the most troubling thing that they did is they started threatening other countries that cooperated with us. saying, if you provide this information to the u.s., maybe

we will cut off trade benefits with the european union. it is a remarkably aggressive stance that will probably put some american lives at risk, and probably some european lives. we need to take a much tougher stance on this. we need to tell them, you have lost the negotiation you have with us because we believe in this. it is time to move on. let the secretary of homeland security spend time on issues beverley matter. host: tracie writes in and asks -- guest: pakistan is a very difficult problem. the problem is that why -- first, a lot of the people that we were after in afghanistan were getting safe harbor from the taliban have moved over to wilder parts of pakistan.

and for domestic and military reasons, the pakistanis are not comfortable, aggressively pursuing them there. there have been unfortunate use of terrorist activity by parts of the pakistani government over the past years. there is a kind of softness on certain types of terrorist organizations. and finally, the vast body of ordinary people in afghanistan are pretty hostile to the united states. cooperating with the united states is bad politics in pakistan. the we have managed to get the kind of corporation we absolutely have to have, but i would not describe it as a great relationship on a whole host of secondary fronts. host: story from the "new york

times" -- guest: i hope he is right on that. certainly, we have made it harder for folks in al qaeda who plan to the last attack to plan a new one. many of them are dead, others are on the run, they are incommunicado. they are afraid to use modern communications because if they do, they are liable to get identified and attack. at the same time, there is some evidence to show that they have enough confidence in their sanctuaries to bring a lot of people in from western europe and even the united states and give them training so they can carry out attacks.

i would not say we should be comfortable with the amount of pressure we have put on al qaeda in the wilder parts of pakistan, but we clearly have put pressure on people like bin laden. host: let's go to steve in geneva, new york, independent line. caller: good morning. fear andinterested in the break down. we have more warfare in class and the news. and then we have the history channel continuously with the 2012 end of the world, and that could be a self-fulfilling prophecy if people. enough. on top of the doll, more and more people more out-of-work or lose -- on top of it all, more

and more people who are out of work are losing hope. i remember this back in the '50s and it could happen again. guest: like you, but i remember the riots of the '60s and the people who lived through that never want to see that again. it was very frightening to see american troops shooting students on american campuses, cities burning and the like. we have not seen that for a long time. i recognize that we have seen, as people have had to deal with budget cuts, severe budget cuts in places like greece, or even in the united kingdom. that has brought out a certain amount of civil unrest and we could see that. the we are a pretty sensible and resilience country, and i think in the long run we will get through that. but it does mean that we will have to be careful about that. and careful about not letting

rhetoric get to the point where people start acting on it. host: lonny in winston-salem, n.c., democratic caller. welcome. caller: i have had a tendency since the late 1980's to actually tell people about terrible events before they happen. in 1991 as far as this conspiracy goes, i have a friend who had a cousin who worked in the twin towers and i told her to get her out of their on the day of the event by called 911 and told them to evacuate. for the recorded conversation, because before that happened, i had been -- i had identified in the olympic park malbomber.

i told them where he would be in the carolina mountains. he seemed to laugh about it, you know, call us back any time. i was a full-time engineering student all through the 1990's. if i had other things to do other than run my mother's a bill up. my point is, freedom of information. and the twin towers, as far as that goes, me having to explain to someone, she says, where you get your information from? guest: very quickly, it sounds as though you have insight into the future that is remarkable. and you are not getting attention. not surprisingly, people do not

tend to believe that. if you really want to prove that you have that capability, start a website, start a blog, start predicting events before they happen. view predicted three events in a row that actually happened -- you predict the three events in a row that actually happened, and if people start believing in you. host: what is the responsibility of americans to call and act on suspicious deaths? i'm sure your action-your answer -- to call an act of suspicious tips? pinjur your answer will be that americans need to act responsibly. guest: i think people should not be oversensitive. if you see people taking pictures in a place where you think, why would anyone take a picture of that? particularly if they look a little furtive about it or are trying to hide it, then you

ought to report it to the police. the police get lots of reports like that. most of the time there's nothing to it. but if they got 10 reports like that and it was the same car, but 10 different places that people were taking those pictures, they would be able to take -- put together an overall intelligence view of what is going on that no one person is going to get. i do not think the police are going to respond most of the time to the scene and arrest people just because they are swarthy and taking pictures. but they might ask questions and, certainly, if they got for five different reports. you should not say, oh, maybe in my being a profiler, and my racist? be sensible precaution -- am i racist? be sensible. host: fred on the independent

line. caller: i hope you will at -- allow me to ask this gentleman some bearing " -- embarrassing questions he does not seem to want to answer. he does not have a degree in psychiatry. he cannot call anybody off base about asking questions about 9/11. anti- says to attack the people that do that. then you -- and he says to attack the people that do that. then you have a lot of people 02 attack. you can see general wesley clark, he is nower -- he is now uther. rather than answer the questions that we are asking about 9/11, -- host: fred, can i interrupt you?

