national captioning institute] [captions copyright national cable satellite corp. 2010] host: one of the moments as jerry brown was sworn in as california's mill was governor. 23 states will have the governors. 18 are republicans, four democrats and one independent. the common theme for all of them -- looking for ways to cut spending. it is tuesday, january 4. the president returns yesterday -- later today, back to work after a 12-day vacation in

hawaii. he will sign a food safety bill, estimated cost $1.4 billion over the next five years. outgoing speaker nancy pelosi holding a news conference on capitol hill outlining the democratic agenda as the democrats move into the minority at the 112th congress. tomorrow, the focus will be on representative john boehner, who will be the next speaker of the house. this week, bearing the inaugural ceremonies of many of the governors. our question -- with states facing budget shortfalls and red ink, what are some of the solutions? how you cut the debt and what impact it's having on your particular state? let's look at some of the headlines courtesy of the newseum. "the l.a. times" has caught the

ceremony -- a photograph of the ceremony yesterday. back in 1975 as jerry brown was sworn in as the youngest governor of california. now at the age of 72, the oldest governor, serving a third term. one of only two governors who served three terms in california. the other was earl warren who served almost three terms before he was appointed by president dwight eisenhower to serve as chief justice of the united states. "orange county register," brown sworn in. the troubled california. "the miami herald" with republican rick scott taking the reins today in tallahassee. we will have live coverage of the ceremony at noon eastern time. he plans to lower the pension cost and florida by $1.4 billion and slash state expenses as a

way to offset potential budget deficit in florida. this from the front page of "the new york times." turning to laws to curb unions. pointing out that faced with growing budget deficits -- the elected officials from maine to alabama are pushing new laws is listen to limit the powers of labor unions. here's more from the ceremony yesterday in sacramento as jerry brown elected as the governor in

one of the most -- in races in the midterm election. returning to the job be held. >> it is a tough budget for tough times. when dealing with a budget gap in the tens of billions, i must point out that there is far more than waste and inefficiency that we have to take out. yes, government wastes money. and i will be doing a lot about that starting this week. but government also pays for things that most people want. and that are approved only after elected representatives debate their merits and finally will ban into law . they cover the spectrum -- from universities, parks, health care, prisons, income assistance, tax incentives, the environmental protection, fire fighting, and much else. but choices have to be made. and difficult decisions taken. host: by the way, governor

brown's speech is available on our website, c-span.org. you can join the conversation by sending an e-mail at journal@c- span.org. a couple of editorials from "the new york post." another big state facing a looming debt. another editorial from "the wall street journal." blue men group, talking about ic governors. governor clinton and illinois proposing to raise $15 billion in new bond revenues -- gov. quinn in illinois. also saying the liberals that dominate the legislature in

california are unrepentant and what governor brown to help them avoid serious cuts to close a $28 billion budget hole over the next 18 months. with that background, we want to hear from you. the state budgets. your solutions for cutting the debt. we begin with california. joe from the independent line in lancaster, california. good morning. caller: hello. we need to start enforcing laws we have already on the books. we don't need new laws. we are wasting massive tax dollars on fraud in california. it needs to be cleaned up. welfare system is broken because we are not enforcing our laws. host: we will go to ann in new york city on the democrats' line.

caller: new york, florida, california doing a lot of cuts and a lot of it is falling on the workers, the middle class workers. i resent so much that the republicans would not make the top 2 percent -- 2% or 3% richest people in the country make a sacrifice as well. i think it is time for class warfare in this country. host: from "the new york post, what this editorial cartoon for the radio audience -- outgoing governor paterson whiz andrew cuomo walking into a burning building, governor paterson saying goodbye, and good luck. steve is joining us from princeton, west virginia. republican line. how the use of the state budget problems? caller: start drug testing every under age driver and anybody that takes any state assistance -- welfare, food stamps, things

like that. that would help with policing the borders. that would be an excellent way of reducing the drug market. the headline inside "the washington times." brown said to govern and different california. now vernon, georgia. good morning, democrats' line. caller: talking about the state budget. in the two things. business know-how and sacrifice. a lot of people talk about spending cuts. but it will also take the taxpayers willing to pay higher taxes -- not just for the rich, but everybody has to share in the sacrifice in order to cut the budget. it also takes smart politician to know how to do this and not afraid of the politics and not afraid to take on big unions and

stuff like that. host: ok, thank you for the call. next is ken joining us from new york. independent line. caller: one suggestion would be for more states to consider unicameral legislatures. it works in nebraska. host: thank you for the call. from "the new york daily news." gov. andrew cuomo trimming his salary, 5% cut. he will earn $170,000. asking the same from some of his senior advisers. also the issue of taxes coming. in a ceremony that took place in albany, new york, over the weekend, here is more from andrew cuomo who succeeds david paterson and follows on the footsteps of what -- of his father mario cuomo. >> we have to pass a property-

tax cap in the state of new york because working families can't afford to pay the ever- increasing tax burden. nothing is going up in their lives. their income is not blowing up, their bank accounts are not going up, their savings are not going up. they cannot afford never ending tax increases in the state of new york. and this state has no future if it is going to be the tax capital of the nation. we have to send that signal this session by passing the property tax cap. host: the fred hot -- headlines from "the new post." let millionaire taxes die out. he is saying, read my lips, no new taxes, and that includes levies on wealthy new yorkers, he is setting. he is against extending a temporary income tax surcharge on high income earners in 2009 set to expire at the end of 2011.

back to your calls. would stay to run the country facing budget deficits, what are some of the solutions? donna is joining us from michigan. you also had a new governor, republican governor, in michigan and also the highest -- one of the highest unemployment rates in the country. caller: good morning. i am calling because we have a new governor. but if our legislature is going to continue to act in the same way it has in the past, he won't be able to do much to solve our problems. the legislature every year spends a good deal of time arguing whether they are going to raise taxes -- republicans say, no, absolutely not. nothing ever really gets resolved. then at the last minute they finally, with some kind of arrangement that is not

satisfactory and does not really solve the problem. one year they even shot the government down for a couple of hours. host: sorry, did not mean to cut you off. caller: i did want to make another point because this is michigan. we are called the rust belt. i would like to start calling us the water bills. -- belt. because we have so many good natural resources and i would like to encourage lots of businesses to come here and see how wonderful michigan is. host: that is what we heard yesterday from the governor in his remarks. donna, thanks for the call. from "the chicago sun-times." is a bill daley president obama's next chief of staff? bloomberg news first what the story. also the story inside "the washington post." bill bailey could succeed rahman

and will. brother of chicago's mayor. again, bloomberg news first reporting this. william daley, who served as commerce secretary, in line for possible chief of staff. more on that later today. mary is joining us from detroit. welcome to "washington journal." democrats' line. caller: good morning. i am calling because the way to get the budget down is -- with the social security, giving

people only getting 600 or 1500, they should have gone the cost of living because some of them, that is all they have pared number two, they should take social security and allow you not to collect social security some years if you want to and give you a better interest rate later. that means some people might take it two or three years and they don't have to be paying. i am just making a comment on some of the ways to cut down on the cost. host: ok, thanks for the call. again, the front page of "the miami herald" says schwarzkopf set to take office in style. -- rick scott set to take office in style.

with all of this, how the state cut potential that? most states have a balanced budget rules of they cannot carry on the debt. cbs news reporting the federal deficit now reaching $14 trillion. you can log on there and see a graphic that gives you just where we are looking at in terms of the federal budget deficit. congress expected to vote later this spring on raising the debt ceiling. although that is also a huge political issue because of implications for both democrats and republicans. georgetown, indiana. good morning. caller: good morning, c-span.

i would like to start off by saying -- there is more than one way to skin a cat. we as the working poor in the united states are that cat. when we get our money away in our small communities to the big corporations that can actually start making money before they make the first -- they promised these elaborate jobs and living wage jobs. as soon as they tax -- runs out, they run out of the community. off to china or mexico. if we talk the tax evaders and make a living in our community. coming into our community because of location. they always say location, location, location. why can't they come into the community because they can make a living, because of different things, like the woman said,

natural resources. let's not give them anything to come into our communities. when these businesses start to come back from overseas -- believe me, they will, because we will wake up sooner or later and they will find out if they want to sell their products, it will make them in this country. no incentives and tax breaks. host: back to the future in california. a front-page story in "the wall street journal." photograph of linda ronstadt and governor jerry brown -- and then yesterday. the state facing a $20 billion budget gap. shreveport, louisiana. good morning. caller: to good morning, c-span. i am a c-spanaholic. i love c-span. the c i -- thing i see that all of these new governors that will take office, they should just do

away with their inaugurations, just have simple gatherings, not make it so elaborate like they are pompous kings and something. it's got in california, governor brown served hot dogs -- host: in california, governor brown served hot dogs. caller: it is good. i have good friends close friends about -- that are close friends with linda ronstadt. she was on stage in las vegas or something and said something about george bush when she was singing, and, of course, she had not been around for a while so the audience was not aware of her popularity in the 1960's, so they had to have per escorted out by police because she was bombarded because she said something about the bush. it goes to show you how people can be brainwashed into thinking that everybody is right on the republican party but not the democrat party. we made a new party in this

country. we need a third party. no labels as a start. i think it is a great idea. you have a group of people in their from all sections. host: we covered that event, bob witt, the new labels conference over the holidays. it is on our website. thank you for the call. former gov. edward edward set to leave prison soon. from the oakdale correctional institute. after serving 8 1/2 years of a 10-year sentence for bribery and racketeering. that story this morning from " the times picayune" web site.

state budgets. what are some of the solutions for cutting the debt? $140 billion across the states. donna is joining us from maine. good morning. caller: what i keep wondering is how come nobody seems to address the problem happening across the country with u.s. corporations. according to an estimated $1.97 trillion. host: this morning in the money section of "usa today" on that very topic. caller: basically if that money were circulating, unemployment would probably drop below 3%. it would help the state level as well because if you could take 10% of the people and put them to work, things would be up stray across the boa i can't understand why they are warning that kind of money. host: thank you for the call.

from our twitter page . devising a likelihood of real reform, calling it a conundrum. and this is an e-mail, by the way, politicians run on a platform on cutting spending -- martin o'malley serving a second term as governor of maryland. , is joining us from baltimore on the republican line. caller: i think we should cut out -- a lot of people don't know this but every state in this country gives money to israel. it is time we cut back on that money. that would help many states. we are in the worst financial condition here in this country since the 1930's. i would like to hear some jewish people coming out publicly and request israel to forgo any

welfare from the states or the u.s.. host: but you know that is a small percentage of the federal budget. caller: i don't care. i want it done anyway. host: leave >> in atlanta. democrats' line. caller: thank you for c-span. i look at the deficit as being part spending and growth. we have a lot of and this is of the spending part but not on the hard work it takes to grow case state. arnold schwarzenegger, he had a youtube note about how small businesses came to him and he looked at the state and how inefficient his government worked to get them going. seoul, i would say that if these local governments would ramp up the economic government -- departments that actually function and measure of a domestic growth and so forth,

they would do well. i would also say these investigations -- this might go to the federal level -- spending all of this money such as ken starr did it, again, it happens on the local level as well. keep focusing on building governments. then you have the type of revenues that will help deficits. host: this comment from email. from the twitter page and you caller: how are you doing? my comment is the northern states that have snow and stuff should eliminate a lot of these

state employees, because they have them on the payrolls for maybe 15 snowstorms a year. whereas if they privatize it, it would probably cost a 10th of what it would cost for those employees and equipment that the states have. the towns have the same problem. half of their equipment is allocated for snow removal and they don't use it other than for those 15 days a year. and all of those guys are on the payroll, getting benefits, retirement, and everything, whereas if they privatized it, it would cost a minimal amount. host: thank you for the call. snow removal and gov. chris christie, the decision to stay in california. the governor takes to the air to defend his vacation. sitting he was still in charge.

