it's something we just couldn't do without. it should take us all down because we're willing to repeal the idea that insurance policies must all have a federal mandate in them that your children may stay on there and shall stay on there until they're 26 years old. . i can name republicans elected to congress at age 25. i don't know what kind of pride they would have in their new-found adulthood to walk down the aisle like they did here a couple days ago to swear into the new 112th congress and up until the moment they take the oath of office they are still on mommy and daddy's health insurance. that's how bad this idea is that we would raise kids up and give them the keys to the car at age 16 and give them the right to vote and choose the next leader of the free world at age 18 and give them the right to dripping at age 21, and keep -- drink at

age 21, and keep them on their mom and dad's insurance until 26. why? i wanted my kids to grow up. i announced to them when they were 18 i am now legally off the hook, guys. we nurtured you -- as long as we can. we are still doing that. we don't have to anymore. i'm so proud of what they accomplished and promised to accomplish, but i wanted to my kids to grow up. that should be your goal when you are raising them. not to keep them children forever, keep them on our insurance until age 26. until what purpose? by the way, if insurance companies, if there is a market for this, isn't there going to be a policy out there you can buy, at your own choice, that will allow you to keep insurance on until your kids are 26? if there's a market for it keep them on there until it's eligible for medicare. it's all right if it's driven by the free market. it's not constitutional and it's

not all right if the federal government imposes such a thing. because it raises the cost of everybody's premium and it limits our choices and it taxes people that don't have any kids, people that are individual policies. there's three things in obamacare they are proud of and i'm not particularly proud of any of those three. if i'm willing to vote no on three -- the fourth one may come to me an i'll bring it up in a moment, mr. speaker, but here's another rub. obamacare wipes out more than half of the health savings accounts opportunity that's there. we established health savings accounts in part d in 2003. a young couple could start in with $5,150 in their health savings account. say they got married, fell in love, age 20, that's why i used age 20, i can do the math, they maxed out their health savings account at $5,150 the first

year. adjusted for cola. we go up that amount, as they went through their happy married bliss for the next 45 years until they qualified for medicare. i would like to see that expanded, but here's how this works. if you look historically back over the last 30 or 40 years, you'll see that that type of investment like an h.s.a. would accrue at about a 4% compounded interest rate. not over the last two or three but the last 30 or 40, that's a reasonable number to predict. so you're a couple that started with an h.s.a. with $5,150 and deposited the max in it every year and spent $2,000 a year for normal medical expenses would arrive at medicare eligibility age with about $950,000 in their health savings account. boy, what a glorious opportunity that is. the federal government's interested in that $950,000 because they want to tax it.

they want to tax it at ordinary income when it's taken out of the health savings account, not used for help along the way. i suggest this. why wouldn't we say to that couple, take the money that's in your health savings account, buy a medicare replacement policy, a paid up for life medicare replacement policy, it would be worth about $72,000 per person at this point. so $144,000 out of the $950,000, and you get, $806,000 left over. that's the change. i would say to americans who had that kind of responsibility and prudence, keep the change. take yourself off the medicare entitlement rolls when you are eligible by buying a paid up replacement policy, anew advertised policy, keep the change tax free, travel the world, do what you want to do. if we do that, we turn health savings accounts into life management accounts, mr. speaker. these kind of accounts that young people would savior the

day they could start the account in their -- savor the day they could start their account in the health savings account and nurture and protect it. and build up to the point where it's $100,000, they would be in there this this private market -- of insurance we must preserve and protect. go back and restore it by repealing obamacare. it would be in that marketplace saying, i want a $10,000 deductible policy. major medical policy. a higher co-payment policy. i need lower premiums. i have the prospect of good health. i exercise, watch my diet, watch my weight. i get regular checkups. i'm willing to, in fact it would be prudent to, have catastrophic policies with high deductibles and potentially a higher co-payment for people who have the funds in their health savings account so that they are protected by insurance for its proper form and insurance should not be for hang nails or the

little things. insurance should be for the things that we can't fund ourselves. that's why it's there. it's protection so you don't go broke when something catastrophic happens. we would have people not only managing their health, they would be managing their health insurance premiums. they would be advocating for lower premiums. they would be saving more money in their health savings account, managing their health for a lifetime while their health savings account transitions into a pension plan. this is a full lifetime management account. why can't we do that in the united states of america? these free people that we are. why can't we do that in the united states of america? well, obamacare goes in and cuts out more than half of the amount that they can contribute into their health savings account because obamacare is about, yes, a federal takeover of our health care and a health insurance industry eventually, but it's about also expanding the dependency class in america. it's about causing people that

give up on trying and taking care of themselves and just finally sighing and get in the herd with the rest of the sheep and go smith to the government-run health care plan. when they tell you you can't have a test, you have already been trained to accept the rule of the state. so either test you or don't. they give you treatment or don't. you can look up to canada and see the waiting list times for hip replacement and knee replacements. one of those, i believe it's a knee replacement, is 194 days that you wait. the hip replacement is 300-some days. or it's the other way around. we are dealing with a half year or more, almost a year on waiting time. remember a presentation given downstairs in hc-9 a year or so ago. a doctor from michigan, dr. jasma, has written a book on this, but he went across the border to work within the emergency room in a hospital in

canada. and he did a lot of orthopedic surgery and there was an he looked at it, diagnosed it, he needed surgery. he said i can schedule you for surgery in the morning. we should move on this quickly. well, the surgery couldn't be scheduled. he didn't know it at the time. he didn't meet the government regulations. they had to go through and get another bureaucrat to approve it and then once they had to wait to get it approved, then they had to wait to schedule the surgery, this young man, prime of health, had a job, couldn't do it with his leg torn up, it took six months to schedule this young man to go before the specialist to do the secondary diagnosis to approve the need for the surgery so that they could rationalize spending taxpayer dollars to fix his leg. so it's going to be free health care up there, but you don't get it unless the right doctor, the one appointed by the state,

approves the surgery. so from the day of the time his knee was torn up and they took him into the emergency room, they had to patch him up, put him on crutches, and he had to gimp around for six months with a torn up knee to go in and have them look at his knee, the government doctor look at his knee, and approve he needed surgery. then you would think that that surgery might happen the next day. like it would in america. but it didn't happen until another six months. mr. speaker, six months to wait for government approval for surgery that would have happened the next day in the united states of america with a doctor. another six months just to approve it. then another six months to get the schedule to work through to get the knee surgery. and how much rehab does it take to put somebody back in shape after their leg has atrow feed for a year a -- atrow feed -- atrophyed for a year. his productivity has been stopped and his development

professionally has been diminished substantially. this is the kind of thing that happens when government gets involved setting up formulas. it's what people on that side of the aisle want to do. that's why the roof caved in and there was a katja class economic electoral change that took place on november 2. the election was the american people said enough. enough to the ruling troika, the obama, pelosi, and reid troika. enough to the liberty stealing legislation that was coming out of this congress one after another after another with cap and trade and government takeover of businesses and the government take over of health care the health care industry including their massive regulation of the health insurance industry, the american people rejected obamacare. the american people came to this city by the tens of thousands to protest against obamacare. the american people for the first time i believe in the history of this country came to this capitol in such massive

numbers that they not only crowded out here on the west lawn by the tens of thousands, there were so many people they surrounded the capitol, they form a human chain to surround the capitol and say keep your hands off of our health care. and it wasn't just a stretched human chain where people were barely hanging on, they were six and eight deep all the way around the capitol building saying keep your hands off our health care. they were shoulder to shoulder and they were six and eight deep , a full doughnut. talk about the doughnut hole, the capitol of the united states of america was in the dough mutt hole of the freedom loving constitutional conservative people that came here to reject obamacare, to petition the government peacefully for redress of grievances. that's what happened. and still their hearts were hardened. still speaker pelosi marched through the throngs with her magnum gavel let them eat cake

moment and they still don't get the message. we swore in 87 new freshmen republicans there, nine freshmen democrats. the majority changes, every gavel changes hands in the entire capitol. amazing. it's amazing it's so hard for them to hear the message from the american people. do they still have the level of arrogance, is it still an intellectually elitism of liberalism, the leftists that think that they have apparently some kind of gift of intelligence that superseeds the common sense and wisdom of the american people? i reject that. the american people rejected that. and we have 87 new faces over here that i believe are god's gift to america, mr. speaker. i so look forward to the impact -- we have already seen the impact. we have seen the impact in the rules package vote. we have seen the impact in the rules vote here today. and we'll see the impact on the repeal of obamacare on wednesday after this rule that provides for -- i guess i don't think i

kept it with me, this rule that provides for, i believe it's seven hours of debate. seven hours. nancy pelosi would give us an hour split 30 minutes on each side, no amendments. seven hours of debate. a debate on the rule. full debate up in the rules committee. and we are going to start this process of repealing obamacare. it's begun with the rules votes here yesterday and the rules committee this morning, and here on the floor today. we have begun the long hard slog of the repeal of obamacare, mr. speaker. it is, i believe, a new precedent to see the american people rise up this instantaneously to reject a piece of legislation that was passed. i recall when it was passed here november 7 out of the house and went back to be worked through the -- let me say worked through the procedures.