i think we've actually lost fred. guest: one of the things that the conspiracy mindset has demonstrated is that you can always come up with some wacky theory, or insist that there are more questions that have not been answered. i frankly think it's disgusting to suggest that the american government would attack the zero -- its own people on the kind of lame evidence that people are putting forward. i do not believe wes clark believes that. and fred, i think you should be ashamed of yourself host: last comment from twitter. guest: there is a risk in a bombing attack that has

collateral damage, and it is hard to imagine bombing attacks that do not have collateral damage, despite the efforts that we have made. and you do have to balance that. if you have killed a lot of people that are obviously innocent in your effort to get a particular terrorists, you are taking a big risk. at the same time, killing terrorists with cruise missiles and drones is one of the most effective tools that we have for keeping al qaeda off balance. frankly, if i got a shot at bin laden i would take it. if there was collateral damage, i would live with that too. most of the people traveling with him know exactly what they're getting into when they do that. host: former assistant home and security secretary, stored baker. and thanks for being with us. -- stewart baker. thanks for being with us.

>> it is 16 past the hour. the extension of the tax cuts for all americans is kidding -- giving stocks the lift. the law signed by the president on friday is expected to boost economic growth, although some critics say it will unnecessarily increase the federal budget deficit. the dow jones futures are up 35. new york senator corston gillibrand in remarks earlier says trimming some of the cost of the health care bill has addressed some of the concerns of some of her republican colleagues. it covers the first of responders after the attacks on 9/11. many of them have gotten sick and have since developed cancer or died. their average age was 46. north korea said it has decided not to retaliate today for a south korean bureau because the firing zones were changed.

it calls the droll's a reckless provocation. -- it calls the drills and reckless provocation. >> tonight on the "communicator's" discussion on the internet the sales tax with scott peterson and gerrie cerasale. that is at 8:00 p.m. eastern on c-span [applause] -- on c-span2. >> every morning is "washington journal" our live call-in program about the news of the day, connecting you with the elected officials, policy makers and journalists. during the week, watch coverage of the house and the transition to the new congress. and every week night, congressional hearings and policy forms. on the weekend you can see our signature interview programs.

on saturdays, "the communicator's" and "news makers. on sunday, q&a and prime ministers questions. is all searchable at our c-span video library. washington your way, a public service created by america's cable companies. >> "washington journal" continues. host: steve ellis, vice president of taxpayers for common sense, welcome. guest: thanks for having me. host: what is the most common provision in the tax bill that was just past? guest: when you think of the tax bill, you think of these really major provision, the 2001, 2003 tax cuts, the state tax relief, which was heavily debated, unemployment insurance. what we call focus on where these extenders and writers that caught a ride on this larger tax package, that really were not debated at all. you are looking at things like

a $6 billion provision to benefit ethanol producers. you have billions of dollars but are going to go for other provisions like state sales-tax deductions and things along these lines, and things all the way down to $40 million that will benefit owners of race tracs and around the country. host: what counts as a special interest? guest: is really micro targeted at that is going to go to a particular and to your interest. for instance, in one of these -- it is a little complicated, but essentially come on rum that is imported from the u.s. virgin islands or puerto rico, they pay an excise tax. under permanent law they get -- the two territories get money back, $10.50 a, but the last

little bit of it, every year they do a cover over to rebate the $2 of new presence back to the territories. it really does go to benefit the poor mary rum producers to do marketing. to some extent, our tax dollars are going to teach us to mosquito or -- to mojito or that we've got a little capt. in us. those dollars are going to help captain morgan build a new warehouse. it is money from territory to u.s. territory -- from u.s.