steve is joining us from edge of water, florida. caller: i would like to suggest the states and the federal government consider chapter 11 bankruptcy proceedings in conjunction with a constitutional amendment that forces everyone to live up to a balanced budget going forward. newt: let's go back to the " york times" story. it also points out it is not only republicans seeking to rein in the unions. in addition to governor cuomo pause in the year, california's democratic gov. jerry brown promises to review the benefits received by workers and a state which has a shortfall over the next 18 months.

next is gary joining us from columbus, ohio, independent line. caller: i just have one question. i would just like to know that why it is about all the politicians in our country it seems for the most part talk about saving money and fixing the deficit but at the same time they throw these outlandishly lavish, let's say, parties -- what what i call them? when that money could be used -- they are supposed to be going to work to solve our problems and they are out showing off a good time for people because they won the election. they are supposed to be at work for us. host: in many cases, though, the inaugural ceremony is paid for by campaign funds. but it is an issue and the front page and "the miami herald" with an elaborate ceremony for governor rick scott.

we will have it today noon eastern time. he is a republican governor in florida. congress rediscovering the constitution is the editorial in "the wall street journal." and "got a problem with the constitution?" and editorial and "usa today." the ceremonies that will take place tomorrow at noon eastern time at the swearing in of the one under 12 congress. coverage gets underway with "washington journal" at 7:00 a.m. eastern time leading up to the ceremony at noon and a reading of the constitution will take place thursday and next week we are hearing the house will vote on the president's health-care bill that he signed into law last march.

house committee outlining the agenda in an e-mail sent out yesterday. the present already indicating he would veto any plan to -- president already indicating he would veto any plan to do that. jasper, tennessee, on the line for republicans. good morning. caller: one comment quickly, first of all on the article you mention. you know, the constitution is something people argued about from time and memorial. hamilton and jefferson both helped write it and still did not agree. they argued until hamilton got killed in the dual in 1804. main thing -- the public unions being made a scapegoat. all the idiot's pointing fingers at government workers who get paid less most of the time and that is why the retirement benefits are higher. they did not get as much money. they have more job security. now they are trying to make them the demon. the real daemon is the fact that this country has gotten so

skewed in the wealth that the top 1% get 25% of the income and on 40% of the financial assets in the country. i think if we just -- that a little bit, there would be more money for everybody but there is too much political and -- not enough political willpower because all the congressmen are bar off. host: from the twitter page. we are going to come back to more of your calls. the questions we are asking as we are hearing from state governors being sworn in today in florida, yesterday in california and over the weekend in states like new york -- wisconsin. we will get more of the state of the state address is as we move into the legislative sessions in many of the state but we want to turn to politics. we have live coverage of the five candidates try to be the next chair of the republican national committee. one of the questions asked by

tucker carlson, looking ahead to 2012 and sarah palin. here is part of the exchange from the national press club yesterday afternoon. >> can sarah palin when a general election? >> yes. >> yes. >> whose turn is an? >> yes, absolutely. sorry. >> yes. >> that was on yesterday's debate. the entire debate is available on our website. mes is joining us. for someone who track this for politico, one of the words on your web site was subdued, the tone and tenor of the debate. what would you take away from it? guest: yes -- absolutely. there were not the fireworks that were expected. in a lot of ways, michael still is seen as a dead man walking in terms of winning a second term. the majority of members of the

168 of the republican national committee will make the decision general reporting already indicated they will not vote for him. so, the four competitors running against in for chairman didn't want to bayonet a dead corpse essentially, the metaphor we used in the story. initially the beginning of the debate, form as your a gop chairwoman anne wagner took a pretty hard line on the problems that the republican national committee, including the $20 million in debt that they have, as he said it was time for tough love. but then she backed off after michael steele pretty vigorously defended his record and the other members seemed like they were trying to win over some of the michael steele supporters who would -- lead him on a second ballot. no one was too hard on michael steele because they wanted to win over some of his supporters. host: constituency is small.

160 members of the rnc. some in attendance yesterday at the debate at the national press club. a lot of attention on priebus -- talk about his name, growing up in dutch and german family. anne wagner, a former co-chair of the committee. cino do does not help a lot of public support for our kids busy. and the former chair of the michigan republican party. guest: ultimately, like you mentioned, former michigan gop chair was comfortable onstage but second in the count right now. my colleagues did a canvas of as many of the 166 members as they could get and priebus as the

most commitment -- is the front runner but you need 85. it is a wide open race and most certainly will go to a multiple ballots affair. probably a race between priebus and wagner. host: the budget situation for the republican national committee, they think a $20 million shortfall in the next year. saying that is priority one. almost refering to dialing for dollars to offset the deficit. here is more from yesterday's debate. >> i think in the future we do need to fully fund the tv effort across the board, whoever that may be pared the states, the rnc, and it comes down to money, resources. you heard the estimates.

i think everyone here would agreeing that the number one challenge to moving forward is raising about $400 million over the next two years, which basically means that the next chairman as going to be sitting in the office for five or six hours a day, running from major donor list, setting up meetings, national finance network and team in order to fully fund all of the programs. we cannot go into 2012 having to make decisions between which the effort we fund and which one we don't. host: one of five candidates for rnc care. -- chair. did he close the deal yesterday or did he become the center of the tax from other candidates, most notably wagner, close behind him in terms of committed rnc supporters. >> somewhere in the middle. the very much behavior during

the 90-minute debate as the front mother and he did not take on michael still was an old ally -- he had been general counsel of the rnc, and he really thought to stay above the fray. he presented himself as the un- michael steele. exceptionally gaffe prone, and a series of scandals and rnc got more attention than the members wanted and a lot of the major donors that he was referring to -- they gave money to national republican congressional committee and a republican senate committee this past cycle because they saw the rnc as quite dysfunctional under michael steele. so, he was positioning himself as someone who is really going to book is on fund-raising, is not going to have a huge national profile, will not do a lot of tv and will focus on raising money, bringing back the major donors and putting the ball party's house in order.

the same theme was echoed by everyone else. a portion in the debate when they were going through issues. he played the clip, they talked abut sarah palin pit remarkable unanimity of thought on all the big social and fiscal issues facing the country and the party. the candidates ideologically presented themselves more or less the same. saying that they are the most competent to handle the financial issues facing the republican national committee. host: one of the clear after effects of the citizens in any case was outside money. we saw it with grass roots -- american crossroads, basically separate from the republican national committee with the same goal of electing republicans. does it dilute the value and role of the rnc outside the party convention in 2012? guest: absolutely. the republican national committee is a much less powerful group. although it is different because

president obama is in the white house. the outside groups have really taken a lot of the power away. and the owners really want to have a big and targeted impact on specific races are, in some ways, much more savvy to give money to the third-party groups because they know it will go x race or spent this way or will not have to go to overhead. one of the criticisms of michael steele is he sent a lot of money to islands and territories like, instead of spending it on american states. one of the quirks like rnc, a place like guam as republican national committee members to vote in this election. rnc is much less powerful than it used to be because of that money. one of the interesting questions was maria cino, who had been longtime gop operative who worked in the bush white houses said the biggest mistake in the last decade was passing mccain- feingold.

now post citizens united it does not have as much impact. host: when headline from "usa today." michael still defending his record two years as chair of the rnc. >> i am a glass half full kind of guy. i don't see the crisis as some may see it. i don't see it as something where the alarm bells are going off and you start remaking and blowing up. but what you do is you get down to the heavy burden some work of building. and we did. in 2009, new jersey, virginia happened. beginning of 2010, massachusetts and hawaii happen. and we began to see in our cell of the opportunity to win. and as we get through this next cycle, that reality conference as larger than anything else. we fired pelosi. the democrats wanted to --

the opportunity for all of us now is to go forward, to continue to build on success is that we have had. and i ask for your support in doing so as chairman of the republican national committee. a eighth of this headline from political. a majority of rnc against michael steele. where do we go from here in terms of the winter meeting that will take place later this month? guest: members of the rnc think the republicans won the house and all the gains in spite of michael stale and he thinks they made the gains partly in because of him. it openly michael steele is almost certainly not going to be reelected to a second term. the race will be decided at the winter meeting which is on january 14, next week, and it seems like the race will be between priebus from wisconsin,

ann wagner. it is in washington, d.c., prince george's county, where michael steele is from and came up politically. the weather replaces him is definitely going to take a lower profile -- whoever replaces him is going to take a lower profile. and dealing with the $20 million debt. ultimately for a lot of the 168 people who will be taking a vote, they will be looking at who is able to raise the most money and focus on being attentive to those republican national committee members. host: national political reporter for political. his article is available online at political.com pared back to your calls. a couple minutes left with your comments on state budgets. front-page of "the new york times" with this headline.

republican lawmakers from indiana, maine, missouri, and several other states planning to introduce legislation that would bar private-sector unions this comment from our twitter page. that is his comment. diana is joining us from california. caller: good morning. a long time, no talk. my comment -- congratulating governor brown. i know governor brown. and in 1978 he signed an

extradition and a governor's warrant for extraditing my ex- husband back to california for kidnapping my son out of state. anyhow, i welcome him back as my governor again. i have been in law enforcement for technique -- two decades. what i feel we should do in the state of california is reactivate -- it was called form 69, a california highway patrolman and law officials used when out of state vehicle -- when somebody moved to our state, it was mandated they register the vehicle and paid taxes to the state of california -- the tax on the vehicle, registration fee to the state of california and not just sitting there paying $20 to the state of missouri and live in california and have our freedoms out here and our luxuries'.

in addition, mandatory that they register their vehicles and get a current driver's license. as far as military personnel -- we have a lot where i was in the county. they keep their registration, from wherever they are going back to or their home state is. but people coming here to move, to live, to work, they should start paying more and in need to reactivate it. it brings a lot of revenue back to the state of california. host: thank you for the call and for checking in with us again. anne has this comment.

congressman darrell issa, the front page of "the washington post." below that is a story about the house democrats. nine freshmen in the new congress. the smallest newhouse class for a single party since 1915. we will have the coverage on c- span, your place to watch the ceremonies and the speeches of incoming speaker john boehner and outgoing speaker nancy pelosi and the ceremony will take place in the house. and of course in the senate. democrat still a majority in the senate and the swearing in by

vice president joe biden. that is live on c-span2. you can catch and also on c-span arabia. -- radio. pat from jacksonville, florida. caller: the conversation about michael still was living. i support michael steele and i think the tea party does and i think he has heavy support on talk radio so the fight is not over yet. a gentleman called in any mention foreign aid to a particular country and he said that adds up. you said it is not a big item. i think the point he was trying to make is that congress sets up programs -- foreign aid, department of education, an executive order, and it sounds wonderful and nobody ever tracks. for example in florida, as you mentioned, it has a billion dollar budget deficit this year. and our school classes as a result of one executive order by bill clinton, we have to teach stannous -- spanish, have to

have textbooks and classes in that, with haitian creole, portuguese, arabic, somalian. we have to get text books, translators for every student who speaks both. in duval county, the budget last year was $1.3 billion. this is one counted. $110 million went to teach children who do not speak english. you multiplied that, every county in florida, every county in the united states and pretty soon you are talking about real money. the gentleman mentioned money to israel. we give them $15 million a day. israel could buy and sell as. we gave pakistan $100 billion. we did not know what happened. congress, they create, they do not go back and check. they did not sit down and have a committee and actually make a list. i think this is what has happened. i enjoy your program so much. i really do. thank you. host: thank you for the call.