i withdrew that shenanigan word and replaced it with procedures in the united states senate. unprecedented fashion they put that legislation together in the senate and on christmas eve morning they circumvented the filibuster and they pushed through on a reconciliation package they called it a piece of legislation that had to come through to marry up with the house legislation in order to, some say in the press, buy the votes, to get barely enough to pass obamacare here in the house. that legislation passed in the senate on -- it was actually their version of obamacare passed in the senate on christmas eve morning, around 9:00 is when they opened the vote. they had a chance procedurally, the republicans did, to delay that vote until 9:00 christmas eve. i argued vociferously they should use every procedural tool at their disposal to delay that

vote to the maximum amount and perhaps something would happen like what if a blizzard would have come along and shut this capitol down and they wouldn't have been able to put the votes together? that would have been a nice thing. look how close that came if you think back upon it. in any case when obamacare passed the senate, i asked them the question one of the senior senators over there who opposed obamacare and did so well, what do we do now? what's our next step. we had nine more hours we could have fought. we didn't -- what do we do next? . he says we pray and pray for a victory in the senate race in massachusetts. well, at that time a lot of people in america didn't know the name scott brown, and i thought that that was a pretty big reach to think we were going to put our stakes in saving america's liberty in a special election, u.s. senate race in massachusetts. massachusetts has a full -- at the time 100% congressional

delegation all democrats, the strongest democrat state in the nation that i know of. so i thought it was a bit of a presumptuous thing to think about -- asking the lord to intervene in massachusetts, which is the message that i got. but i took a look and he cited, that's our best chance. i ended up going to massachusetts and scott brown was elected what is known as the kennedy seat in the united states senate for massachusetts. he pledged to vote no and kill obamacare. that made it the veto proof republican minority in the senate. most people thought on that night that obamacare was dead. that was january 19 last year. well, subsequent to that, the president held a health care summit at the blair house february 25. that's where he identified his health care plan as obamacare. and in that health care summit

there were certain selected republicans that were invited to sit with the democrats around this big table and there were rules. of course, the rules applied to people differently. the president interrupted republicans 72 times. somehow he got his mojo back. somehow they put together this legal maneuvering to be able to bring legislation here and say they got it. they got it passed. i am not taking that issue. the then chair of the rules committee wanted to just deem obamacare passed because they didn't want to take a vote on it. they couldn't get the votes out of their own conference because there were 12 anonymous individuals in a list called the stupak dozen that would not vote for a year that would use federal funding for abortion. so they sat with their coalition. the president of the united states promised to sign an executive order that they seem to think would amend legislation after it passed the house. and even that wasn't enough. they had to have the

reconciliation package out of the senate that would be married up with and effectively amend some of the obamacare legislation itself. so mr. speaker, the convolution of all of this, it was a legislative circus of every legislative shenanigan that i can think of to put this together in such a way that they finally got stuck to the president's desk, signed in see quention order so that the attorneys and the constitutional scholars could look at that and say, well, actually there is a piece of legislation that somebody's going to have to follow and the direction of. so we have a presidential executive order that was designed to amend legislation passed by the people's house and the united states senate that was promised before the legislation was presented to the floor as a condition of its passage here so they could get the votes from the stupak dozen and others. and there was a reconciliation

package from the senate that amended the legislation, they passed it out of the senate before the legislation was brought before the house. when do you ever bring legislation that is designed to amend legislation that's not yet passed? you only do that if you don't have the support of the majority of the people in either body. and i will tell you this, mr. speaker, on the day obamacare passed, as a standalone piece of legislation, that big 2,500-page package, if there are no extraneous issues like promises of executive order by the president or a package in the senate that amends it, if it's obamacare standalone, 2,500 pages, throughout here in the house of representatives for an up or down vote anybody that was here, any student that was here knows, mr. speaker, they did not have the majority of votes to pass obama care. it was done on the condition that the president would sign an executive order and the senate reconciliation package would be brought in the form

that they demanded it. so we watch all this process and we think, it's making sausage, you don't want to eat the sausage when you watch -- i'm happy to eat the sausage when they make it. i don't want to eat this one. the american people didn't want to eat this one either. the american people rejected it. the american people brought their voice and their effort, and i went home that night, last one to leave this capitol, and i told myself i will lay down and i'm going to sleep and get completely rested up and wake up fresh in the morning and i'll retool and i'll start a new plan and see what i can do to save america, see what i can do to save what's left of america because our liberty had been ripped out. our constitution had been violated, and i knew the bill was going to be signed eagerly by president obama which he did on march 30. i laid down and slept for about 2 1/2 hours and i was exhausted

and i woke up, i sat down at my computer and i wrote up a request for a bill to repeal obamacare. that bill went in at the opening of business that following morning. i was waiting for them to unlock the door, my staff was, and that request turned into a draft within a couple hours. got back into my hand 40 words, 40 words. and those 40 words are included in this repeal that is coming -- that is now before this house. it will be debated on wednesday of next week. i introduced those 40 words into the legislation and ironically, coincidently, michele bachmann of minnesota was doing the same thing at perhaps the same time and put in a bill draft request almost simultaneously.

and our bills came down within three minutes of each other exactly the same 40 words that said the same thing. pull obamacare out by its roots. that's not the quote, that's the summary, mr. speaker. actually i'm not going to summarize the bill this time. we don't have 2,500 pages in this repeal. i would just say a few more words about that. we started then the repeal process. within hours of the passage of obamacare and it being messaged to the president, within hours. and people said, well, that's just throwing a tantrum. you're just frustrated. you lost. why can't you just pack up your things and move on? we got to move on. put that behind us. that's -- that debate's over with. well, the debate's not over with when a congress defies the will of the american people. and this congress, the 111th congress, the one just passed, defied the will of the american people. and the result was 87 new

freshman republicans, courageous, bold, constitutional conservatives, young, vigorous with ideology, driven people, states men and women in the group that will emerge as national leaders, i believe there's a speaker in that class. i know there are committee chairs in that class. i believe there's a reasonable chance that there's a president of the united states in that class that was elected in 2010. there may be more than one. we have leaders there. they came to this congress to repeal obamacare and the filing of the repeal of obamacare in that late march day, that early morning of the late march day started a process. the start of that process began within hours of the passage of obamacare and well before its actually signed into law, introduced to the president before he signed it into law to repeal it and michele bachmann

and i and connie mack and parker griffith, those are the ones that come to mind that wanted repeal. there wasn't hesitation. the republicans wanted to sign onto the repeal. and over the period of time of number of signatures accumulated to about 86. and 86 are ready to sign for repeal. and we decided to have a discharge petition. nancy pelosi won't let this come forward until this does. i did that and i filed a discharge petition on the floor, mr. speaker, and members began to go down and sign the discharge petition. and the numbers, the signatures went up in the discharge petition when they said it was impossible to repeal obamacare all the way up to 173 and it became bipartisan with the signature of gene taylor whom i believe would have been re-elected to this congress had he not voted for nancy pelosi. he did lose his election, and he served well in this

congress. but the result of this is that the existence of the bill to repeal obamacare in the last congress was inspiring to new candidates that ran for office. it was inspiring to their supporters. it was inspiring to their constituents and their voters. and the discharge petition was -- with 173 signatures said republicans have the ref solve -- resolve to repeal obamacare. the republicans have the resolve. the inspiration and the resolve along with a fairly long list of anti-free market, anti- things that took place in the pelosi congress gave us the inertia to get us to the point where we are today. but the legislation i introduced then -- actually amended at the end of the last congress because it needed to include the reconciliation package that came from the senate after the bill was

passed. it wasn't possible for me to introduce legislation to repeal that because it hadn't passed. so packaged it up together and put that in as a squared away, on point, full 100% repeal of obamacare that i introduced, again, with michele bachmann on the last day of last congress and on the first day of this congress and that's the legislation, that's the language that is considered before this congress and will be voted on on wednesday of next week and will result in the house repealing obamacare, mr. speaker. and so a 2,500-page bill -- i wouldn't presume to come to the floor to read a 2,500-page bill, mr. speaker. i will do this. i think it's a delightful experience to read a bill that's short and to the point. and this is h.r. 2. h.r. 2, the repeal of obamacare