territory to u.s. territory and it is tax dollars. host: and it will cover the from excise tax of $235 million. guest: right, just for a year. host: and let's talk about these racetracks. guest: certainly, nascar is of interest to millions of americans, no doubt about it. but nascar does not own the tracks. there are corporations like the national speed with corporations and one other one as well that own all of these racetracks, whether it is talladega or daytona, watsons, glenn, those are old -- all owned by the same company that has spent the last several years lobbying for this provision. the irs made a decision a few years ago that these were not entertainment complexes like

going to disneyland. a track is not the same scene. they were going to be able to depreciate their assets over a longer period of time, which is obviously less valuable. the quicker you can write off when you have invested, the better it is for your tax burden. they have been doing in seven years, which is what is the man gets to do it. the irs interpretation was going to push it to 15, even after 30 years in some cases for doing grandstands, patronage, track of greats. -- grandstands, bathrooms, tracker rates. the irs came in and said, no matter what they will be able to depreciate in seven years. this has been extended each year for several years. it costs about $40 million a year. it is not a huge amount of money, but it is one of the problems in our tax code and the fact that we have these rifle shot provisions really do not

make sense in the overall tax code. president bush and the tax commission said that we should be reforming these special provisions. host: do these provisions get into the tax bill? -- how do these provisions get into the tax bill? are they the in the original language or in a marked? guest: -- in a marked up? guest: the nascar provision, the rahm provision, none of these are related to one another. but they have all been patched together and for years, they have been packaged as extenders. you may have a log rolling were your -- were you care about this provision, but not that one, but it almost forward. what has happened in the last two years is that because it is pay-as-you-go accounting, the

fact that you have to offset any tax increase with a decrease, essentially, nobody was willing to pay for it. $6 billion for ethanol was fine when nobody was having to pay. but actually, now you have to find an offset, that is going to pay for. it did not go. what happened is when we did the major tax bill, the one that everybody knows about, they caught a ride. waived paygo and they caught a ride. host: are these items that members of congress are proud of, that they tell their constituents about how they manage to get it because it benefits their part of the country? or are they under the radar and not necessarily tied to one person? guest: one of the things about the tax code is that it is a stealth the way to benefit people. when you do the spending of

actual dollars, there is a check, a ribbon cutting, something is billing -- being built or something is being done, it is very hard to understand. it is complicated. the people know about it, the people who advocated for it, they know the lawmaker credit for them or that it was extended. there are millions of dollars being spent every year on campaign contributions and lobbying. certainly, something as high- profile like the ethanol excise tax credit that god extended for almost $6 billion for another year, -- that got extended for almost $6 billion for another year, the core producers know who did this. in some respects -- the corn producers know who did this. host: here is a story by matthew murray. it talks about the last-minute campaign to reduce the industry's funds in the hundred

$50 billion tax package. there is this effort that is going through and people are trying to call attention to it. senator dianne feinstein told will call that she is attempting to lower the ethanol subsidies by 20%. she called a bad policy and said it must be fixed. guest: and you have senator feinstein, a democrat from california, joining with the senator kyl. it shows some of the breadth of the extension of the tax credits. you had some groups that were concerned about gertrude prices. you have some groups that are -- a grocery prices. you have some groups that are concerned about the prices of this across the world. if you have the free-market groups that are all concerned about the issue. we have a broad coalition, but

yet, lawmakers were willing to snatch defeat from the jaws of taxpayer victory on this particular issue. one of the things about ethanol is that here is a provision -- you know, the government has many ways to provide -- to support an industry. weekend -- we can use taxpayer dollars, mandated to use, or have a tariff. with ethanol we actually have all three. we have a tariff against foreign ethanol and we have this excise tax credit. the mandate, the 12 billion gallons, that is what drives the market for ethanol. that is what the sides that we are when to use it. this tax credit is just a

subsidy essentially saying that we are lining the pockets of companies like shell oil that are landing, rather than actually making any changes in policies. host: from this reason roll-call peace -- roll call piecewill cal -- guest: and there is no doubt that he is right. he is the ranking member on the finance committee. it also people like senator conrad, the budget committee chairman from north dakota. basically, if you grow corn, you like ethanol. if you live anywhere else, it is a bad deal for you. host: our guest steve ellis. , the numbers are on the screen.