headlines from "of the detroit free press." republican of michigan replacing gov. jennifer granholm. one idea, a two-year budget deal done without raising taxes. that story. shock is joining us from palm coast florida. -- chuck. caller: as moderator of hope you will draw me out a little bit. host: we will try. caller: like the lady from jacksonville -- i honestly feel like the federal government is illegitimate. i have said this before and i get raised eyebrows from the other moderator's. but the federal government has usurped the states' rights. it is not following the constitution. our congress is not set up the way they are supposed to. not doing the job the way it is

supposed to be done. states are autonomous, sovereign and the federal government is an organizing principle. the constitution is the basic law and organizing principle of the various states. civilt know -- since the war the federal government has taken this position with the states are subservient to them. and they go about doing things -- unfunded mandates, like the lady from jacksonville was talking about, and the states have to just sort of follow. well, i would love to see the vice president actually take the chair of the senate, and unless there is a majority of states that want to have something done, if they see a need for a national solution to the problem, they have every right and the world to do things how they wanted. here in florida, we did not do things the way they do them in, say, wisconsin or minnesota.

host: in wisconsin, gov. scott walker inheriting a budget shortfall. and over all looking at states around the country in total with $140 billion in potential debt and the next year to 18 months. in most states requiring a balanced budget. let's go back to this other chart from cbs news. the national debt now topping $14 trillion. the latest posting from the national debt clock. u.s. treasury reporting as of the last day of 2010, the national debt standing just over $14 trillion. and the debt ceiling, the federal debt ceiling is $14.30 trillion, which means that congress is going to lead to a vote on that probably in the spring to raise the debt ceiling or face a potential of a government shutdown. caller: that is what i talking about. the federal government is out there doing things that give the states were actually asked, do

you think there is a need for a national solution to a particular problem? the state's need to come in through our senate. this -- the senate represents the state legislatures in government. and house of representatives represent the people. that is where the conversation is supposed be taking place. and the congress, they just goofed -- tell the states what they are going to do. the states have to have the right given back to them. host: part of the debate over health care and the house rules committee. an e-mail that was sent out yesterday. the house will consider next week what they call "repealing the job killing health care act constructing committees for it -- replacing the law . that vote is set for next wednesday, jenny were 12, on the

house floor. one final point from a viewer -- that was the cause of the crisis. why do they think more debt will get us out? coming up, we will talk about the health care bill with new jersey democrats frank pallone. later, we will turn to the set tuition in pakistan. is the government stable? home prices down across most of the country. what impact, if any, does it have on a recovery in the u.s. and could we face a double dip recession? all ahead as "washington journal" continues. it is tuesday, january 4. back in a moment. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> the 112 congress gavels and wednesday with the swearing in of members, election of a new house speaker and a vote on new rules. watch live starting at 7:00 a.m. eastern on "washington journal." interviews with members, leadership, reporters, and your calls right until the house gavels in at noon right here on c-span. >> i think news organizations have adapted. is it great that over all news organizations probably not doing as much foreign news, more domestic news, but the public bears some responsibility. the public bears responsibility of keeping themselves informed. >> sunday, abc news senior foreign affairs correspondent looks at the wars in iraq and afghanistan on a political, strategic, and personal level. "q&a." on c-span's >> the c-span networks, coverage

of politics, public affairs, nonfiction books and history, available on television, radio, on line, and social media networking sites. and find our content and a time through the c-span video library. and we take c-span on the road with our digital bus local content vehicle, bring in resources to your community. it is washington your way, the c-span networks, now available in more than 100 million homes, created by cable, provided as a public service. >> "washington journal" continues. host: congressman frank pallone, democrat of new jersey. welcome back to c-span. let's begin with some of the news of the day. house republicans taking control tomorrow and next wednesday. vote on health care bill that the president signed into law . what is the significance? guest: i think it is a huge waste of time. what i understand is they would do an outright repeal, very simple. and, first of all, i think the

bill actually accomplished a lot and a lot of the patient protection provisions have already kicked in. january 1 we had significant ones, about 50% discounts for seniors in medicare with prescription drugs. the fact that health care premiums, 80% have to be used for paying benefits. and when i spoke to people, i think the general feeling is, look, we had this debate, let the bill play out, let provisions again, and see how it works, and if we have to make changes, eventually we will, but i think most americans want us to focus on jobs and the economy and they did not want to repeat this health care debate, which is what the republicans seem determined to do. host: but congressman david dreier is tolerant -- calling it a job, health care bill, putting unfunded mandates on states. guest: again, i did not think it is the case at all. from an economic point of view,

i think the health care bill actually improves the economy, it actually creates jobs because much of the funding goes to help community health centers to hire more health care professionals. beyond that, also over 10 years it reduces the deficit by $100 billion. one of the things i was amazed to see is that the new house rules that come into effect, i guess, tomorrow, if they are passed, would actually exempt that $100 billion deficit reduction from being offset in any way. so i think he is wrong. the health care reform actually helped the economy and it decreases the deficit. host: the deficit and the overall debt continues to grow. this is from the treasury department. we had a $9 trillion national debt in 2007. we went up to $10 trillion in 2009. and we now exceeded $14

trillion. let's put one figure on the table. we have gone from $13 trillion up to $14 trillion in just seven months. how did that happen? guest: i think part of it has been economy. i think the major part the economic downturn. but a major part is what happened during the republican years under bush when all we really did was basically reduce taxes, primarily for corporations and the wealthy, and that old trickle-down theory did not work. the economy got work, fewer jobs were created. also, the war in iraq and afghanistan were not paid for in any way. when democrats came in four years ago we took the majority, we instituted a very strict pay- go rule and now with the republicans are going to do tomorrow, as i understand, change that dramatically and that thing basically their goal is to go back to the same bush

economics which is to be centrally -- essentially to allow tax cuts to not be paid for. and i think they will start a whole new round, if you will, of trying to help the wealthy and big corporate interests by giving them tax cuts and tax breaks, which is only going to increase the deficit more and not create significant number of jobs. host: if you look at the next two years -- because you have the bush era tax cuts agreed to by president obama and democrats and republicans in congress. that is a lot of the land next two years. taxes will not be going up. where do the cuts come from? where did you bring the number down? guest: the way you will ultimately improve things is to improve the economy. this congress is to focus on jobs. it does not need to rehash the whole health care debate. you can create jobs through a

combination of tax cuts and also reduce spending -- new spending on things like transportation to create jobs, building roads, also helping with mass transit. but what i see on the republican side is just going back to the old bush economics. all they want to do is encourage more tax cuts and not focus and target spending in a way that is actually going to create jobs. we had the pay-go rule and now they have the cut-go rule, saying if you want to spend money on domestic programs, decants offset by closing tax loopholes but you can reduce -- you can't offset it by closing tax loopholes. and the deficit keeps ballooning. i think the way they are going about it is very hypocritical. it's good republican, darrell issa, new chairman of the government oversight --

host: republican darrell issa, new chairman of the government oversight committee, looking at freddie mac and fannie mae and also wikileaks, his opinion that the justice department did not do enough to go after julian assange. guest: again, same thing. i have no problem with oversight. that is part of congress that irresponsibility but i think spending all this time on oversight on things that did not directly relate to the economy and job creation. i think the lesson of the last election is americans want us to focus as a laser beam on job creation and the economy and spending time on some of these peripheral things, you know, again, i don't -- the public doesn't want congress to waste its time. they want us to zero and exclusively or prioritized the economy. host: democratic leadership, is in the house meeting with reporters. you are in the minority. what is the agenda, what are the priorities and how you get

anything done being the minority? guest: i think we would like to work obviously on a bipartisan basis. that is the most important thing. guest: the lame-duck was actually a very productive time. the tax-cut bill was a way that the president could show he could work with the republicans and the democrats in congress as well. i know that the democrats would really like to see more bipartisanship and working together. again, like a laser beam on the economy and job creation. host: cutting internal budgets -- should members of congress take pay cuts? should staff take a pay cut? guest: my understanding is that we will have a 5% or less budget cut across the board for a house

offices. i have not exactly seen what john boehner has proposed, but that's what i've heard. host: do you like that idea? guest: in these times, it makes sense to see where we can cut. host: congressman fred upton appeared on fox news two days ago. the issue of health care came up. here's more from that exchange this past sunday on fox news. >> as part of our pledge, we said we would bring up a vote to repeal health care early. that will happen before the president's state of the union address. we have 242 republicans. there will be a significant number of fodemocrats, i think, that will join us. when it passed in the house, it only passed by seven votes. if you switch four votes from last march, that bill would not

have gone down. we will take the democrats who voted no. we will take other democrats who probably agree with speaker nancy pelosi's statement that we will pass this and then see what is in it. now we know what is in it. it is unpopular across the country. i do not think we will be that far off from having a vote to override a veto. host: congressman frank pallone, again, more from the republicans. the vote will take place next wednesday. guest: understanding is that they will introduce it tomorrow. this is a huge waste of time, as was said by the commentary with the fred upton. the senate has indicated and certainly the president, that they will not take up this repealed. why are we doing this? the problems that the health-

care bill addressed, the lack of coverage for more and more americans, and premiums, they are not going away. this was an honest attempt to come up with a solution to try to provide more coverage, and to try to stabilize premiums, and to provide patient protections. why would you want to start the new session with an outright repeal? it seems to me that it makes a lot more sense to let this unfolds. the patient protections are gradually unfolding. the coverage rules will gradually take in. on general one, 80% of the premiums have to go towards -- on january 1, it kicks in that 80% of premiums would have to go towards it. this is having a very positive effect. if you are reasonable about it, we will say, let this unfold.

have some oversight hearings and propose some changes as we go along. that is fine. we can work on a bipartisan basis. to start out with this repeal as the first act of the congress, it's a misplaced priority. host: the next cep will be to take different aspects of the health care bill and have a series of votes that could deny funding. guest: again, that is the same thing. before you even let the measures in the reforms kick in and have a positive effect, you try to take away the funding, which is the same as repeal. they never get off the ground. i think that is a huge mistake. if we start to see all the emphasis in the republican congress on repeal of the previous congress did, and oversight in many areas that are not related to jobs, i think the public will be very upset with the republican leadership and what it is trying to do.

host: $14 trillion. that is one of the news items today. that's what we're facing in our national debt. the white house senior economic adviser said that if congress fails to increase the debt limit, it would be catastrophic. we heard from incoming republican michael kelly and michelle bachman saying then they will not vote to increase the debt limit. guest: the tea party is not being practical. the full freight and credit of the united states is at risk. how do we operate as a country if we refuse to honor our debt? frankly, i think it would result in a worldwide depression. i cannot imagine that. again, it is this reckless idea that is basically ideologically based.

if you listen to what some of the tea party leaders are saying, it's all ideology. they're not concerned about the practical impact of what we do here in washington. host: we are talking with new jersey democrat frank pallone. steve is joining us from south carolina on the line for republicans. good morning. caller: good morning. the democratic platform is based on making life fair for everyone. the meltdown was due to careless banks and careless investing. another one was the government telling people that everyone deserves homes, regardless of their ability to pay. i cannot believe you would look at the camera and tell everyone that the meltdown was caused all by the republicans and george bush. i cannot believe you can actually look at the camera and say that. now you want to tell everyone that you can make health care fair for everyone. you have some sort of magical bullet. every time you try to make

things fair, like giving people welfare, you end up devastating the family. every time you make things fair or try to make life perfectly fair, it causes tremendous problems. and then you turn around and obfuscate the whole blame and act like george bush repealed glass-steagall. bill clinton did that. host: steve, thank you for the call. we will get a response from congressman frank pallone. guest: you mentioned several things. on the health care initiative, you said -- do i think i have the magical bullet? i do not think i have anything magical. i'm saying let's get away from the ideology. let's talk about the practicality. the fact of the matter is that premiums continue to go up.