. and i'm just going to read this into the record, mr. speaker, aside from the titles, just down to the meat of the bill. and it won't take very long. it's actually altogether now 131 words, but it reads this way. effective as of the enactment of public law 111-148, such act is repealed and the provisions of law amended or repealed by such act are restored or revised as if such act had not been enacted. well, that's sounds pretty good, doesn't it? now, it's the first part. it repeals effective as the enactment of the law, obamacare, such act is repealed and the provisions of law amended or repealed by such act are restored or revised as if such act had not been enacted. it doesn't take a lot of complicated language to say, pull it all out by the roots as if it had never been there. that's what we get with the

repeal that's before us now that will be debated and voted on wednesday of next week. this is the language i introduced long back when people said it's just a frustrating, political exercise. you will never repeal obamacare. you can't get a vote on obamacare so why are you going through the motions? it's just a legislative tantrum. no, it's not. it's tangible. it's not a tantrum. it's here before us now. here's a second component. this is a reconciliation package. it says this -- effective as of the enactment of the health care and education reconciliation act of 2010, the senate reconciliation act, public law 111-152, title 1 and subtitle b of such act are repealed, and the provisions of law amended or repealed by such title or subtitle, respectively, are restored or

revised as if such title and subtitle had not been enacted. once again, the repetition of that language for the two major components of obamacare now, the act, they are repealed and the provisions of law amended or restored by such title or subtitle respectively are restored or revised as if such title or subtitle had not been enacted. boy, isn't that refreshing, mr. speaker, that we have a piece of legislation here that's not 2,500 pages, it's not so long and complicated that we can't read it here on the floor, it's not so complicated that anybody that might be sitting in the gallery or watching on c-span or might be reading through the congressional record can understand what's going on here? this is in the full light of day with the support of the american people, 60% of the american people, according to a rasmussen poll sometime back, support the repeal of

obamacare, as do i. and, mr. speaker, i look forward to the debate on wednesday. i look forward to the vote going up on the board on wednesday. i look forward to the beginning , but as the beginning of the repeal of obamacare and the press asked me a question on that earlier today. if you pass repeal of obamacare -- we will pass the repeal of obamacare -- was that the end? no. reflect back on winston churchill, it's not the end. it's not even the beginning of the end of obamacare, but it is perhaps the end of the beginning of the end of obamacare. . that's what i believe is coming. i heard the gentleman from texas bring up churchill when he said blood, sweat, and tears. there are some people out there that bring quotes to mind that stand out for me. one is the congressman from indiana, mike pence, his statement on our persistence and due diligence in bringing about

the repeal of obamacare is this. i wrote it down because it did impress me, not the words but the manner in which he said it. they are always superior to my delivery. it is this, mr. speaker, congressman pens of indiana said, if house republicans got the message from the american people, last november, we won't just vote once to repeal obamacare, we'll vote to repeal obamacare again, again -- again and again until we can sign their government takeover of health care to the ash heap of history where it belongs. close quote. nice quote, mike pence, it sounds like ronald reagan to me. consign, we will vote again and again until we consign their government takeover of health care to the ash heap of history where it belongs. i intend to stay with this with an even heightened level of persistence, mr. speaker, it bring about the final and complete repeal of obamacare.

mr. speaker, to be able to one day watch as the president of the united states, the next president probably, puts an end to obamacare, we'll take persistence on our part, determination, we'll pass this out of the house. we can pass it again and again. send it over to the senate where harry reid gets a hot potato on his lap that gets hotter and bigger each time. we have appropriation bills coming through here. a c.r. that ends march 4. everything that funds our government we should put into that language that prohibits any of the dollars from being used to implement or enforce obamacare. we can shut off all the implementation of obamacare this house, if this house stands resolute and determined, there is not a dime that can be spent by the federal government without our approval. we can shut off the funding that implements or enforces obamacare, and we must, we must stick with it.

we must stick with it with the determination that comes from people like mike pence with the tone comes from ronald reagan that comes from his mouth. i think the determination that comes from winston churchill. we will fight on this. we will fight to the end. we shall not fail. we shall go on to the end. we shall fight with growing confidence and growing strength whatever the cost may be. we shall never surrender. we'll carry on this struggle until in god's good time with all his power and might he steps forward to rescue and liberation of our god-given american liberty. that's what will happen in this congress the day will come, mr. speaker, that the next president of the united states, i pray, stands at the -- on the west port could he of the capitol here in this build -- porty co-, here in this building, when the

chief justice steps forwards and takes his oath on the bible, i want to see the next president of the united states take that oath with pen in hand, mr. speaker, and i want him to take the oath, preserve, protect, defend the constitution of the united states, so help me god, and before he even shakes the hand of the chief justice to be congratulated as the next president of the united states, i want that pen in that hand to come down on the podium and sign into law the final repeal of obamacare as the first act of office of the next president of the united states. and i'll support the man or woman that's willing to do that. mr. speaker, i appreciate your attention. honor to address you. i yield back the balance of my time. the speaker pro tempore: the gentleman yields back. pursuant to clause 12-a of rule 1, the house will stand in recess subject to the call of

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>> president obama today introduced four new members of his economic team and noted that the economy has created jobs for the 12th month straight for the first time since 2006. new appointees included james sperling, the former adviser to president bill clinton will move from the treasury department to become director of the economic council. this event took a few of us to place a few hours after the jobs numbers are released. it showed a decline from 9.8% to 9.4%. [applause] >> have a seat. it is wonderful to be with all of you today. i want to make a couple of quick

acknowledgements. ben cardin is here. prince george's county -- i want to think rick weeks, ceo and owner of thompson creek manufacturing, and all the employees here at thompson. thank you so much for your hospitality and the great work that you are doing. [applause] i want to acknowledge the family and guests of those who are standing behind me today. it is wonderful to be here at thompson creek, and i want to think rick for showing me how you manufacture more efficient

windows at this factory. this is, as he explained to become a family business. rick was 13 when his father, fred, opened the company. back then, his family lived above the sword, and rick started out sweeping the floor. three decades later, thompson creek has expanded, already outgrown this new 80,000-square- foot facility that in moved into three years ago. i will bet sometimes wreck still feels like he is working at the plant. i bet sometimes that rick still feels like his work at the plant. that is what happens when you are in charge. it speaks not only to him, it also speaks to all of the employees here today, the hard- working men and women who make this company work. it speaks to the promise of america.

the idea that if you have got a dream and you are willing to work hard, then you can succeed. that promise is at the heart of who we are as the people. it is at the heart of our economic might. it is what helps give an entrepreneur or the courage to start a business, or a company the confidence to expand. it is what leads to new products, new ideas, and technologies that have not only made us the world's largest economy but also the most innovative economy in the world. making it possible for businesses to succeed is how we ensure that the economy succeeds and all our people succeed. it is how we create jobs. that is what has guided my administration for the past two years. government cannot guarantee thompson creek or any business

will be successful. but government cannot down barriers to a lack of affordable credit, high cost for investment and hiring. we can do something about them. government can remove obstacles in your path. that is why we cut taxes for small businesses over the last two years. for example, when a tax break for hiring unemployed workers, pumps a creek was able to grow its workforce from 200 employees -- thompson creek was able to grow its workforce from 200 employees in just one year. we also passed a tax credit for products like energy-saving windows. that led to a 55% boost in the sales at this firm. rick was telling me that when that tax break out into place, the marketing arm of thompson

creek got busy. that is exactly what we intended. that is exactly what we wanted to see, is explaining to the american people you can save money on your energy bill. this is a smart thing to do. take advantage of it. incentives like these are helping companies across the americas -- across america, and the jobs numbers released this month reflect that growth. economy added more than 100,000 jobs last month, and the unemployment rate fell sharply. we know these numbers can bounce around from month to month, but the trend is clear. we saw 12 straight months of private sector job growth. that is the first time that has been true since 2006. the economy added 1.3 million jobs last year. each quarter was stronger than the previous quarter, which means the pace of hiring is

beginning to pick up. we are also seeing more it at optimistic economic forecasts for the year ahead, in part due to the package of tax cuts by signed last month, including a payroll tax cut for workers and a series of tax cuts to encourage investment and innovation and hiring. i fought for that package because even though our economy is recovering, we still have got a lot to do. this was a brutal recession that we went through, the worst in our lifetimes. it left a lot of destruction in its wake. more than 8 million jobs were lost. so even though we have created 1.3 million jobs, we saved a whole lot of jobs, you still have a whole bunch of folks out there looking, still struggling, a big hole they have to dig their cells out of. -- did themselves out of.

our mission depends on making our economy more competitive so we are fostering new jobs. it depends on keeping up the fight for every job, every business, every opportunity to spur growth. so, standing here with me today are men and women who will help america fulfill this mission. let me just introduce each of them. we are joined first of all by gene sperling, who high have appointed director of the national economic council. give him a big amount -- give him a big round of applause. [applause] he has been an extraordinary asset to me and the administration the past two years. he let our efforts to pass the small business jobs bill to help companies all across america.