we are talking about a special interest, -- we started out special interests, provisions in the recent tax bill. cliff goodrich role -- let's go to control. caller: how is it that democrats are deciding whether a crawl as a food or drug? alcohol is a food or a drug? guest: that is a good question. they're having this debate over whether to give this a tax credit back to these jurisdictions, back to the virgin islands and puerto rico. basically, they were using the funds to build roads and like i said, some advertising funds in pr. but in this case they are actually building this distillery. it is unclear to me of congress

make that distinction. host: looking at what was noted , $162 million for u.s. film and television production. guest: that is essentially to try to promote that for many years people would go to canada, for instance, to film in the united states. in reality, the question is, do they really have an effect? the fact that these get extended year after year after year is that nobody is really looking to see if it is promoting production in the united states. what would happen otherwise? almost 40 states have provisions to try to promote television and film production in their states. and if everybody is doing it, it does not really matter. it becomes a subsidy that they were just going to pocket and

they were already going to film in alabama or detroit or wherever. host: is there anything new in this? guest: there is not a lot new. it essentially became an end of the years sort of thing and it was things that were already debated. there were things that were kind of new to us. we looked into one thing that sounds really good for food inventory. essentially, if you have food that you want to donate to food banks that appears to be -- by and trying to remember the word, that was not helpful. host: wholesome. guest: yes, and it could be past its expiration date, it could be not marketable because it does not look good. basically, you could just a pure food and get a tax credit ordaz- dump your food and get a tax credit for it. host: and that is $92 million for taxpayers.

next call, go ahead from ohio. caller: is it true that this could cost taxpayers $6 billion? guest: is true from the perspective that being held from a lower tax rate. there's also the estate tax. host: let's go to our next call in florida. will the democrats line. -- will, on the democrats line. caller: thanks for taking my call. the question i have, and it is kind of bothering me, i live down on the coast and i spend a lot of time on my boat. the problem with a tunnel that

has been documented so much with the marine industry, the motors with small engines, we keep subsidizing ethanol and it has been written up in a lot of voting books and stuff. corn is so destructive to our soil is going to be like the dust bowl because we have to read fertilize -- we have to be fertilized and -- refertilize and it is not only is so destructive to our agriculture, but the cost in the marine industry, the equipment, it has gone to the place where we are going to destroy ourselves. i cannot afford a new engine.

wehrli going such a destructive way? -- why are we going such a destructive way? guest: that is a very good point. one of the issues is small engines. essentially, there is an issue with the attractiveness of ethanol. it is the same reason why it cannot go in the same pipelines and as our oil as well. it is essentially destroying these small engines. epa is talking are making it in 85/15 planned. but the dollar also made a good point in that it goes into even our farm policy it is promoted over others. when you go into corn, there is used to be -- it used to be that they will allwould alternate wih

other crops. corn requires using nitrogen and other things that are not so good for the soil. there are some unintended consequences that come out of our subsidies policies, whether it is the ethanol or two are our cultural policies and the farm bill. robert ins go to oregon, independent color. caller: good morning. excuse me, i have something in my throat. but i guess it's all right now. i carry the title -- i do not use it often, but i am a professor emeritus. as far as ethanol is concern, it produces less mileage then gasoline, by far, and it is

also destructive to rubber tubing of any kind on your engines. and as the previous caller said, using corn to produce ethanol deprives it of the feed for cattle and raises the price of beef. since we have made -- an abundance of gasoline, it seems to me that the use of ethanol, which produces less mileage than gasoline, is ridiculous. and the subsidies for farmers to grow corn that we can i use for other things is observed. guest: he is absolutely right. it is absurd in a lot of ways. his point about the rubber tubing is correct as well. and all of this produces less btu's.

they gallon of ethanol is less -- a gallon of ethanol is less explosive than a gallon of gasoline. but also, going to will's, and as well, why is it still going on, part of this goes to senator grassley in iowa and it is a huge producer of ethanol. where do we have the first caucus? is in iowa. every president has to been a need to the ethanol industry and talk about how great it is. some people lose the iowa caucus because they were so against the

use of ethanol, like john mccain. or there was another candidate that joked about having a glass of ethanol every morning with breakfast. how host: are the special provisions in the tax code different than his remarks? guest: they're not that much different than the remarks. obviously, in -- and your mark goes to one particular -- and here mark herean earmark those to one particular entity, a clear address. but these are definitely for just a few entities. beside the fact that they distort the tax code to certain areas and to promote certain businesses or even industry, they are siblings, if not the same. host: last week of my organization released this

fiscal year 2010 ranking by a member. this got scuttled over the weekend, but still, this is where things are going. some of the biggest year markers are are actually republicans. -- some of the biggest earmark ers are actually republicans. guest: and if you look at the top five, the next three are democrats. and you have a pretty big thing here. clearly, they start with themselves. i always think about the tower of champagne glasses at a wedding. the first one gets fall and then everybody else and the youngest

congressman get their little drops finally. but they were, by our count, there were $638 billion in the remarks that did get scuttled. -- in earmarks that did get scuttled. host: how did this compare with previous years? the guest: is down a little bit from -- guest: it is down a little bit from -- when we do an analysis we look at about seven years of bills. we tried to make that information available on our website. last year there were disclosed earmarks.