in many cases, double digits. more and more people do not have health care coverage. more and more people using emergency rooms. your people see a doctor on a regular basis. we spent years coming up with a measure that would practically address that. you may argue whether or not it is. i'm saying let's have an opportunity to test it and let it play out. if it does not work, we will go back again. what the democrats have tried to do over the last two years in trying to address the economic downturn has been very practically oriented. the republicans said they did not like the stimulus -- the recovery act. it was a practical solution to create jobs and prevent job losses. that is the fact of the matter. most economists say two million jobs to 3 million jobs were

saved. maybe you do not like it, but at least we're trying to do something to make things better and not go back to another deeper recession or depression. let's work together in a practical way, democrats and republicans, to try to find solutions. the tax-cut bill that we passed in the lame duck was an example of one way that we can come together and try to find solutions. not everybody agrees with that. maybe it will not work either. at least we are trying on a bipartisan basis. host: representative frank pallone in his 12th term in the house of representatives. he is also on the house natural resources committee. another critic is gary, who points out -- if anyone needs to tighten their belts, why didn't the democrats reduce overhead expenses when they had control of the purse strings? guest: 40 talking about congress? -- are you talking about

congress? host: the 5% pay cut boehner has proposed. guest: is that is what he is proposing, i think that is something that should be implemented. you know, rather than saying it is a democrats and republicans initiative, but let's just try to save money. host: this your says the republicans never created a health care plan. instead, they destroy, destroy obama's plan. guest: that is all we hear -- let's repeal the obama plan. we have an immediate problem

here. more and people do not have coverage. premiums continue to go up. we have a solution that is in place. it seems to me that if you have this problem, it makes no sense to say let's repeal the solution and try again when we are in the midst of this huge problem. host: janice joins us on the line for democrats. caller: good morning, representative frank pallone. representative, as a member of the grass roots of liberal constituents, i wish to warn the democratic party, but also the others, that prescription drug fix is a measly piece of junk. i'm going to tell you of a z.org.e, eemocrdemocrat

we are willing to written to aid.anies like right te- we're going to rip into some ohio companies and an ohio a kentucky company. the dcc chairman, mr. israel, he voted for medicare part d, which is a slush fund for drug companies. i'm not going to give any money to the democratic party because of that. we are going to go after the companies that give money to

conservatives with boycotts. people can go to that address, www. democratz.org, and they can sign a position that says we want a comprehensive legislation action, and we're going to boycott these companies that give money to conservatives. we know that asking john boehner directly and mitch mcconnell directly -- we know we will get nowhere. we're going to go after their corporate donors. thank you very much. host: we will get a response. congressman pallone? guest: i do not know if you wanted a response, but i will say this. the health care reform was a practical solution. of course we had to get the necessary votes to pass it. some people prefer a single payer system. some people wanted a public

auoption. in terms of the prescription drug benefits, it does go far and ultimately eliminate the donor hole. prescription drugs go up over a certain amount during the year, they do not get any help. last year, 50% discount on brand-name drugs and once they reach that level -- that went into effect on january 1. the drug companies had to agree to the 50% discount. this was an effort to try to plug the donor hole. it will be eliminated over the 10-year life of the bill. i think it makes more sense to continue with this and let it play out rather than talk about

trying to come up with some immediate solutions right now or outright repeal, as the republicans are proposing. twitter page --r twitter fro guest: the president is taking a two-pronged approach. to. -- to the deficit. when he inherited the deficit, we had to have some spending to get the economy moving again and create jobs. if you look at the budgets he has proposed, there have been cuts in a lot of programs. i also think you have to be careful. you do want to address the deficit over the long term. it was also necessary after the

recession to make sure we did not starve the federal government and states so much that the recession got worse and became a depression. we give money back to the states for teachers and police and other purposes. i think a lot of that was necessary. host: david is joining us from new jersey on the line for independents. good morning, david. caller: mr. pallone is a picture of everything that's wrong with congress. first of all, he has been there too long. he has no idea what goes on in the private sector. he set up and watched the pharmaceutical industries, the growth and visioengines of our , get hurt by his colleagues. it is an absolute lie that this

health care bill will lower the deficit. as a matter of fact, what they did -- i am an accountant by background. they took revenues for a longer period of time but did not take cost until four years into the program. he then tells the people -- oh, you should not even try to change this. it's like he is a ruling elite. it's like he has contempt for the people. i got my new health-care statement for this year one month ago. it says right in a statement that because of the health-care bill, your premiums will rise. it is in it in plain english. he keeps going on. he has contempt for the average person. even the way he looks at the camera is like -- don't tell me what to do. i'm a congressman. last part on bipartisanship. he set up and rejected every

amendment that came from the republicans. i have watched this. he does not realize, or maybe he does and he does not care, that the people who watch c-span -- you cannot sit there and give talking points. we know what is going on. every amendment like buying insurance across state lines was rejected by the democrats. now he talks about bipartisanship. there's not a bipartisanship bone in his body. it's really sad hos. host: thank you for the call. guest: david, the pharmaceutical industry worked with the democrats and the republicans in putting together the health care reform. we are very supportive of what we were doing. they had to give back certain things, but they were still supportive of the initiative. reduction in thedictio

deficit, we go by the congressional budget office did it says that it reduces the deficit by $100 billion over 10 years. some people say they should not be the arbiter of these things, but they are under the rule. i know that the health insurance companies are increasing their premiums and blaming the health care reform for the increases, but that is not the case. you simply cannot believe them. who is in favor of the status quo? the only people in favor of the status quo before the reform was the insurance companies, because they continue to raise premiums and exclude people who have pre- existing conditions. they have all kinds of caps on coverage to make it more difficult for people to access care. naturally, they are going to tell you that the health care reform is t bad. they want to continue to increase premiums and put all kinds of limitations on access

to care. you simply cannot leave them. host: if you're listening on c- span radio, we welcome your calls as well. our conversation is with democratic congressman frank pallone, who is part of the 112th congress that will be sworn into office tomorrow. we will have live coverage, beginning with "washington journal" and the ceremony gets underway at noon eastern. dennis joins us from michigan. good morning. caller: good morning. happy new year to the both of you. would like to ask a couple questions to mr. pallone. one, why has health care never been put on a national referendum for the citizens to vote on so you would get a true feeling on what the people actually wanted, an?

that point.get to guest: we have a representative form of government and you elect representatives to make these decisions, rather than have a national referendum on health care or other initiatives. that's a more direct form of democracy, but that's not what we have. you could argue that about any bill. i think we've had two years where we debated this. we've had numerous hearings in committee. my own committee had countless hearings. after two years, we adopted a bill. that's the process. i do not suggest we get rid of the representative process and move towards national referendums on every important issue. host: dennis, we will follow up caller: i concur with what he says and i agree to a point. with things like health care bill, and as explained, it has

taken two years of debate, it is still dragging into a third year. i think that is a protracted this agreement upon the implementation or the people's agreement to such a plan. i just want to know what exactly will be the outcome of this health-care bill. thank you both for your time. guest: dennis, i'm not suggesting that we should continue to debate and have oversight of the health care bill as it takes in -- kicks in. i'm saying that we should not waste our time by repealing it out right and start anew. i think that's where the waste of time is. i think that is where the new republican leadership, instead of doing that, should be focusing on the economy and jobs and not rehashing this whole

debate. host: paul ryan is another key player. anne has this twitter question . guest: one of the things that really bothers me about the rules package that the republicans are going to adopt tomorrow is that the chairman of the budget committee, it gives him the absolute authority to decide on spending and revenue limits to the appropriations committee. it's not at all clear if there will even be a budget resolution. i think that this granted that authority to the chairman of the budget committee under these new rules. i think it is very arbitrary and contrary to the allegis transparency that the republicans talked about during the election. we will see.

certainly, that rules package is not a good indication that there will be a lot of input on the budget, especially when it comes to spending caps and spendingcaps. host: another budget item. the pentagon and wars in iraq and afghanistan. one of our viewers says the health-care debate has been a great distraction for what he calls "six wars of our country is currently engaged in." guest: i would agree with you. if we simply rehashed this health care debate and spent the first few months of this session talking about repeal -- i have said that the major priority is the economy and jobs. also, you are right when you talk about the wars and how we will continue to fight them and how we will continue to pay for them. that all becomes secondary as well. i agree that it is a mistake to focus so much attention on

repeal of health care reform. host: representative frank pallone. judith joins us on the line for independents. good morning. caller: thank you. i want to focus on two separate issues. one is the health care that you have been talking about. the first thing you said -- the job killing health care bill. i think this is a talking point. if you look at the way the health care bill is implemented over the four years, the health- care industry is currently 1/6 of the united states economy. d massivectually enad jobs because there are number -- large numbers of people currently unemployed.

as they get into the system and the children all get their proper immunizations, which is usually covered now, you have the older people who cannot afford health care because the social security and medicare plan only pays 4/5 of their bill -- it is insane. if you look at the single payer option, you actually save a great deal of money because you do not have 9 million different companies all competing with people who tend to be poorly educated on the subject and do not know what they are buying. a perfect example is a motorized wheelchair for many of the handicapped. if you purchase this through a medical supply store, the price is $6,000 a with a with1,500add on for an elevated seats.

you can buy the exact same share online for $3,000. host: we have just a couple of minutes. we will give the congressman a chance to respond. let me clarify. the language of calling a job killing health care act comes from the house rules committee. you can go to the house rules committee website. next wednesday, they will vote on what they call the "job killing health care law." that language is coming from the house gop and in particular the rules committee. your response? guest: i think you're right that the health care bill stimulate the economy and creates jobs. essentially, what is happening is that as more and more people are covered with health insurance and they're able to see a doctor and get primary care, there will be a need for more doctors, more nurses, and more health assistancts.

there's no question that it will create jobs. would a single payer system have squeeze more money out of the system? probably. again, i do not want to rehash the whole issue of whether we should have had a single payer or a public option. i think we passed what we could. it will create jobs. it will cover most americans. let's play it out, rather than move towards immediate repeal. host: ken is joining us from silver spring, md. on the line for democrats with representative frank pallone. caller: good morning. first thing i want to do is commend you. you have a caller from new jersey who called on the independent line. he uses the same terminology like gulag and things like that. i'm not going to repeat it.

i consider the republican party and the tea party the american taliban and al-qaeda. keep doing what you're doing inside the repeal. -- and fight the repeal. you have a firm grasp. one quick thing i want to say. the stimulus bill, you know, you had a lot of republicans against it. no one will say now that general motors was saved. when you look at all the republicans that have bmw -- it's no surprise why they did not mind the american manufacturers to go under. my call is to mail in support you and the democratic party, and also the people -- is to mainly supported you and the democratic party, and also the people. it's not going to go anywhere. thank you.