he also helped negotiate the compromise that we negotiated this past year. he is a public servant who has devoted his life to making this economy work specifically for middle-class families. one of the reasons i have selected is he has done this before -- one of the reasons i have selected gene is he has done this before. during the clinton administration, he instituted the policy is that turned deficits to surplus. few people bring the level of intelligence, sheer work ethic that he brings to every assignment he has ever undertaken. and few do so with such decency and integrity. we are lucky to have you back at the nec. part of the reason i know he

will do a terrific job is because he is going to have jason furman working with him. i am pleased celebrate jason to the principal deputy at the national economic council. give jason a big round of applause. [applause] over the past two years i have a lot on jason's advice and expertise on a range of economic issues from helping design the emergency steps we took to prevent the economy from sinking into a second depression, to most recently working with gene and economics advisory to pass the tax cuts. we have also come to rely on as an adviser and friend since my first days as a presidential candidate. heather higginbotham has been the point person on education as we pursue some of the most

innovative and important reforms in decades. i am proud to nominate heather to now serve as deputy director of the office of management and budget, and shia understands the relationship between the legislature and the lives of the american people. i want to make sure i've got heather there so that we are meeting our fundamental obligations to our people and to our economy as well. so did have a big round of applause. thank you. [applause] finally, i am nominating katharine abraham to the council of economic advisers. [applause] catherine brings a wealth of experience as an economist, as a commissioner of the bureau of labor statistics during the clinton administration.

i am confident she will provide the kind of an unbiased on varnish device that will help us craft the best policies to strengthen this economy in the years to come. now, part of our mission, part of this team's mission in the months ahead will be to maximize the steps we have taken to spur the economy. one of the most important is allowing businesses to immediately deduct the entire cost of certain investments like new equipment that i was taking a look at. this was a policy i fought for over the past two years. we were able to pass it finally as part of the tax cut compromise. it is going to make a real difference for our economy. talking to wreck, i know thompson creek is planning to take full advantage of the tax break, and that will help thompson creek renovate, expand,

and add another 100 new employees right here. that is worth applauding. [applause] so you have got companies like this all over the country, and the treasury department estimates that overall this will accelerate $150 billion in tax cuts for 2 million businesses over the next two years. so i want to urge all businesses with capital needs to take advantage of this temporary expense provision because we expect it to lower the average cost of investment by more than 75% for companies like thompson creek. it is a powerful new incentive for businesses. it is a great opportunity for companies to grow and add jobs. now is the time to act. companies who are listening out there, if you are planning or thinking about making

investments some time in the future, make those investments now and you will save money. that will help us grow the economy. it will help you grow your business. overall, the decline in the unemployment rate is positive news, but it only underscores the importance of us not letting up on our efforts. i'm looking forward to working with heather and gene and kathryn and jason and everybody at the white house. we have one focus, and that is making sure that we are duplicating the success of places like thompson creek all across the country. we want businesses to grow. we want this economy to grow, and we want to people -- we want to put people back to work. we will not rest until we have fully recovered from this recession, and we have reached that brighter day. thank you very much, everybody.

[cheers and applause] all right. ["stars and stripes forever" plays]

>> president obama talking about jobs early today, naming gene sperling as his national economic council director. mr. sperling held that same post for the last four years of the clinton administration. he is currently serving as counselor to secretary timothy adviser. congress has wrapped up after passing the rules for debate allowing general debate next week of some seven hours on the rule proposed to help repeal the health care law, hr2. we next take you to the state house in boston where the governor was sworn in for his second term in office. >> thank you very much.

thank you. thank you, everyone. thank you very much. thank you. thank you. thank you very much. my friends, thank you very much. all right, gentlemen, i have a few points i want to make. thank you all so much. to the lieutenant governor, fellow constitutional officers, members of the governor's council and the a ministration,

madam president, thank you for the generous introduction in your partnership. in that same spirit, to mr. speaker and members of the legislature, mr. chief justice and members of the judiciary, to the many mayors and local officials who are here, reverend clergy, distinguished guests and friends, and first and above all, to the people of the commonwealth of massachusetts -- four years ago i challenge you to take a chance on your own aspirations on hopes for an economy based on innovation and opportunity, on hope for better schools and universal health care, on hopes for better politics. four years ago, hope was in short supply. young people and families were leaving our state, roads and bridges were crumbling. health care reform had past but had not yet been implemented.

stem cell research was restricted. are clean energy potential was undermined. our refusal to join the regional greenhouse gas initiative or to support tape wind. we had had too many years of leadership that were more interested in having the job and doing the job. together, we set out on a journey to change that. along the way, the global economy collapsed. thousands of people lost jobs, lost savings, lost homes. many, maybe some of you, lost confidence. people all over the commonwealth began to wonder whether the american dream itself was up for grabs. times like these are more than a test of policy. they are a test of character. so when the going got tough, we did not look for scapegoats or

run for cover, we did not lose our temper or our way. growing up in rough times and in rough circumstances taught me not to just curl up and wait for better times. no, what i learned is that optimism and effort, hope and hard just like families across the commonwealth, we took a fresh look at our plan, stiffen our resolve, and made choices. we chose to invest in education, health care, and in job creation because we all know that education -- educating our kids and being able to count on good health care and having a job is the past -- is the path to a better future. [applause] and that's why today

massachusetts leads the nation in student achievement and health care coverage rare our residents. that is why we are creating jobs faster than most other states, while our unemployment rate is well below the national average, why we are coming out of recession faster than the rest of the country, and why cnbc has moved our state up to fifth best place in america to do business today. that's why. [applause] that's why we won the national race to the top competition and why we will be home to america's first offshore wind farm. that is also why they corey system finally got text [applause] fixed [applause] and why veterans serving around

the world know that we will look after their families when they are away and help them when they come home. [applause] and that is why today for the first time in 20 years, young people and families are moving into the commonwealth faster than they are moving out. none of this is happening by accident. it is happening because of the choices we made, the investments you, the legislature, and the people of commonwealth had supported. this and more is happening because we did not just sit around and wait for better times. we are building a better future for all us by making better choices. not everyone supports every choice we make. some of those choices have made even some of our political allies uncomfortable.

this job and these times demand more than making each other comfortable. the times demand that we face the hard choices before us with candor and courage and that we act because doing so today will make us stronger tomorrow. we need to keep an eye on tomorrow. i read a newspaper article some while ago that compares the so- called greatest generation to my generation, the baby boom generation to the article described the greatest generation in a way you have all heard it described, the generation that fought and won the second world war and rebuild europe, the generation that came home and build great public institutions and the federal highway system and create the social safety net that we so worry about today, that launched the modern civil rights movement. the article that described my generation as the grasshopper

generation. because we have been feeding off of that all our lives. look around you. think about it. the university of massachusetts and mit, the mass pike, the park or rank in your neighborhood, the good school and a distinguished old building down the block, the world-class hospital, tanglewood, logan airport, the police and fire stations and the people who served in them -- none of it sprang fully formed from thin air. each is the result of our parents, grandparents, great grandparents, asking themselves what they must do in their time to leave things better for the generation to come and then sacrificing for it. they saw their stake and not just in themselves but in their neighbors, not just in their time, but in tomorrow.

they bore their generational responsibility. now, so must we. we must demand more of ourselves that rhetoric that divides us and leadership that cakes every top decision down the road. we must demand more not just of our public leaders, but of our private ones. and of ourselves as individual citizens. generational responsibility belongs to all of us, everyone of us owes a debt to the future payable only by making the kinds of choices today that build a better and stronger commonwealth for tomorrow. and so the work of the second term looms before us. that means jobs to create, schools to strengthen, health- care costs to reduce, and urban violence to end. [applause]

violence to end. working together, we have made progress on many of these fronts but this is no time to be satisfied. we cannot be satisfied until every single resident who seeks work can find it. that means that we must invest in education, in the innovation industries that are expanding opportunities all over the commonwealth, in the small businesses that are the backbone of our economy, and in the infrastructure that supports it all. we must reduce the cost of doing business here and make it easier for companies to hire people by removing unwarranted barriers be day outdated regulations, escalating health insurance premiums, or limits on

capitol access for small businesses. as more and more massachusetts companies compete nationally and internationally for sales, jobs, investors, and talent, we must answer their call by helping to promote the attractions of doing business and creating jobs right here in the commonwealth. and so and expect me to lead a trade missions in the united states and abroad, to lobby hard for our interest in washington and elsewhere, to beat your jobs advocate. [applause] we have the tools to compete. we have that talent, the tradition of innovation, the venture-capital, the ideas and so we will compete. for every job in every industry in every corner of the

commonwealth and of the world. we cannot be satisfied until a great school is within reach of every young person in the commonwealth. [applause] and that means we must find a way to invest in public schools from early education right up through public university because young people get their chance right now and don't have the option to sit out their education until the recession is over. [applause] it is critical that we use the tools that we have and a landmark achievement gap fact that the legislature passed and i signed only last year to support the imagination and creativity of great teachers, principals, parents groups, and

business partners to reach the poor children and children with special needs and children who speak english as a second language, the children on whose preparation and optimism our future economy and quality of life depends. we will close the achievement gap in massachusetts and continue to show leadership in public education for the nation. [applause] but being first in the nation is a good start. being first in the world is where we are headed. [applause] we cannot be satisfied until health care is as affordable as it is [applause] ] accessible. [applause]

that means creating incentives for all providers to work together to deliver better care at lower costs. it means improving transparency in the charges for services. it means reforming the medical malpractice system. it means getting excess of paper work out of the way of the relationship between doctor and patient. it means a new emphasis on wellness and prevention. and it means that we must change the way we pay for health care. we will file legislation in the coming weeks to address health care costs including significant payment reforms and simplification. this will be a challenge. there will be great debate and resistance to change. but working families, small and large businesses alike, and government, too, need a solution. they need it now.