we have a slightly different definition. compared to last year, there were $10 billion in disclosed earmarks in fiscal year 2010 and there were $3 billion in disclosed their marks in fiscal year 2011. one of the reasons for that is that many of the republicans have a moratorium on your marks. there were only four republicans that did not go along with that. who: let's hear from donna, joins us from newcastle, pa.. caller: could morning. -- good morning. i am really concerned about this. and i'm seeing, like with senator grassley, for example, you know, with this ethanol

thing in the whole cornyn thing and all of that. and him bragging about it. -- the whole corn and of that. and him bragging about it. it is the poor people that are going to suffer. and i am one of them myself. when the new house members come in and the republican senators coming in, what is actually going to happen? they are already talking about screen social security out. -- is growing social security up. cutting spending. clean some of this crop up. please. guest: she is right. you need to cut everywhere. and certainly, there has got to be a lot of targeting across the board. the commission report really did look at everything.

they looked at entitlements. they looked at spending and i taxes. things like the ethanol excise tax credit, they did not target it. they may have started it in a specifically, but generically, -- targeted at it this was of a good, but generically, we need to be looking at these provisions and the tax code, sort of like what we did in 1986 with the last tax reform. when we need to look at how to make social security more sustainable and how to get discretionary spending under control. those are all things that congress is going to have to -- congress is going to have to walk and chew gum at the same time. the only way to do it as to tackle them all at the same time. host: pat on the independent line. caller: thanks for taking my call. the comment that i have is considered in the tea party.

i was amazed at how much impact they had and they hired all of these new republicans in congress. and they hired them because they were under the impression that the verbal genser were going to actually -- the republicans were actually going to cut out all of these earmarks and spending and what not. how does the tea party feel now, because they are not marching on washington and we are not hearing from them as much -- but how do they feel about the republicans allowing these special provisions and these tax bills to go through? it is just shameless luxury. guest: pat is on to something in the fact that once you get them elected, you have to hold these people accountable. most of the people with the tea

party, or that were elected in the 2010 elections have not taken office. at least the newly elected people. we will have to see how that shapes up in the house with the new republican majority. but clearly, in the senate, i would argue that people who are going to go along as -- business as usual have their knees shanks. democrats were going to go along with the omnibus and they turned at the end. even the republicans that were going to vote against it for being criticized because they had earmarks worth billions of dollars. the senator from kentucky talked about how he was going to vote against it and it was a bad bill, but he had $112 million worth of the remarks in the spending bill and has long been a proponent of them. he was for them before he was

against them. people are starting to call people -- lawmakers are on that. there was a press conference where two congressmen were questioned about why they were not announcing -- not renouncing their earmarks. senator hatch actually did renounce his earmarks. the proof will be in the pudding. once we get into january and there are these newly elected theicials, strengthening piozz majority, we will have to see whether they deliver the goods. host: you have been with the taxpayers for common sense for 10 years. how poplin you is -- how

palpable and new is this issue of frustration oover earmarks? a guest: i think the public has a recognition of that and it has culminated over time. the democrats won the majority, in part, on running against jack abramoff, duke cunningham -- the former congressman who is now in prison -- the highway bill. those things all sort of resonated and they came in and made the remarks more transparent. they absolutely did. -- they made earmarks more transparent. they absolutely did. but when you look at the deficit situation, people picked up on that as well. from our organization's point of view, it is not just about earmarks. they are a small percentage of the overall federal budget, but it is one of the areas that

congress puts a disproportionate amount of attention. and i think if people have been in washington too long they just start to say it is just $10 billion. it does not really resonate with the public. if we can look a projects on their merit, then we can start setting funding priorities and we can have merit based systems to award funding. that will cause a ripple effect across government beyond earmarks. also, we want to see congress hold the executive branch more accountable. your marks have been eight giving away for -- earmarks have been a convenient way for the executive branch to engage. we want to see them holding the executive branch to account on how they spend on new priorities and how they meet the various -- those various formula in other