guest: thank you. i appreciate what you said. i think the one large point you've made is that it is easy to be the monday morning quarterback, but the bottom line is that we had a recession two years ago. with the recovery act and the tarp -- a lot of people do not like the fact that we saved the banks and gm. i think those things had to be done. it's easy to now say that you should not have done it or there was a better way to do it. the reality is that we accomplished those goals. i think the same thing will be true about health care reform. a lot of the patient protections have already kicked in. you will see that premiums will stabilize once this goes fully into effect in 2014. most americans will be covered. host: carl allen has this point of view. he is from new mexico. "how about giving republicans a

chance before you start beating the hell out of them?" guest: i am not suggesting that the house subcommittee that i chaired should not have hearings and look at what is happening to health care reform. that is the job of congress. to just say that we are going to repeal this and start over again, it's a waste of time. practically speaking, as we said earlier, the senate is not one to pass a repeal. the president has opposed a repeal. why are we doing that? why is that the cornerstone of the republican leadership's plan over the next few weeks? host: our last call is howard on the line for republicans. good morning. caller: good morning. it's nice to see you. if anyone wants to know what a professional left politician is, just open your eyes. there he is. i have a question about nancy

pelosi's statement. the idea of getting into the weeds about what is right and what is wrong with this medicare bill, or obamacare bill, it is difficult. it is one-sided. as we going to the congress, it will be quite interesting to have an opposite view sitting across the table now. i know there are restraints on time, but we have a lot of congressman walking around the halls at 7:00 a.m. i think we can have a group meeting. to get back to nancy pelosi's statement, when she said we have to pass it so we know what is in it. thank you. have a good day.

host: thank you for calling. you have a number of new members tomorrow morning on c-span's "washington journal." representative frank pallone, your thoughts? guest: i know there is this notion that somehow the speaker or members did not read the bill. let me assure you nancy pelosi knows everything that's in that health care bill. she went through it line by line before the democratic caucus. we spent a lot of time and we know what is in the bill. that is why we support the bill. we think it will go far toward stabilizing premiums and covering all americans. let me just make this final plea on health care reform. everythingust repeal that was done over the last two years. let's work on a bipartisan basis to try to address the country's problems, create jobs, and

improve the economy. thank you. host: we began the conversation this morning talking about the situation in states. across the country, $140 million in potential budget debts. david has this comment. that is one argument we're going to hear in the new congress. guest: one of the best manifestations of this is the tea party constitutional amendment that says that 2/3 of the state legislatures would be able to veto any federal law or any federal regulation. i think that we need a strong federal government. and, you know, the notion that it is somehow unconstitutional for the federal government to deal with education, transportation, or energy -- i

do not think the founding fathers had in mind. they expected a strong government. the only way we became a strong nation, in my view, is because we have a strong government. i do not want to take away from the powers of the state. one of the things that the federal government should do, and we try to do in the last congress, was to help out the states. we spend money -- we sent money back to the states so they should not -- so it would not have to lay off teachers and police. that was done under the democratic congress. i do not know if the republicans want to do that. we need to help the states as well. maybe we can come up with some bipartisan solutions. host: you have been in the majority. you will now be back in the minority. for you personally, what is the biggest change? guest: the biggest change is that i will not be chair of the health subcommittee anymore. when we were in the majority, and if i can use my health

subcommittee that i chaired as an example, we were quite a bit with the republicans. i would say 80% or 90% of the stuff we passed was on a bipartisan basis. tse new chairman, joe pit from pennsylvania, i look forward to working with him. host: representative frank pallone from new jersey, thank you for your time. guest: thank you. host: coming up, we will turn kistan.ention to acpai this headline from "the wall street journal." later, the price of your role in the value of your home and its impact on the u.s. economy. it's all ahead from "washington journal." first, a news update. >> on this day before the opening of the 112th congress,

politco reports that chief justice john roberts will administer the oath of office to john boehner's staff. the event will take place in a private, low-key ceremony. the president returns from his hawaiian vacation today and will privately cite a bill that overhauls the food safety system. it gives the federal government powers over inspections at food processing facilities. later today, and the president meets with defense secretary robert gates. reuters reports that secretary gates is ready to unveil roughly $100 billion in cuts to the defense department's budget. that announcement is expected thursday. will the tell a plan that military services have been working on for months. in update on foreclosures from bloomberg news service. the five largest mortgage loan servicers, including bank of america and j.p. morgan chase, may be the first to settle with 50 state attorneys general who are investigating foreclosure

practices. those are some of the latest headlines on c-span radio. >> every weekend on c-span 3, experience american history tv, starting saturday at 8:00 a.m. eastern. visit museums, historical sites, and college campuses, as top history professors and leading historians build and to america's past. american history tv on c-span 3. >> the 112th congress gavels in wednesday with the swearing in of new members and a vote on new rules. watch live starting at 7:00 a.m. eastern on "washington journal."

interviews, reports, and your calls. >> "washington journal" continues. host: juan zarate, good morning. guest: good morning. host: we're when to begin with the situation in pakistan. a deadline was in place that could result in the collapse of the pakistani government. and the country is facing inflation rates at 15%. what does all of this mean? there is political instability in pakistan. the current government -- now you have the opposition party starting to assemble against the government. much of this has to do with internal issues related to the economy. subsidies, price hikes, those types of things that matter

quite a bit too pakistani population, and less about the war in afghanistan and less about the issues in the tribal areas that tend to dominate our media attention. pakistan always has political instability. right now, we are facing quite a bit of it. one of the concerns we have in the united states, what will this do to our ability to prosecute the war in afghanistan, and what will this do to overall security in south asia? host: one of the photographs in "the washington post" -- a look at the slums in islamabad. guest: we tend to be myopic. we have to remember that the pakistani economy has been in trouble for the last couple of years. issues of poverty, economic subsistence, becomes the central in the politics of pakistan.

that said, i do not think we should overreact. it is not unusual for them to have these types of tussles. we should not overreact. this is certainly a period of instability. host: let me ask you about iraq. i want to set way back to the afghanistan. as troop levels come down in iraq and the president says that basically u.s. troops are out of iraq in 2011 -- they are not welcome beyond that. what impact does that have on our relationships with iraq and our role in that region? guest: the question of the u.s. presence in iraq has always been dictated by conditions on the ground, but also by the political necessities in baghdad. we have a status of forces agreement signed by president bush and prime minister maliki,

and that has survived. president obama has adhered to that time line. prime minister maliki is dealing with the realities on the ground. it's not politically popular to talk about having american troops on the ground longer than 2011. some of what we're hearing has to do with internal political dynamics. a new government is warning and they're having to set the tone for what is happening internally in iraq. for the united states, one issue of concern is whether or not we will see the kind of relationship and stability in iraq that we would like to see that our troops on the ground represent. our troops have been multipliers for the iraqis. they have helped train and undercut the ability of al-qaeda in iraq to be a destabilizing force. our ability to help the iraqis and also to serve as a stabilizing factor becomes an

important question. we will just have to see how this plays out. the dynamics on the ground may change. that may change the political rhetoric from baghdad. host: while that is happening, u.s. troop levels increasing in afghanistan and stayed at that level for at least the next year or two. review is coming up this summer. what impact does the situation in pakistan have on the troops in afghanistan? guest: it's a great question. that's a critical question to the administration. they came out with their strategic review in december. that said that there has been progress but it has been fragile, and could be unstable. they talked about pakistan being the central element of the strategy, in part because the militants find safe havens in western pakistan. the ability of pakistan to deal

with those safe havens in the ability of nato troops to deal with the momentum of the taliban has much to do with the stability and the ability of the pakistanis to deal with the militants in the west. host: this is a headline from "the new york post" from the attorney general. guest: i think there's a great concern in the counter-terrorism community. attorney general holder represents that in many ways. what concerns counter-terrorism officials most is the volume of cases in the uptick, as well as the variety of cases. and also american citizens who have fallen prey to the ideology, who have been radicalized, who may find their way to training camps abroad, or may be self radicalized and

self motivated, who are willing to kill americans. that has been a major concern for u.s. authorities. that's why the fbi has put a lot of pressure on these cases. the portland case, for example, that sting operation in the dc metro plot, and another case in maryland just last month. you have seen a lot of attention to individuals within the homeland. i think that is troubling. i would not yet call it a trend, but it is a troubling dynamic. host: have we moved from the uss cole and the two attacks on above world trade center to these individual smaller attacks by homegrown terrorists, funded maybe in part by al-qaeda or other operatives? guest: unfortunately, we are seeing a more complicated environment. we still have the threat from al-qaeda core.

that is largely in western pakistan. that's why we've seen plot's driven by them. the europe plot that the u.s. advice to travelers about last year is an example of that. you have al-qaeda affiliate's, like the group in yemen, tried to hit the homeland. the failed attack over detroit was a good example of that. and then you have these self starters, self radicalized individuals. a lot of cases i dimension fall into that category. they may not be directly connected to a terrorist group, but they clearly fallen prey to the ideology that they have to attack the u.s. in a taxable american power, and attacked u.s. citizens. the problem is not just coming from the outside-in, but maybe from the inside out. host: our guest is a former counter terrorism advisor.

you can also join our conversation on twitter. alex is joining us from ma ine. caller: good morning. a like to ask him about the role of the pakistani isi in supporting the taliban. it has been documented that the isi is in great part supporting the tribal colleagues in the border regions and in afghanistan itself. essentially, u.s. support in vast amounts of u.s. money are now moving into pakistan, where the isi is using them to support the taliban. how does he feel about that? guest: it's a great question. it is a question and issue that

has bedeviled u.s. policy makers. there's a sense that the isi being incredibly important in capturing high level al-qaeda figures, for example, in the settled parts of pakistan. there's also a sense that the historical ties between the isi and the afghan television, as well as networks, are not only historical but continued. and the isi is perhaps a blessing of the highest levels of the government or otherwise continues to deal with these groups as a way of hedging their bets on what happens in afghanistan next. viewers should recall that pakistan views afghanistan as a defense against india in some ways. the pakistani establishment in the intelligence services, in some ways, view afghanistan as part of the broader proxy battle

for influence in defense against india. that is part of the tableau. it's one of the issues the u.s. government has to deal with. if the u.s. government wants the pakistanis to move to places like the tribal areas, where we know there are al-qaeda training camps, -- i think the caller is right to point this out. it is one of the troubling problems in pakistan. it is something the u.s. government has to deal with it. the bush administration dealt with it and the obama administration is doing with it today. host: you served on the last four years of the bush administration. bin laden has been talked about for the last 15 years. it's been almost 10 years since september 11, 2011. why is he so difficult to capture? is he still relevant? guest: i would say is one of my great regrets that we were not able to capture bin laden.

it was one of my goals before we left office. bin laden is still relevant. not only is he a symbolic centerpiece for this global jihadi movement, but he is still relevant strategically. he still driving many of the moving parts of al-qaeda, not just in pakistan, but globally. in many ways, bin laden is still a central figure, i think. the reason you want to capture him is not just for symbolic reasons or to bring him to justice for 9/11 and all the other atrocities he has committed around the world, but if you are able to take him as a picture -- in some ways, you start to crumble this global network. it still relies on a hierarchy. it still relies on the theological, moral direction of these leaders. without them, there's a lot of tension and fractured movement and ideas within the jihadi

movement. strategically, it's still very important that we find bin laden. as i often say, they are not ghosts. their flesh and blood. the problem is that fear in some of the most treacherous terrain in the world. it is a part a world that we're literally not in. host: eric is joining us from dayton, ohio. good morning. caller: i just have a comment about the war in afghanistan. i think it would run a lot more smoothly if groups like blackwater and halliburton were not involved in it. with them involved, it becomes a profit motive, like, as long as they are involved, we have no

reason to exit. the government is giving money to these groups to set up a permanent occupation there. host: juan zarate, your response? guest: there's been a growing debate about the role of private security companies. i read something about this that was written in 1998 that talked- about the growing use of these committees by legitimate governments and the likelihood that they would be relied on more and more. it's a huge debate. president karzai called for the permanent exit of any of these private security companies. in part, this was because the state department aide organization, the people delivering humanitarian assistance on the ground, rely on these private security companies. unfortunately, it's a reality. in these wars jones, the u.s. government, then on governmental organizations will need to rely on private security, in part because the military is not able to provide those services.