some steps we can take immediately without waiting for new laws. mass held, the health care connector, and the group insurance commission will implement a pilot programs to demonstrate more cost-effective ways to buy health care. , to get different results, we need to stay -- start trying different things and we need to start now. we will work on these and other plans with our partners in the health-care industry and in washington as well as with patient advocates, everyone, insurers, hospitals, physicians, nurses, and other medical professionals, and especially patients need to be a part of this solution. let me be absolutely clear -- the time for talk is over. the time for action has arrived. [applause]

we cannot be satisfied until children stop killing other children. , until we have developed and implemented a comprehensive strategy for preventing the use of violence, one that ends of the despair felt by too many young people and the fear felt by everybody else. it is time to move beyond ideas and programs that may once have court but don't today. and stale alliances to individual budget line items. i don't have all the answers. that frustrates me to no end. i know that the answers are out there. he will engage the full spectrum of people who work with young people. educators and law enforcement, street workers and clergy, and human services providers and business leaders, victim

advocates and survivors, whoever is willing to support and love young person onto a positive future. the cycle of violence and poverty in any community is a threat to every community. it threatens our fundamental belief an opportunity for all. [applause] more jobs, stronger schools for all our children, affordable health care, safer neighborhoods -- that is the work of our second term. we cannot be satisfied and i will not be satisfied until we have done all we can in each of these areas. only in this way will we bear a responsibility to leave this place better than we found it

for our sake and for the sake of a generation yet to come. that is my commitment and the commitment of my administration to the people of the commonwealth of massachusetts. that also means continuing to improve the way our government serves our people. we have a pension system that needs further reform. cities and towns that need more tools to cut their costs, a reentry system in probation and parole that needs to regain the public's confidence, sentencing laws that need coherence, a tax code that needs simplicity and fairness. none of this is simple. all that is challenging. but we are fortunate, too, because we also have a legislature and leaders who have shown their willingness to take tough votes.

public employee unions willing to work with us in respect of partnership, appointees to understand that the public's interest comes first, and attentive and engaged electorate and a governor who has shown you that i will stand up to anybody if that's what it takes to bear our generational responsibility [applause] we have, even a week here, so much of what we need right now to do what's right. now is the time to fix what is broken. to meet these responsibilities, i challenge us all to turn to each other, not on each other. let us bring our passion not to

scoring political points, but to finding real solutions. let us bear our generational responsibility together because there are real needs in real people's lives at stake. nothing that we say or do here today will long be remembered. what will be remembered and what will last is the light we shine in our neighbors' lives and in our commonwealth and in some fundamental way, that is all about service and sacrifice, the service and sacrifice of the soldiers or police officers or firefighters who put themselves in harm's way abroad and at home for all the rest of us, the service and sacrifice of the teachers to come in early and stay well past the class date to help a child master her reading, the service and

sacrifice of the immigrants who worked three jobs to provide the signature american opportunity he once lay awake and dreaming about in a distant homeland, the service and sacrifice of our parents and grandparents, of our aunts and uncles and cousins and all the ladies in my old neighborhood and neighborhoods all across the commonwealth who chose through some gesture, great or small, to make a better way for each one of us. what is at stake today is the american dream. i am here to tell you it is worth fighting for. it is worth serving and sacrificing for. and i say that not just as your governor, but also as someone who has lived it. make no mistake, for that reason, i will give everything i have to move this agenda

forward. on saturday, for something we call project 351, we will gather eighth graders from every single city and town in the commonwealth for a day of service. they are remarkable young people who are already contributing in their own extraordinary way to making a better community. they are young people like a young lady from lawrence who serves as the companion to children with severe disabilities and serves at the local food pantry. kids like stephen of pembroke who is one of 11 children and lead a school drive to create holiday packages for our troops in afghanistan with his older brother who is currently stationed. the point of project 351 is to lift up their examples and encourage the substance and spirit of their work and the parents, teachers, and

communities that inspire them and then send them back to their communities as a beacon and as a challenge for the rest of us. service for them is not just about what they do, it is also about who they are. surely, if these eight craters can find a way to serve, a way to bear their generational responsibility, then the rest of us can also. in that same spirit of service and sacrifice, we embark on the journey of this second administration. we're humbled by the public trust, and decorated by the task, confident in our plans, committed to our responsibility to build a better commonwealth and in the sure and certain face -- faith that certain -- that optimism and the grace of god,

our best days lie ahead. thank you all. god bless you all. and god bless the commonwealth of massachusetts. thank you. [applause] [applause] [applause] >> president obama introduced a gene sperling as his new economic council director. the former adviser to president clinton will move from the

treasury department. the president spoke at a windows manufacturing plant in maryland early today and we will have that again for you tonight at 8:00 p.m. eastern. health care dominated the house chamber today as members agreed to a rules package that will govern debate on a repeal effort to the health-care law. seven hours of debate will start next tuesday with no amendments allowed. a final vote on repeal is expected wednesday. the senate has said they will not take up the repeal and president obama has bowed to veto any repeal efforts. >> middle and high school students, it is time to off load your video for the studentscam documentary contest. get your video to us by january 20 for your chance to win $5,000. the cspan student cam contest,

go on line to studentscam.org. listen to historic seat -- supreme court cases. saturday, the court considers the definition of independent contractor, breach of contract, and racial discrimination. >> mr. mcdonald did not hold any rights under the contract between his company and the dominoes. >> listen to the argument on cspan radio and 90.1 fm and online at cspan radio.org. >> every weekend on c-span 3, experience american history tv starting saturday at 8:00 a.m. eastern. 48 hours of people and events telling the american story. here historic speeches by leaders and eyewitness accounts of events that shaped our nation. visit museums, historical sites, and college campuses as top history professors and leading historians tell them to

america's past. american history tv, all weekend, every weekend, on c- span 3. >> earlier today, the federal reserve chairman ben bernanke said the u.s. economy is showing signs of self sustaining recovery but he cautioned it might take up to five years for unemployment levels to fall to historic norms. he spoke before the senate budget committee for about 2.5 hours. >> i want to welcome everyone to the senate budget committee this morning, especially senator sessions. he has not formally been recognized as ranking member of the budget committee but that just as a formality. he will be as soon as the resolution is adopted.

i intend to treat senator sessions at the ranking member here today. i think that is the appropriate thing to do. i very much welcome senator sessions as my partner on this committee. he has considerable knowledge of the budget and the budget process and i very much look forward to working with him as we confront the significant challenges facing the country. i also want to welcome the federal reserve chairman ben bernanke back to the budget committee. this is chairman bernanke's third appearance here and we have always benefited by his wise counsel. i believe when the history of this. period is written, you will be one of the heroes in averting a financial collapse. i was in a meeting with the treasury secretary and yourself

when you warned us of how dire the situation was in late 2008. those moments will be forever riveted in my memory and in yours as well, i'm sure. i personally believe york and then secretary of treasury hank paulson followed by this administration have taken steps that were critically important to of guarding a financial collapse, not only here but globally, as well. still, our nation faces very serious challenges. we know we are on an unsustainable course with the budget, borrowing about 40 cents of every dollar that we spend. clearly, that cannot continue for very long. on the other hand, we also face a fragile economy. with the one in every six workers either unemployed or underemployed. that requires our immediate attention, as well. my own belief is that we need to

put in place a plan this year to get our fiscal house back in order. that plan needs to be phased in over a period of time along the lines of what the fiscal commission proposed. i think we also understand where we have come. this has been an extraordinary period in the country's economic history. but like to go over a brief history of what we have experienced. i personally believe the federal response did avert what could have been a financial collapse. i believe it was that serious in the meetings i was in with then secretary of the treasury hank paulson and you, mr. chairman. the risks were very clear. we have seen some progress made. in fact, important progress has been made. private sector job growth has returned but not as much as we would have liked very we heard

numbers this morning, something over 100,000 jobs created in the private sector. it is a dramatic improvement over where we were in january of 2009 when we were losing 800,000 private-sector jobs per month. now we have had 12 consecutive months of private sector job growth. the pattern is the same economic growth although somewhat better. in the fourth quarter of 2008, the economy actually contracted, actually shrunk by 6.8%. more recently in the third quarter of 2010, we saw a positive growth of 2.6%, again a dramatic improvement while not as strong as we would hope. we have now had five consecutive quarters of growth. we have also seen a dramatic rebound in the stock market after falling to a low of about