programs. host: taxpayers for common sense has completed an initial database of over 6700 earmarks with over $8.3 billion in the failed spending bill. let's go to a caller, santa barbara, california. hi, linda. caller: i want to comment that the tax code is a major source of power for -- i would say, all politicians who have the ability to tinker with it. and that is why they resist anything that resembles a flat tax and the code is increasingly more complicated. maybe 50% of the people who do not pay taxes, is there any chance that we could get real

tax reform to stop this abuse of the tax code? guest: linda brings up a good point. this is actually a state-federal issue. chief justice john marshall talked about the power to tax and the power to destroy. it is an enormously powerful tool for congress to do good or and a lot of times it is unclear what they are accomplishing. the caller mentioned that about 50% of people do not pay tax. it is actually to income tax. they do not paid in -- they do not pay payroll tax like social security and medicare. in reality, the issue here is very clear that these micro targeted provisions, like some of which are in this extended package, but others are literally across the code and even others that were in how the

2001 or the 2003 tax bills, things like, the marriage penalty relief or the child care tax credit, these are targeting -- for instance, there is a tax credit for having a kid. is someone going to have a kid based on the tax credit? i certainly hope not. but the question of why we are doing targeted provisions throughout the code, supposedly we are promoting home ownership through the home mortgage interest deduction, but really can't have a little higher interest rate than the united states does and does not have that provision. we had a major reform in 1986 where we eliminated many of these targeted provisions and to lower the overall tax rate. expand the base, lower the rate.

what happens is, it is sort of like a forest. you have a forest fire and clear out all of the underbrush and the underbrush starts growing and building up. we are really due for another brush fire. one of these things in the extended package was a deduction for the state's sales income tax. that was eliminated in the 1986 tax. it is really something that was going to target benefits -- a benefit states that do not have income tax. states like texas, florida, north dakota and alaska, these are all states that have no income tax. they therefore gave real benefit out of the provision. host: the estimated cost to taxpayers, $2.8 billion. let's go to john in now kicking in mexico. -- in albuquerque, new mexico.

caller: this is a great conversation you're having, but for years i could never understand, how companies can claim a sporting event tickets and claim that they are a deduction. for years i had -- i saw that happen. that is not a business expense. they deduct their ranches, everything they buy. baited up their ski boats and their trips. then they deduct all the ball tickets. -- they deduct their ski boats and their trips. they deduct all of their ball tickets. the will never watched a ballgame the same way again. -- you will never watch a ballgame the same way again. if they could not do this, then you would see these tickets -- the ticket prices drop and the

average guy could go to a game. guest: this is really arcane stuff, the tax code. trying to figure it out, and it is not written in a layman's way. and the variety of the deductions, a few years ago a small front -- a friend of mine had a small business and i was trying to open figure of deductions and he said, i do not need any more deductions. i need more money, but not more deductions. host: jr. joins us on in texas. caller: thank you for having me. the reason i am an independent is because the democrats and republicans are a party of one now. i will give you an example. republicans want to send jobs overseas for lower wages over

there. democrats want to bring illegals here for lower wages over here. the oilfield that exploded up in louisiana, 200 miles from where they shut those oilfields down, they are building them over in and the epa is over here claiming it is bad for energy. how many millions of dollars today sen that country over in the middle east to build oil fields? our government sent it over there, not the people in the middle east. our government did. guest: there are a variety of -- and certainly, there are times. george orwell in the "animal farm" talks about how the

animals and humans start looking alike. there are plenty of republicans and democrats that are going hand-in-hand. it is going to be a challenge for these organizations. we put together coalitions to tackle spending of beverley are the left and right. we have done stuff -- that's really are the left and right. we have done stuff with both sides. that is sometimes we need to do to shake things up. -- that is sometimes what you need to do to shake things up. james ordaz -- host: james writes in -- let's go to charles in connecticut. caller: would like to make a comment that was said earlier about the president's commission and giving them credit for

attacking social security. all they have done, really, is promote the same things that have been done over and over, raise the age, raise the taxes, cut out a certain number of people. the problem is that we have done this over and over and over since it started. the problem with social security is that it is fundamentally wrong in the way it works. people will constantly get older. we know that her medical records. there are fewer and fewer people supporting each one that is on retirements of the because of demographics. social security has to change. it cannot be just a bunch of bandits. guest: -- a bunch of band-aids. guest: to some extent, charles