it is not able, given its other missions, to do that. there is a role for these companies, but i think we have to be cautious. we have to be cautious about overreliance on these companies. there has to be restrictions on what they can do. i am that article in 1988 -- 1998, i talked about a licensing regime to make sure they get here to particular standards. i've seen the industry move toward a similar licensing regime. i think the caller raises an important question. the reality is that these private security companies are here to stay because of the need to secure movement and goods and services on the ground in war zones. host: another question has been the flow of information, especially when the president is out of washington, d.c. he is returning today from hawaii. the story in "the new york times" last month -- "obama's traveling team stays focused on

terror." what changed from last year to this year? how does the president outside of the white house get the information he needs on a timely basis? guest: as i often say, the present is never fully on vacation. travels with a communications package that allows him to reach anyone in the u.s. government quickly. he is also constantly briefed. even if the president is out golfing, he is briefed. he is paying attention to events. clearly, the administration wanted to demonstrate that this christmas, versus last christmas, they were on top of a potential threat. the president was ready to respond if necessary. john brennan, a friend of mine, was in washington monitory yvetteing events. nick resin was in hawaii with

president obama. what the administration did this time, as opposed to last year, was to assume the worst. understandably may not know everything. let's assume the worst, terrorists are coming at us from los blagojevich 0.3 let's make sure we are ready to -- ready to respond at any moment. host: last year, the president had to rely on operators to connect him with certain individuals, including john brennan. that changed this year. even within the mechanics, the situation rule is now in place outside of washington, d.c. guest: usually when the president has a compound, there are facilities to communicate properly. they learned that they did not have what they needed in hawaii last year. a have -- they have it this year. host: our guest is juan zarate.

next is a bill from minneapolis. good morning. caller: good morning. guest: good morning, bill. caller: how can the united states still consider pakistan an ally in this war? i think they just want our money. you know, if they were a full ally, they would either have boots on the ground in western allowed our boats on the ground. they're trying to have it both ways. that cannot happen. host: thank you. guest: it is an important question. if you talk to pakistani officials, they remind me often that they have had 3000 troops killed in engagements with extremists.

they have hundreds of civilians killed by a tax in pakistan, -- by a tax in pakistan. they have helped to capture or kill numerous al-qaeda figures. the problem is, there's a balance that pakistan has undertaken. especially with assumptions that the u.s. will not be there for a long-term -- for the long term. and the concerns about overextending themselves in the tribal area where they had an uneasy peace for decades. they do not want to stir a hornet's nest if they do not need to for domestic reasons. this is a tough battle and tension within the pakistanis.

the caller is right. there is an uneasiness with what pakistan does with the money we send, as well as whether or not they're fully committee. is this something that no doubt each administration has had to deal with. host: in egypt on new year's day, this photo from "the telegraph" in great britain. guest: this is an incredibly event.ant inven this is a serious attack, not only within egypt, but signals a broadening, perhaps, of the sectarian tension within the region and certainly an attempt by al-qaeda elements to foment the kinds of sectarian tension we've seen in other parts of the world. we have not seen a lot of this in egypt. there has been some within the christian and muslim population in the past, but this is a

severe case. this has really served as a flash point. it has not only highlighted problems within egypt, but highlighted the potential tension between the minority and the muslim majority. and how the government response here will be very important. can they protect the minority? can they enter there's not great attention that results from this. we saw this more dramatic and in a volatile way in iraq in 2005 and 2006. al-qaeda really took advantage of the sectarian tension and tried to inflame the war. we know from experience that al- qaeda members try to take advantage of these various types of fisher's preleasing and in nigeria and egypt and elsewhere. the key is for them to try to rally against these terrorists. host: our guest is also a

transitional threat adviser. sharon is joining us from hudson, fla. on the line for democrats. good morning. caller: good morning. thank you very much for taking my question. through the executive orders of president obama, who had several people be able to move from the gaza strip to america that we have possibly encouraged home grown terrorism? represented king holding hearings on homegrown terrorism and the problems the democrats have had in regards to allowing those hearings to be conducted. thank

guest: i would encourage representative kingara to look closely at what has happened -- rep -- rep keen to look closely at what has happened with homegrown terrorism. there are ways that you can be aware of the issue. and not aware of that coming from the people from the gaza strip. i think it has been the bush administration in tension and the obama administration's intention to strangle that in the gulf. certainly, the flotilla incident was an issue, but it remains the u.s. policy.

i do not see anything coming out of this administration that changes that too much. host: what is pakistan's nuclear capability and are those safe? guest: pakistan is a nuclear capable country. of course, the main concern has traditionally been potential nuclear war in south asia between pakistan and india. we have seen both countries come to the brink of war on two occasions in recent history based on terrorist incidents, the latest incident been in mumbai. there's always a concern as to what happens in southeast asia with the nuclear material. in recent years with the bush administration when i was with the n.f.c., we worried quite a bit about the ability of turf terrace, al qaeda and other types, to get a hold of -- the ability of terrorists, al qaeda

and other types, to get a hold of nuclear material. if we said this publicly right after 9/11, that al qaeda was meeting with nuclear scientists before 9/11. we know they were in talks. and it has always been a concern that you would to proliferation to terrorists through the pakistan system. -- that you would see proliferation to terrorists through the pakistan system. the government there does not want to see that happen either. there is a bipartisan report at the end of the bush administration called "world at risk" looking at nuclear terrorism and biological terrorism that we put the spotlight on pakistan. the greatest concern for nuclear terrorism perfect -- proliferation came from that. host: you can read some of it on our website c-span.org.

our guest is also a contributor to cbs news. ralph is joining us. good morning. caller: this homeland security is becoming quite a comic -- cottage industry. everybody is making bets on it. there has been able to page article written about it that is unprecedented since world war ii. we seem to be running out of enemies and we are creating enemies. then we have the government of here and they bring in these morons who have no idea what a bomb is made of or how it is going to be made and they are going to place a bomb in some location where they have never even heard of because they are being guided by the government and the fbi is holding their hands. guest: it is a serious question. there have been a series of articles posted about this issue.

the articles of a fragmented -- tended to conflate our intelligence capabilities at large to deal with not just terrorism, but korea, china, iran. and anna and of the caller is right, we have to look carefully at the budget and -- but the caller is right. we have to look at the budget and make sure that we are not overreacting to potential threats. the one of the concerns i have had in the last couple of years is that we, as a society, not trash about and respond to the latest threat and overreact. the terrorist take fuller advantage of that. they have seen how we have responded to two failed attacks, the shahzad failed attack in times square and the failed attack over detroit. those were failures. it was in our reaction, though, that i think we gave solace to the enemy.

and we gave the series -- the terrorists a sense that they can move to a strategy of disruption verses destruction, the ultra the u.s. government and its society into a tizzy -- that will throw the u.s. government and its society into a tizzy. we're going to do something called operation hemorrhage is what they call it. it is like throwing spaghetti to the wall to see what sticks and force you to react. and we should be cautious about overreacting. we should not overreact and give the enemy a strategic victory. host: homeland security secretary tom ridge, and you worked with in part, and also janet nepalitano have said repeatedly that the u.s. government needs to be right 100% of the time. natarus only need to be right 1% of the time -- terrorists only need to be right 1% of the time.

has that resulted in over reached? guest: we have made the an blevins strategy the inability of terrorists to operate in the homeland -- we have made an emblematic strategy the inability of terrorists to operate in the homeland. in some ways, we have created an expectation for ourselves of zero tolerance when the reality is that terrorists may get through once in awhile. we have got to be resilience in that respect. we want to prevent any recall -- we want to prevent any attacks, but there are things we can do. we saw this debate with the pat downs and the scanners at the airports. we have to have that debate, but we also must realize that terrorists may be successful once in awhile and we cannot overreact if that happens. and we have to be measured in our response and solid in how we react. host: next call joining us from

texas. caller: i am a retired military veteran with 22 years of service and three wars under my gut. as far as immigration is concerned, it is long past due. here in texas i see them coming from many parts of the world and they have no love for this country. they only come here because they have opportunity to make money or spread their own hatred of the united states. it is not a joke, a gentleman. before anyone should even be allowed to visit the united states they should go through a background check. it is time for this. it is time to stop a pre access to this country. and why are so many visitors vises overstayed no one can find them? guest: george, first of all, thanks to your service -- for your service to the u.s..

immigration is siong a debate when you consider people coming from abroad and the -- immigration is a debate when you comconsider people coming from abroad and radicalizing homegrown terrorists. you see that with the somali community in minneapolis were there are certain individuals who radicalized american somali youths and send them abroad to die in somalia. that is a major concern for law- enforcement officials. the caller is right, there has to be a debate about who we let in and what they are doing. at the same time, we have got to be careful because it is the open-door policy, the open-door nature of our society that contributes to our strength, not only our image abroad, but productivity iran the world true globalization. i am the product of a mexican father and a cuban -- productivity of around the world

of globalization. i am a product of a mexican father and a cuban mother. people who live here, who are american citizens need to subscribe to the ideals of an america that is inclusive and integrated. that is why the immigration debate has grown so important. president bush talks about aid in him -- in one of his books, he talks about not saying that immigration reform through. i think it is still something on the plate for this congress in the coming years. host: david makes this point on our twitter page -- still the case today based on your expertise? guest: i do not think that is necessarily the case. the challenge right now is actually finding bin laden. david is right, though, in the 1990's and in the run-up to 9/11 there was more information about

where bin laden was. there was also more information about where he was in the battle of torah bora. we thought he was holed up in the mountains, which he was, and we failed to get him. i was a failure on our part. certainly, in the decade running of to 9/11 we had opportunities to get bin laden, leader in sudan, on his way to afghanistan, in afghanistan. i think there was a reticence in those days to do anything that would appear to be to expansive, appear to be to war making, put our troops at risk. we knew he had troops in john karr. and but we did not put troops on the ground or invade -- had troops in kandahar. but we did not put troops on the ground or invade. certainly, we know in the pre let -- pre-9/11 days at the cow

to this was made not to go after him as aggressively as we did after 9/11. host: we could see some changes in the next two or three days in pakistan. also, we are discussing the impact in afghanistan and iran the world. john is joining us. it could morning. -- are relatively world. john is joining us. good morning. caller: the government has been working on the geopolitical strategy for decades. all they seem to have done is taken us from one unnecessary war to the next from vietnam to present day, afghanistan, and all in between. could you please tell me if you think there should be a

thinking geopolitical strategy change coming out of these think tanks? isn't it about time? that is my question. guest: well, it is a fair question as to whether or not there is groupthink in washington. you have a number of think tanks i am associated with. csis is an incredibly fine institution. everything is led by one of the most respected leaders here in washington. but the caller raises a good point, that we need to reassess our policies and how we view the world. to often, and i think this goes to the caller's point, too often we view the world purely through the lens that we face, the -- through the threats that we face, the challenges that we face. one of the challenges of think tanks is helping government and policy makers and even folks in the private sector and citizens think about what are the opportunities, for example, in

the 21st century for america, that frankly, has been a leader of globalization, a leader on innovation -- you know, how can we take full of vantage of the things that the u.s. does well and we are great at? too often, what you see in a national security environment is a myopic view of what the perceived threat tart and a definition of our strategy a round bout. we need to define our strategy is much more so around the opportunities we have to shape the environment around the world and then that also promotes our national security interests. i would not agree with everything the caller said, but it does raise a good point about how we tend to be myopic about national security. host: let me bring this back to afghanistan and where we -- pakistan and where we started this conversation.