6500 in march of 2009. the dow jones is now over 11,500. two of the most respected economists in the country, mark and alan blinder did an analysis that message -- measure the impact of tarp and stimulus and included the fed's monetary policy actions and they concluded, as follows -- we find that if the affects on real gdp, jobs and inflation are huge. it probably averted what could have been called the great depression 2.0. when all is said and done, the fiscal policies will cost taxpayers a substantial sum. but not nearly as much as most had feared and not nearly as much as if policy makers had not

acted at all. if the comprehensive policy response say to the economy from another depression as we estimate, they were well worth the cost. this next chart shows dr. linder and dr. zandy's estimate without the federal response. we would have had a million fewer jobs in the second quarter of 2010 if we had not had the federal response, the tarp and a stimulus. we see a similar picture with the unemployment rate. the rate averaged 9.7% in the second quarter. according to dr. blinder andzandy, if we did not have the federal response, the rate would have been 15% in the second quarter and would have continued rising to over 16% in the fourth quarter of 2010. clearly, the federal response to the economic crisis has had and

continues to have a significant positive impact on the economy. we are not out of the woods. we cannot forget that as i mentioned before 1 in and every six of our citizens are either unemployed or underemployed the unemployment rate in december which was announced this morning was 9.4%. this is still far too high. the federal reserve projection shows the rate is likely to come down only slowly, averaging still in the high a percentage point range by the fourth quarter of 2012. as i noted, we must now also pivot to addressing the long- term fiscal imbalances that the country conference. i believe we are at a critical juncture. we have been borrowing, as i mentioned earlier, 40 cents of every dollar that we spend.

that cannot continue much longer. spending is at the highest level as a share of our national income in 60 years. revenue is at its lowest level as a share of our national income in 60 years. i believe that indicates you have to work both sides of that equation if we are to make progress. gross federal debt is already expected to reach 100% of gdp this year, well above the 90% threshold that many economists see as the danger zone. a leading economist came before our commission and has come before this committee, dr. carmine reinhart who has studied 200 years of fiscal crises around the world. she concluded that when government debt is a share of the economy exceeds 90% and she is referring to gross federal debt, that economic growth tends to be about one percentage point

lower than it would be of debt levels were not so high. that association replied -- applied to the united states today would translate into a potential loss of hundreds of billions of dollars and substantially fewer jobs for americans. i believe the deficit and debt reduction plan assembled by the fiscal commission could provide a blueprint and a way forward. the plan would stabilize the publicly held debt by 2014 and laura to 60% of gdp by 2023 and roughly 30% by 2004. that is the public a pal debt, not the gross death. the bipartisan commission voted for the plan. 60% of us supported it. five republicans and five democrats and one independent. i think that demonstrates that we can reach across the aisle to do things that are critically

important for the country, facing up to the debt threat is something we must do to get it. with that we will turn to senator sessions for his opening remarks. i want to welcome him as ranking member of the budget committee. >> thank you. i look forward to working with you to help make our country better. we have real serious challenges ahead of us. i also want to know how much i have been mired our former ranking member, judd gregg. i know you and he had a great relationship and his leadership was particularly valuable. people trust his judgment and i

hope that i can come close to being as affected as he has been in this position. i like to share some thoughts and concerns. i know that when the mortgage crisis hit and the economy was whacked, many people got together and tried to make some decisions. it would have been better, i think, and we see in the mortgage crisis two years in advance and taken action to make the crisis less real. i say that because we should be humble about where we are today. i don't think anyone fully understands this magmas and world economy we are part of. i don't think anyone weather is the federal reserve, the secretary of the treasury, or congress can have a meeting and be sure that the action we take

will have certain impacts on this mass of the economy of which we are a part. when you are confused, you have to return to the fundamentals of paying your bills on time and create some confidence in the economy. today is our committees first year of the 112th congress. we meet on the heels of an historic election. that election was important for the american people rebelled against wasteful washington spending and a government that has grown too large and too intrusive. the american people also repelled against a political establishment that has placed our country on a path to fiscal decline. solving our nation's economic and debt crisis is about more than economics. it is about protecting our whale life at home and our standing abroad as a great nation and it is about honest and moral power. our goal is not an era of

austerity but an era of prosperity. restoring fiscal discipline and strengthening the private sector is the only way to create growth and opportunity for every card or the american and it is the only way to protect our country's greatness and -- in its vital role in the world. to solve our problems, we must speak about them candidly. our nation's debt will soon be equal to the size of our entire economy. 40% ever budget relies on borrowed funds. 2009, the interest on our debt alone cost $187 billion. the congressional budget office projects that under the president's budget, these interest payments will climb to $916 billion in 2020. that exceeds any other part of our budget and is growing faster than any other part of our budget. that is vastly superior to the

defense budget. we are on a path that is unsustainable. the only real question is -- how much or road is left between us and the edge of the cliff? the american people understand the situation. they understand that years of unchecked federal spending has squandered our nation's wealth and threatened our children's future. the american people understand that you can only live beyond your means for so long. eventually, the bill comes due. fundamentally, it is immoral to take from my children their wealth. so we can spend unearned wealth today. there are other problems, too. considering the housing bauble, congress delayed action at fannie mae and freddie mac. the federal reserve was asleep

at the switch. one day, the bubble burst and the whole world changed. no one knows exactly what will happen if we continue our extension on the current course but we must not find out. james bacon wrote a recent piece describing some of the worst potential consequences saying that we need to be more specific about what the consequences will be. he said that one day the treasury will hold an auction and there won't be buyers. the federal reserve will step in as a buyer of last resort conjuring money from the etrher to buy bonds. injection of mass of liquidity into the financial system will create fears of massive inflation calling the dollar to plunge and interest rates to rise and the resources of the european union and international monetary fund will be stretched to rescue the finances of tiny greece and ireland. the united states will not only

be too big to fail, but too big to bailout. the emergency action by the government, the economy will plunge into a depression three times more acute than the recession we just experienced. i don't know if it would happen had anhatbarrons' editorial warning of a hyper- inflationary spiral. while the federal reserve can monetize the debt, historically, a break point occurs when a government borrows an amount equal to 40% of its expenditures for an extended period of time very in a recent interview, chairman bernanke, you said you were 100 percent confident that the fed could prevent such inflation but i am not sure that the masters of the universe, you may be being a master master, how confident you can be about

that. you have been wrong before. while we can debate how great an eminent the risk is, there is now debating what the american people have declared in poll after poll. we are on the wrong track. where is the leadership from our administration? just last december, the president would only agree to maintain current tax rates if congress agreed to new spending, all borrowed and that would add another $250 billion to the death. instead of slowing down, president obama accelerated. easing of that battle will not solve the problem. when you are driving toward a clif 90 miles per hour, you cannot just slowed down to 60. you need to hit the brakes and steer to the right road. for too long, congress and washington compromise has changed the pace and not the direction that we are going.

last november, the american people american"enough." that is precisely what they said, i believe. they sent congress a new freshman class with a clear set of instructions. that included a budget that changes our trajectory and genuinely reduces the size, cost, and burden of government. we can learn from those setting a strong example. in new jersey, governor christie has a plan to close his state funding gap without raising taxes. in britain, the new conservative government has taken strong action and has a plan to reduce their deficit from 10% to 4% of gdp in four years. it is a hard road, but it leads to a better future. yet some would argue that

reducing government spending a small amount will reduce the quality of our life, but the surest way to lower the quality of life in america is to continue on our current course. = spendi without restraint = and mortgaging the merits of our children. the talent to the head may be difficult but the choices we face are not. we need to limit government, control spending, and create an environment where the free market can pride and large. it is a road map our founders laid out more than two centuries ago. there is no doubt that it will work again. america's progress is not a thing of the past. we can do this. to achieve this progress, we can no longer compromise our nation's founding principles. instead, we must fight for them and in so doing, hope to find common ground in doing so. chairman bernanke, i look

forward to discussing these and other issues with you today. i look forward to getting your thoughts on how you and the administration if you are working together with a plan for strengthening our future. thank you, mr. chairman. >> thank you so much. i want to say that i welcome your analysis. we may not agree on every solution. the one thing we are agreed on is we are on an unsustainable course and we have an obligation, a very serious and somber obligation to come up with a plan and do it sooner rather than later. i look very much forward to working with you on that theme at back to you. i value those comments. >> mr. chairman, thank you so much for coming. i want to tell the committee that chairman bernanke has offered to come up here in a closed session with committee members to discuss what he sees with respect to the economy.

we very much welcome you being here as our first witness as we embark on the challenge of putting together a budget for this year and succeeding years. welcome. >> thank you. i want to thank you for this opportunity to offer my views on current economic conditions, recent monetary policy actions, and issues related to the federal budget. the economic recovery that began a year-and-a-half ago is continuing although at a pace that has been insufficient to reduce the rate of unemployment significantly. the initial stages of the recovery in the second half of 2009 and in early 2010 were largely attributable to the stabilization of the financial system, expansionary monetary fiscal policy, and a powerful inventory cycle. growth slowed this past spring and as european debt problems led to increased volatility in

financial markets. more recently, we have seen increased evidence that a self sustaining recovery in consumer and business spending may be taking hold. in particular, real consumer spending rose at an annual rate of 2.5% in the third quarter of last year and the available indicator is that likely in -- increase of slightly better rate in the fourth quarter. new investment in software has grown. as firms replace aging equipment and made investments that had been delayed during the downturn. the housing sector remains depressed as the overhang of vacant houses continues to weigh heavily on home prices and construction and nonresidential construction is quite weak. overall, the pace of economic recovery seems likely to be moderately stronger in 2011 that was last year. although recent indicators of spending and production have been encouraging, conditions and

the labour market have improved only modestly at best. after the loss of nearly 8.5 million tons in 2008 and 2009, private payrolls expanded at an average of only 100,000 per month in 200010. 10 that is insufficient to reduce the unemployment rate materially. a number of indicators of job openings in higher plants have looked stronger and initial claims for unemployment claims declined through november and december. these hopeful signs, with output growth likely to be moderate in the next few quarters and employers reportedly still reluctant to add to payrolls, considerable time will likely be required before the unemployment rate has returned to a more normal level. persistently high unemployment by damping household income incompetents could threaten the recovery.

roughly 40% of the unemployed have been out of work for six months or more. long-term unemployment not only imposes an exceptional hardships on the jobless and their families but it also erodes the skills of those workers and may inflict lasting damage on their employment and earnings prospects. recent data shows consumer price inflation trends downward. for 12 months, the prices for personal consumption rose only slightly. the food is a better gauge of underlying inflation tends -- trans which was 0.8%. the downward trend in inflation over last few years is no surprise given the low rates of resource utilization that have prevailed over that time.

as a result of the weak job market, wage growth has slowed along with inflation. or the 12 months ending in november, hourly earnings have risen only 1.6%. despite the decline in inflation, long run inflation expectations have remained stable. the rate of inflation the households expect over the next five years has remained in a narrow range of the past few years. with inflation expectations stable at levels of resource utilization expected to remain low, inflation is likely to be subdued for some time. it is likely that economic growth will pick up this year and the unemployment rate will decline somewhat, progress toward the statutory objectives of federal reserve is expected to remain slow. the projections submitted by the federal market committee shows

that despite forecasts in 2011 and 2012, most participants expect the on the planned rate to be close to 8% two years from now. at the threat of improvement, it could take four to five more years for the job market to normalize bully. fmoc participants projected inflation to be at historically low levels for sometimes. that raises several concerns. very low inflation increases the risk that new adverse shops could push the economy into a deflationary period that is a situation involving ongoing declines in crisis. experience shows that deflationary can lead to extended periods of poor economic performance. even a significant perceived risk of deflationary may lead firms to be more cautious about investment and hiring. with short-term nominal interest rates close to zero, declines in expected inflation increase and

the real cost of servicing existing debt and the expected real cost of new bar wing. by raising effected debt burdens and by inhibiting new investment, higher real borrowing costs. -- make a real drag. it is important to recognize that there is of low inflation involves slow growth in nominal wages and incomes as well as prices. i have already alluded to the recent deceleration in our early warnings. in circumstances like those we face now, very low inflation or deflation does not necessarily imply any increase in household purchasing power. because of the associate deterioration in economic performance, very low inflation or deflation arising from economic slack is generally linked with reductions rather than gains and the pretenders. -- rather than gains in living standards.

we would normally respond by reducing its target of the federal funds rate. the federal reserve target for the federal funds rate has been close to a zero byte -- since 2008 leaving no scope for further reductions. for the past two years, we have been using alternative tools to provide additional monetary accommodations. between december, 2008 and march, 2010,the fmoc purchased $1.70 trillion in securities in the open market. the proceeds of these purchases ultimately find their way into the banking system with the result that the depository institutions hold a high level of balances with the federal reserve. longer-term securities purchases are a different tool, the goals and transmission mechanisms of the two approaches are similar. conventional monetary policy works by changing market

expectations for the future of short-term interest rates which employs as the current level of longer-term interest-rate and other financial conditions. these changes in financial conditions affect household spending. securities purchases by the tories are put downward pressure directly on longer-term interest rates by reducing the stock of securities held by private investors. these actions affect private sector spending through the same channels as conventional monetary policy. the federal reserve's earlier program of asset purchases appeared to be successful in influencing longer-term interest rates, raising the prices of equities and other assets, and improving credit conditions more broadly thereby helping stabilize the economy and support the recovery. in light of this experience, late last summer, the fmoc began to signal that it was considering providing

additional monetary accommodation by conducting further purchases. at the meeting in early november, we announced our intention to purchase an additional $600 billion in securities by the end of the second quarter of 2011 or about 1/3 of the value of securities purchased an earlier programs. we maintained our policy of reinvesting principal received on the federal reserve holdings of securities. the fmoc stated it would review the program regularly and will adjust the program as needed to meet its objectives. the committee it remains on unwaveringly committed to price stability and in particular to maintaining inflation at a level consistent with the federal reserve mandate from the congress. it bears emphasizing that the power reserve has all the tools is to ensure that we can effectively exit from this program at the appropriate time.

the federal reserve possibility to pay interest on reserve balances held at reserve banks will allow us to put upward pressure on short-term interest rates and a tightened monetary policy when needed even bank reserves remain high. the fed has invested considerable ad in developing methods to drain or immobilize bank reserves as needed to facilitate the smooth withdrawal of policy accommodation when conditions warrant. if necessary, the committee could tighten policy by redeeming or selling securities on the open market. as i am appearing before the budget committee, the fed purchases of longer-term securities are not comparable to ordinary government spending. the federal reserve acquires financial assets, not goods and services. alternately, the federal reserve will normalize its balance sheet at the proper time by selling these assets into the market or allowing them to mature. pick in the interim, the

interest that the reserve earned from its securities holdings adds to the fed remittances to the treasury. in 2009 and 2010, those remittances totaled $120 billion. fiscal policy makers face a challenging environment. our nation's fiscal position has deteriorated since the onset of the crisis. this deterioration is the result of the effects of the weak economy on revenues and outlays along with the actions we are taking to ease the recession in steady financial markets. fiscal policy makers will need to continue to take into account the low level of economic activity and a fragile nature of the economic recovery. an important part of the federal budget deficit appears to be structural rather than cyclical. the deficit is expected to remain unsustainably elevated after economic conditions have

returned to normal. under the cbo alternative physical model which assumes that most of the tax cuts enacted are remained -- remain permanent and discretionary spending rises at the same rate of gdp, the debt is projected to drop from 9% sign to 5% but then to rise by the end of the decade. the budget outlook is projected to deteriorate more rapidly as growth in health spending boosts federal outlays in entitlement programs. federal debt held by the public is projected to reach 185% of the gdp by 200035, up from about 60% at the end of fiscal year 2010. the cbo projections ignore the adverse effects of such high debt and deficits. it government debt and deficits

were to grow at the pace envisioned in this scenario, the economic and financial effects would be severe. diminishing confidence on the part of investors, the deficit would be brought under control would lead to sharply rising interest rates on government debt and broader financial turmoil. high rates of government borrowing would drain funds away from private capital formation and increase our foreign indebtedness with adverse long run a fax and u.s. output, in comes, and standards of living. it is widely understood that the federal government is an on an unsustainable fiscal path. we have done little to address this. doing nothing will not be an option in definitely. the longer we wait to act, the greater the risk and the more wrenching the inevitable changes to the budget will be. the prompt adoption of a credible program to reduce future deficits would not only enhance economic growth and stability in the long run but

could also yield substantial meal term benefits in terms of law -- long-term low interest rates and consumer confidence. plans put forward by the president's commission on reform and other prominent groups provide useful starting point for a much-needed national conversation about our medium and long-term fiscal situation these various proposals differ on many details, each gives a sobering perspective on the size of the problem and offers the potential solutions. economic growth is affected by the levels of taxes and spending and their composition and structure. i hope that in addressing our long-term fiscal challenges, the congress will seek reforms to the tax policies and spending priorities that serve to reduce the deficit but also to enhance the long-term growth potential of our economy. it would be by investing in human capital and promoting research and development and

providing infrastructure and reducing disincentives to work and save. we cannot grow out of our fiscal imbalances with ease. thank you, mr. chairman. centre sessions, i would be glad to take your questions. >> thank you for your excellent testimony. i want to go for your final point. we have a special responsibility to our colleagues as the budget committee and to the country to propose a fiscal policy going forward. what i hear you saying is that it is critically important that we adopt a credible plan, a longer term plan to deal with deficit and debt. is that an accurate understanding? >> that is correct. our fiscal issues are very long- term in nature. they increase -- the difficulties increase over time. merely addressing this year's spending will not solve the

problem. we need to develop a plan, one that markets will accept as plausible to address longer- term budget deficit that we face. >> >> by $4 trillion, which would stabilize the debt in the short term, but as importantly bring the debt down as a share of the economy to roughly publicly held debt to 30% of gdp. that is an extended period of time. ms. -- is that the magnitude of the size of a plan that is necessary? >> no one knows exactly what the desirable ratio is in the long run. if you mentioned the 90% number has an offer level of comfort. in the near term we need to focus on stabilizing the debt- to-gdp ratio.