they have been given three days for a verdict to avert a potential collapse in pakistan. and here is a tweet. guest: it is a good question. i think more broadly, the concern in pakistan is on the security of the country, security with respect of not only afghanistan, but southeast asia. its economic viability and political elements are being driven by bad economics, on the ground issues for people in pakistan. we have to watch carefully how this works out. a vote of no-confidence with a very weakened as are very-led government -- with a very weekend zadari-led government could cause political turmoil in that country. you have got to wonder if at

some point if the politicians in islamabad are fiddling while rome is burning, in a sense. watch it veryto carefully. i would not despair, but we need to watch it carefully. host: juan zarate, who served the second bush administration on counter- terrorism. we're joined by a caller in riverdale, california. caller: i have a two-part question. the first part, could the gentleman explain to me why we are still in afghanistan and iraq and other parts of the middle east considering that this country is currently undergoing a disaster with our money problems and these wars are causing -- costing us billions of dollars.

the second part, the role of so- called contractors who are nothing but mercenaries using these wars to rack in billions of dollars of taxpayer money running around playing at war. how will we clean up this mess? guest: great question with respect to not only the patience of the american people and our overseas commitments, but also the cost of the war in afghanistan and our deployment -- deployment in iraq. those questions are in part why you see the obama administration robustly to move troops out of iraq and partly why this 2011 deadline that the iraqi leadership is talking about may not be a bad thing from a obama administration perspective. in part, to be able to save the resources that we have been deployed in iraq for many years

now. in iraq -- in afghanistan, one of the major debates this summer will be the pace of the drawdown. will we be a sustained presence through 2014, which is the nato deadline for a physical half -- handing over of afghanistan to the government and troops. and what does that look like? will it be a drawdown to the 30,000-troop level like we once had? all of that will be debated enron will certainly be part of the review the summer with the obama administration. unfortunately, we live in a world that necessitates the security. even in non-conflict zones, for example, the oil platforms in nigeria a better subject to attack, you have the will companies employing private security there. and elsewhere, to him -- to secure infrastructure. but we have to be cautious about

the overuse of them and we have to make sure that they are applying to certain standards so they are not acting as mercenaries and not acting outside of the boundaries of the law, either u.s. law or foreign law. host: and finally, in the years the u.s. buys george w. bush, he is now out with his new book, "decision points." what struck you the most in your conversations with him about counter-terrorism in this country? guest: i think what was foremost on his mind and that he conveyed to me and senior staff as that we are not gwenn to let another attack on our soil. -- not going to let another attack happened on our soil. we saw some shift in our strategy. we started to look at more of the ideological battles, the undercurrent with regard to al qaeda. we started to look at the

metastasizing movement. that worried the president most. specifically, he worried about avoiding nuclear material getting into the hands of a terrorist group that is willing to deploy it without any caution. i think that kept the president and the president kept us up late many a night. he was worried about terrorism attacks and nuclear terrorism. host: juan zarate thanks for a much for being with us. guest: thank you. host: what is the price of your home and good prices impact the economy? could there be a double-dip recession? that is next as "washington journal" continues, but first, in use of day. >> is 20 past the hour. senate majority leader harry reid and other senate democrats say house republicans should consider the consequences of trying to repeal the health care law, including the popular

middle-class consumer protections. the new congress convenes tomorrow and house republicans say that one week later they will vote on the repeal. senate democrats said that as as far as the repeal will get. congressman heath shuler plans to vote for himself rather than representative nancy calo c4 house speaker. -- rather than representative nancy pelosi for house speaker. defections from nancy pelosi to another democrat will only be symbolic as republicans have the votes to elect their designate, john vader, as speaker. -- john boehner, as speaker. automakers will report december and a year-end sales figures throughout the day today. at the head of the opening bell, at dow jones futures are up 40 points. -- 41 points.

>> i think news organizations have adopted. is it great that overall, news organizations are not doing as much for news as they are doing for domestic news? the public bear some responsibility, too. the public there's a responsibility for keeping themselves informed. >> the sunday, senior foreign affairs correspondent for abc news, martha raddatz at 8:00 p.m. on c-span's q&a. >> you are watching c-span, being your politics and public affairs. every morning it is "washington journal" our live call-in program connecting you with the news of the day. during the week, a watch the u.s. house and our coverage of the transition to the new congress. we die, policy forms and the supreme court oral arguments. on the weekends to conceal our signature programs.

you can also watch for programming in a tent -- any time at c-span.org. c-span, washington your way, a public service graded by america's cable companies. "washington journal" continues. host: our focus is the u.s. economy and david blitzer is joining us from new york, the managing director and chair of the standard and poor's index committee. thanks for the being with us. guest: it is good to be here. host: let me show you a headline from the "wall street journal" last month and you are saying in this article that things look like a double dip in housing pretty much on the way if not already here. what does that mean in terms of the price of our homes, the value of our homes, and what this means for the u.s. economy?

guest: if one looks at home prices, and as i thought the and everybody knows they went up for most of the decade that is just closing, from 2000 through about 2006. home prices went straight up. they peaked in june of 2006 and proceeded to go straight down. last spring in like we were beginning to have something of a rebound and a recovering and things were recruit -- were improving. however, the most recent data shows that the decline appears to be resuming. there is a great deal of concern among economists and analysts looking at homes, home building and construction. their prices may go down sharply from here on out. another 3% or 4% drop and we will be setting new lows. the definition of a double dip

in home prices is new lows. obviously, in terms of the numbers, we are very close to that. host: let's put some information on the table. first, home prices, in comparison between september and october -- based on that, david blitzer, what is the ripple effect in the u.s. economy? guest: the ripple effect is something that we have been suffering true for some time. in a typical recession, in fact, in just about a recession from the second world war up to the one we are trying to pull ourselves out of, home building was a key part of getting out of it.

a typical recession would last about a year, a little bit less, and about two-thirds of the way through, residential home construction prices, anything would hit a bottom and it will turn around. and indeed, it will lead the economy out. lower interest rates, people were attracted to buy homes. and you would have construction ramping up. the residential construction would power the economy out. it would go -- growth two or three times faster than anything else. this time it is not really happening. it is not really clear if anything connected to housing has hit bottom yet, as the " you read earlier suggests. -- as the statement he read earlier suggests. that is one of the problems with the economy that we have now, that we have not had that big boost of work from home housing -- from home building. -- the big boost from home

building. we have not gotten a kick. i think that is a big reason why we are still sitting with a very sluggish economy and an unemployment rate that is a whisper from 10% host: let me follow-up on that point because in a conversation with homebuilding executives in the washington d.c. area they are saying that the problem is not land. they can get mortgage rates because they are at a record low. the problem is the inventory, especially with foreclosures, that home builders cannot compete with foreclosures or other homes that people can move into because there are so many on the market. guest: i think there's a lot of truth in those comments. the supply of houses is probably double of what it ought to be. if you look at recent sales of existing homes compared to the number on the market, how many months would it take to run that

off? right now it is probably nine to 11 months. the normal is probably three to four months. if you look at new homes, it is not quite so severe, but the reason there is that we have been building new homes at the rate of about 550,000 per year. the normal rate ought to be slightly north of 1 million per year. foreclosures or delinquencies or people have not been making their mortgage payment so they are not technically the liquid, that number is hard to get a grip on -- technically delinquent, that number is hard to get a grip on. it is huge and it weighs upon the market. a lot of people think they should wait, by a foreclosed home and they will get it for 50 cents on the dollar or something like that. whether that is true or not, is a huge gamble on the market. there are one or two teams i would add, though. -- it is a huge damper on the

market. there are one or two things i would add, though. it seems that there is difficulty of anyone to get a loan. ironically, it is true in some of the cities that you read off that are at new lows. -- that are at new lows, they have built too many houses. there are some spots in california that have actually done better in this problem. host: let me show you two graphs. you indicated the run-up of the price of homes from 2000 through 2006 and then dropping to half in 2007 and 2008. and on top of that it peaked out at 5 million delinquent loans in 2010. guest: the other thing to add about foreclosures, which anyone who has seen the newspapers in the past six months is familiar

with, foreclosures are very complicated. it probably was never intended to deal with the numbers about we have right now. and it has been fraught with a lot of difficulties and allegations of things being done, which clearly should not be done. that whole tangle is slowing down working through the supply and getting those houses back in circulation and resolving everything. it echoes the big problem that a lot of people, a lot of organizations lost a lot of money and i'm not sure that we have all warned of to that. host: could there be a double dip because of the housing market? that is our question. our guest is david blitzer. he has joined us from new york. you can also send us an e-mail or a tweet. dan is joining us from grand island, neb., our lytal

republicans. good morning. caller: how message of this has to do with, globalization of art -- how much of this has to do with globalization of our banking system? guest: the home price has not done much to do with globalization. the direct impact of home prices is the way people view their homes and the way that mortgages could be written until now, the combination of those two things. the idea that the value of the home could never go down, which until 2014 when turkey as absolute. and on -- until 2004 everyone took as an absolute. there was no incentive for the lender to make sure that the borrower was going to pay back the loan until now. a number of european countries, especially spain and great britain, had housing booms and

busts of their own. host: kathleen says on our twitter account -- that sentiment was pretty prevalent in the mid part of this decade. guest: it was, but i think everybody wanted to believe, and they did believe. all of the indicators went to the direction that we should have woken up. the million dollars check and what it cost to buy a home, all of those figures were completely out of line. income levels were completely out of line, but people kept making mortgage loans. this kind of boom and bust is not unique to housing. mcvet the stock market over the last couple of decades. -- look at the stock market over

the last couple of decades. it is the same thing. housing has real break and mortar and is not just paper and electronic blips, but it can happen to housing, too. host: david blitzer is in charge of the committee that has overall authority over index of security. joining us from pennsylvania, eve, good morning. caller: if you traveled the united states 15 or 20 years ago there was a lot of farmland. now that has decreased so much and houses are in place of those farm lands. the housing market has been saturated with new homes and people cannot afford to buy them. the prices are so high. they are selling cheaper homes to buy more expensive homes.

but they cannot pay the mortgage for the heigl home. -- for the more expensive home. we are never going to get out of this recession. it we ought to find a way to maybe rent those houses or sell those houses a lot cheaper. that is the only way that i see. i do not know what you think about that. guest: as you suggest, and i think it is the housing executive of that we talked about a few minutes ago. there is a lot of supply on the market. there are a lot of houses available, and until the -- until we move that to a more reasonable level, it will be hard to get everything moving again. that is a concern. if one looks around the country, what one sees is areas where land was cheap and readily available, the southwest, las vegas and phoenix, for example, a south florida, including miami and tampa, those are areas where

we'll hold houses like crazy and we have unoccupied homes, half build homes. that is where there are very large problems. on not quite sure it is the same as the disappearance of forms. that is a much longer-term item that has been going on. though people do not always recognize it, it reflects in part the incredible productivity of american agriculture. we no longer need all of those farms, even though we are feeding two or three times more people that we were a quarter century ago. host: robert is on the line for david blitzer. caller: david, i cannot believe the way you can show up on tv and spot where you are spotting.

you read that cheap paper aaa that one around the world, selling those bonds or whatever you want to call them to unsuspecting people. because they respected organization as being capable of reading that paper aaa or jump. you rated everything aaa and it turned out to be jump. now we are in the debacle that we are in now. guest: as i will explain in a second, i cannot really comment on the caller's remarks. that does not mean i agree or disagree. standard and poor's has many differing units. the area that i worked in is the index area, s&p indices. we are probably best known for the s&p 500, among other things. while i know personally some of the people that work in the credit rating agency, i have no direct connection with them.

although i have been with s&p for 30 years, i have never worked in the ratings area of during those years. i do not have any detailed knowledge of the rating agency or how the decisions were made or what the analyses were. therefore, i cannot comment on the ratings for their impact or anything related to them. obviously, i have heard comments like yours before. because i do not have any detailed knowledge, i cannot express an opinion. but i do call -- thank you for calling in making those comments. host: let's bring it back to what americans are facing. and this is from the "wall street journal" in the november decision -- edition. christina and her husband took

out a second month -- second mortgage and then purchased a $70,000 camper, took a cruise to alaska and then separated from her husband and is now foreclosing on her home. how often is this being repeated around the country? guest: i guess this is unfortunately, certainly not unusual, although, it is certainly too -- is moving to one extreme in that the value went up and with the great power of high tide, these people -- hindsight, these people could have believed that the value was right and it was going to go up and then it collapsed. and has financial difficulties sometimes do, it probably aggravated other issues and concerns. this is obviously a very sad story and i feel very sorry for them.

in terms of how often this kind of thing happens, there have been some huge runups. the top of the list is miami, florida, where prices went up something like 180% between the beginning of the decade and december 2006. los angeles, 173%. washington, 150%, and so on down the list. , those have been followed by the stellar collapses as well. in florida, nevada, and arizona, those were the hardest hit places. prices went up 150% or so and came down something like 50% or more in a couple of places. huge collapses. it is not only home prices, though, because local economy at goes into it substantially.

realistic was a major economy. but secondly, if you look at the auto industry in detroit, michigan, it in detroit you can buy a home on roughly 70 cents on the dollar. this kind of thing has played out all around the country. there are places where home prices remain higher today than they were 10 years back, but even there, that increase is probably inflation plus the tiniest bit more. by and large, home prices are no higher than they were 10 years ago. that is a deferred experience than previous decades. host: headline -- that is a different experience than previous decade. host: the headline in the "wall street journal" is "housing cauverrecovery stalls."

next caller, go ahead. caller: my comment and then a razor sharp question for you, david. we had a statewide register that was based on the local market real-estate values. when the securitization process took over due to the commodity futures to modernization act -- modernization act, we started to switch over from real-estate values to the values that were created by wall street based on my loan value, not my real estate value. when i put 20% down, wall street started calculating its prices for derivatives based on the loan value. they stripped 20% of my equity the minute that happened for the past 10 years. when the sale is made on the courthouse steps, wall street, the day before the sale dictates

the price to be used at the courthouse the sale and that is priced based on toxic assets. that is not my home price value. what you use for your information? is that the loan performance or the real estate values? host: thank you. we will get a response. guest: the way these indices are designed and constructed, and i should give credit where credit is due. indices are designed by robert schuler, a professor at yale, and a professor at wellesley college. the data that use is actual wholesale transactions from various county and local tax offices, typically. what we do working with a firm called pfizer, we collect the

data from all of those local offices around the country, typically where they had real estate taxes and so on. we look at actual transactions only. but we look at real transaction data, not estimates, appraisals, or someone's economic model or anything like that. basing it on actual transactions, plus the technique that we use to put it together, which you call a repeat sales. this means our index does not get skewed -- get skewed by the changing of big houses with small ones. that is why we believe it is an accurate index more than anything else. host: one of our viewers right in. -- writes in. guest: i personally do not do economic forecasts. one of my colleagues has a

baseline forecast for gradual recovery, or continuing gradual recovery over the course of 2011 ended to 2012. he does have what he would call alternative forecast that would double dip. that would come late in the second quarter and into the third quarter of the new year and probably continue into early next year. i think one has to remember that as was once said, how far can an economist look into the future to forecast and he shrugged his shoulders and said six months ago. take this comment -- these comments and my comments with a grain of salt. we do not always know. host: there is a very lengthy

article on the bloomberg website. guest: i do not think i have read that article in decatur, but i have seen other articles similar -- in particular, but i have seen other article similar to that. i hope they are right and i am wrong because the outlook is a lot better. in looking at this recent pattern that we see in the last four -- 34 months, the numbers have been a bit worse than the month -- three or four months, the numbers have been a bit worse than the months before. a real sharp turnaround in home prices and housing starts and home sales and everything. we do need to see home sales, indeed, or we will continue in this direction for a little while. in housing starts, we built a

very few houses. in the northern half of the country is too cold to be able to build a lot of houses. on top of that, there are seasonal patterns in the way that people to shop for homeless. both new homes and existing homes. the families with children, which are large portion of home buyers, want to be in the house in time for children to start the school year, which roughly means they would like to be in the house and settled by labor day. and if you back that up, they are in the market may be in april, serving in may through july. that is a critical period. if things are looking good by june, i think there is reason to opt -- to be optimistic. if things are like they are now, unfortunately, the optimism will probably be in his place. host: our guest is david

blitzer. barbara is joining us from martha's vineyard in massachusetts. calling to start -- suggest a three part idea. i am 63 years, at -- 63 years old and i just sold a property that we had for 22 years. and i also have two children living in separate apartments. one is in the bethesda area in maryland and one in the boston area. i would suggest that we get the congress to set up a new kind of tax structure that would allow a couple of these kids to get together, say my son and a few of his fraternity brothers, with some family money to purchase and mop up this housing inventory that we have. so we can get the kids out of our houses and also get them

starter homes themselves. and then maybe have it be a kind of trust vehicle. i'm not clear about what a real estate investment trust is, but that might be one way to structure it. and then that way you can have a couple of families get together and go 50/54 1/3 each. -- bess 50/50 or one-third each. host: i will stop you there. there are a lot of issues on the table. we appreciate the call and suggestions and will give our consent -- against a chance to respond. guest: -- our guests a chance to respond. why congresst sure needs to get involved in this as much as we just need to and creative people out there to get it started. there are certainly reports are run the country of investors buying homes at a foreclosure

with the purpose of turning them around, could see them up and putting them back to work. there are a few reports, and when i recall, i believe, was in boston, of organizations that step in and help people hold onto their homes as they are foreclosed or buying their own homes back out of foreclosure. it is clearly a challenging effort, but in one or two cases it seems to be working reasonably well. i think we need is an awful lot of creativity and thinking. one thing that is very hard for people to do with the housing problem is look at it as an opportunity. but there are spots where one should really do that. there are houses out there that are being sold for far less than anybody expected them to go for a year to five years ago. and there are cases where it does opera -- offer an

opportunity to put together a program like that and buy homes. clearly, you have to do it with care. you get two or three unrelated people and buy a house together, they better understand they are -- what they are getting into. and the agreement should be written down. there are opportunities if people get together and get creative to take them. those are showing up. looking at the creativity going across the american economy, think this kind of thing will be a big part of slowly but surely working things out of difficulty. host: our guest tour -- our guest is the chair of the standard and poor's index committee. one of our viewers right iwrite-

how do you respond to that? guest: there are a lot of difficult questions about the people working on wall street, what happened to some of the people, what should have happened, who was responsible and who was not. it is, without a doubt, a critical question. -- a difficult question. looking back, there were a lot of things that were not as correct as they should have been. if we have new financial regulations enacted over the past year, some of them have not been fully fleshed out. if anything, it is a mistake to assume that we have the purposes, and we are done. there is always room for improvement and we will be moving forward. whether this bank or that they

got a free ride or got off easy -- whether this bank or that bank got a free ride or body of easy is difficult for me to say in general or even in a specific case. host: the general rate of foreclosures and delinquency on loans dating back to the mid- 1990s is a pretty straight line until 2006 and 2007 and you can see the of take in both foreclosures and delinquency rates in home mortgages. -- you can see the uptick in both foreclosures and the lead with the rates in home mortgages. mike is joining us. caller: for about six years we built 40% more houses than we could possibly sell. when you are talking about the housing market, you are not simply talking houses. you are talking lumber, concrete, steel, appliances, roofing shingles. in other words, the entire economy. the first thing someone does

when they buy a new home, they buy new furniture. then they go out and buy a new car. for six years, we had this wonderful false economy. we had bush television day box -- we had uchitelle vicente fox, if you get a pin #iowa give you my finances. -- if you will get a pin number, i will give you my finances. this was nothing more than a big scam and it will take decades to get us out of this. you have furniture companies going out of business, car dealers. i mean, these people should be prosecuted to the fullest extent of the law under the rico act. every one of them should be as broke as these poor people who did not have a home to live in for the holidays. host: mike, thanks for the

comments. david blitzer? guest: i'm not sure how to respond. i would definitely agree that this was a huge economic boom that was not limited to the housing sector, by any means. it and as mike mentioned, -- and as mike mentioned, it go into everything connected to construction, anything connected to going into a new home. that was part of the boom that started in about 2000 and extended until about 2006. whether that boom by itself was responsible for other shifts in industrial concentration, i think that is a little more complicated. but he is right, this was a massive bone and unfortunately, it was a massive bus the following right behind. host: i understand you are not an economist, but certainly, you

have been following the economy and its impact on the housing market. many have said that if we are in a recovery, it could be a jobless recovery. if you are in a home that is worth $100,000 or $200,000 less than what you pay for it and you are out of work, what is the debt cycle? guest: it does not look like, it is a jobless recovery by almost anyone's definition. the unemployment rate has become l.wn at al-nahd we have had other jobless recoveries. in 2001 we saw very slow and frustrating job gains. going back to 1991, coming out of the recession, the same thing was true. part of that is true because the u.s. economy has changed a lot.

three or four decades ago, manufacturing and employment was a big factor in the room -- in the economy. and when you would shut down and you have massive layoffs. manufacturing is now something like 12 kdot -- 12% of employment. u.f. fewer layoffs and fewer cutbacks because the service sector is less cyclical. that is part of white the whole structure has changed. this is, at this point, a jobless recovery and it will be slow in coming back. some of the jobs will never come back. people today find it very difficult to move for a new job or search for a new job because, one, they cannot sell their home and even if they could sell it, they cannot get anything

like what they feel is a reasonable amount of money out of it for the sale. that limits mobility. labor mobility has been one of the shining stars of the u.s. economy until recently. host: we are talking about home construction and mortgages according to the census bureau. mary is joining us from bethesda, maryland. good morning. caller: i was just surprised by how narrow the scope of this discussion is. it seems to me that i have heard developers to a large pot trots of land in desert and swamps -- took a large plots of land in the desert and swans and took jobs away from where anyone might be employed and how they cannot sell them. that is what it sounds like.

i wonder why we are not looking more at how and where we are developing. and you said we do not need forms, but we do need green -- green space and living here in the northeast where there is hardly in the left, it is important to maintain tracks of land -- hardly any left, it is important to maintain tracts of land. host: thanks, mary. but we will get a response. guest: first, i did not mean we cannot and farms. i was commenting on the fact that producing food has become far more productive and efficient over the last several decades, as a complement to american agriculture. undoubtedly, there are some cases where we are building mansions three hours away from anything that looks like civilization. i am sure a lot of difficulties like that went on. but i think you are right about

intelligent element and the need for green space. if one looks at the northeast, you know, boston, new york, washington and the areas in between, or one looks at california, a couple of things stand out. one, there is relatively less open land that you can't just build houses on -- that you can just build houses on. secondly, building permits are more controlled, regulations, bureaucracy, would ever turn you want to use. -- whatever term you want to use. and yet, the areas there look a little better. in fact, san diego, los angeles and san francisco are three areas that had huge bones, a big bust, but they have done as well or better than any other part of the country in the last several months in terms of coming out. months in terms of coming out.