under the alternative scenario, it rises indefinitely. that is not sustainable strength if we could achieve a reduction in the deficit that would be significant to bring the primary deficit close to thaw 0 and would stabilize the ratio over the next decade. i think stability is the next stop, and bringing down is a bonus. >> the conclusion of the commission was job one is to stabilize the debt. we talk about these different measures of death of -- publicly-held debt is currently 60%. the gross debt is about 90%. most of the advice to the commission was you need to stabilize it. publicly held at 60%, the gross debt and 90%, but over time, you need to bring it down, and not

consider it a finished job. you need a margin to deal with future shocks. is that your judgment? >> yes paris stabilizing would be an important first step. >> -- yes. stabilizing would be an important first step. >> job one, stabilizing. number two, the timing. the commission proposed roughly two $0.20 trillion of spending cuts, nearly $1 trillion of new revenue, and the rest of the savings was savings of interest. in terms of when you pick, that are -- pivot, that is a question. the conclusion was you do not need to take the next steps that

need to be taken for the next several years. he need to begin. in need to adopt a plan, but the tough medicine needs to wait until the economy is on strong ground. what would your recommendation be? >> mr. chairman, i think the issue is credibility. keep it is not sufficient to say we are not doing anything now because of the recession, we will do something later, without specifying what that is. if we could adopt a credible plan that is specific enough and credible enough to address the long run situation, that would be the most positive thing we could do, and in doing so we could get all of the benefits without having to take actions that would endanger the very near-term recovery, which is somewhat fragile. >> that was very much the conclusion of the commission. if it is not enough to say we are going to do something. you have to adopt the plan. you need to put it in place

legislatively so that people now -- and now we are going to cut spending, improve the revenue base, and we are going to have savings of interest costs, and it has to be credibly scored, real, but it should not have the bite occur too soon, or you in danger this fragile recovery. you made another set of comments that i thought were important. if that is the composition of the spending reduction and their revenue is also critically important to future economic growth. you say we need to pay attention to human capital of -- education. pay attention to the infrastructure because that improves the economic competitive position of the united states. when you are imposing spending cuts he left to go after things

that are superfluous. goodness knows as we look across federal spending there are places we are doing things that are not enhancing growth, not constitute way -- waste. the idea that just cutting which will solve this problem, and i wish it were the case, but it is necessary, but not sufficient. on the revenue side, the commission concluded one of the best things we could do is broaden the tax base, and eliminate expenditures, but simultaneously reducing rates to make america more competitive. is that what you had in mind when you talk about paying attention to the composition? >> yes, mr. chairman. on the first point, there is no distinction between consumption and investment sharply. we need to think about making investments for the future as opposed to spending on current

needs. we should ask the question, will this provide benefits in the future, a more productive, competitive economy? on the tax side, i do not think it is controversial among economists that rising rates combined with credits and so on leads to a tax code that is complex and can distort economic decisions. i think all of the major deficit reduction commissions have taken the opportunity to talk about the need to lower rates, but to propose new polls, so as not to lose revenue -- loopholes, so as not to lose revenue. it is consistent to address the long-term deficit issues, and also think about making our tax code and spending priorities more growth-friendly. >> there is no one that could

have participated in this process that did not concluded -- did not conclude this tax system is out of date. it does not take account of the world that we live in today. the other conclusion the commission made was that you have to have everything on the table -- every part of federal spending has to be dealt with. even defense. one of the most startling pieces of information came to the commission. 51% of the workforce at the department of defense. that does not, the contractors. when we passed about the contractors, they told us they could not tell us how many they had, not because it was secret, but because they did not know. when we asked them what was

their range, they said between one and 9 million. that is a pretty broad range. we have issues throb the federal government. we will have to address them -- throughout the federal government it will have to address them. i appreciate the advice you have given us. >> by the way, we are going with eight-minute rounds, a little bit longer than usual because of the members better here. >> thank you, mr. chairman. first, mr. bernanke, let me pursue the question that revolves around your confidence about being able to prevent inflation. you know that you remain on unwaveringly committed to price stability in your statement, and in testicular maintaining inflation data level consistent with the mandate.

it bears emphasizing that the federal reserve is doing all it needs to ensure that it would be smoothly and effectively exited from the program at the appropriate time. we could know precisely when and when the suit exit, and if you do so smoothly. i have noticed that the bond market, and the almost consensus view around wall street and investors is that bonds are a bad investment, and that presumably they expect a realistic legality of any increase in interest rates in the future as a result of quantitative easing, deficits, and the like. it looks to me like, would you not agree, that investors are

getting nervous already? >> well, senator, first, in your earlier comment about the 100% certainty, what i was talking about was not that we would know exactly the certainty that the right moment. i was certain that we have the tools that we need. it is always the case that when you are reversing monetary policy in a period of growth, if you could be too early or too late, but the is true for normal as well as a neutral monetary policy. i am not trying to claim on missions. if it is always possible we will be too slow or to collect -- quick. as far as inflation is concerned, the actual inflation rate is the sense of the added post-war low, and expectations look stable. >> is there a difference between interest rates on the federal

debt and inflation? >> on the federal debt they are quite low as well, and on the interest bond market, the break- even is about where you think they wanted the if people expect the fed to keep inflation at around two per cent, where is -- where we think we should be aiming. we pay close attention to the situation, and we take it seriously. >> just trying to bring a little common sense and an honest question to you, it seems the the bond market is nervous. it seems that the quantitative easing plans continue, and may continue again, and that the deficits continue at an unsustainable rate, why should people not be worried that eventually that could be a tipping point reached, and a rather dramatic surge in our

interest rates could occur? >> on the monetary policy side, as i said, we are in a situation similar to where we always are -- we need to find the right moment to begin tightening. you mentioned bond market's expecting short-term rates to rise. that would begin correspondence to the fed tightening and reversing monetary policy. on the fiscal side i agree with you. if the congress and the administration to not find a current -- credible plan for controlling long-term structural offices, there could be serious problems in financial markets, and inflation. that is the history of many situations in the past. i do, very much, urge this committee to look for strong and credible itunes to control the federal debt. if that is done, then i do not think inflation will be a long

term problem, what we are trying to do in the short term is create an appropriate balance between the risks of inflation and the risks of deflationary, which are not yet gone. >> with regard to unemployment, i think he made clear in your statement, but it is important to understand, even though the rate and dropped to 9.4%, 100,000 jobs were added, and that is sort of treading water about what you have to have to maintain the current rate. is that not right, and it is not really a number we could celebrate today? >> it is about what we expected, but as you say, if we continue at this pace we will not see sustained declines the >> the predictions were as much as two hundred 75,000 jobs.

>> that was not our prediction, and not most wall street predictions. there was an adp report number that was very high, but that is only loosely connected with the actual number. >> i think the american people are deeply concerned about where we are heading economically. their jobs are at stake. i believe that is legitimate concern. to what extent do you have a plan, and to what extent does the administration, the president, have a plan that seized into the future and says we are going to do a, b, c, indeed, and those things will bring us out of it, and is it written, and can we see it? >> senator, first of all, it was concerned about the failure of

unemployment to decline that motivated us in september to adopt more monetary accommodation. my view is that we have already had some benefits from that. we have seen improvements in the outlook and in financial markets. that is part of what we are trying to do -- keep the recovery going. in addition, we are working very hard in our role as a regulator to improve the availability of credit to small businesses and other borrowers. senator warner has been interested in that issue. that is our top priority. >> well, we have a changeover in the white house. mr. summers is gone. mr. roemer is gone. we have a new chief of staff, i hear, today. i do not sense anywhere in our government that we have the kind

of clarity of leadership we have under mr. volcker when we have the crisis in the late 1970's, and the early 1980's. one of the members said we knew we were doing the right thing perritt they were protesting. some called for mr. volcker called gulf of resignation. we had a plan, and we were staying with that. can the american people have confidence that you and the administration are on the same page, and that we have a plan other than reacting every month or two to changing conditions? >> senator, the federal reserve is independent of the administration. we try to coordinate with the administration and congress. we are independent and make independent decisions. they are not our problems. in our case, we do have a plan,

and i have tremendous respect for chairman volcker, and one of the things he did was what he thought was right even though there was a lot of criticism. that is the importance of the independent monetary policy. at the federal reserve we recognize there are different views. we are trying to do the best thing we can for the american economy, and that is the duty of having an independent central bank. >> thank you. mr. volcker, a history records, was correct. i hope history will record the same for your leadership. >> thank you, senator sessions. let me indicate that on our side it is senator wyden, the the senator stabenow. senator wyden. >> thank you. i want to welcome senator sessions as our ranking minority

member. he is someone i enjoy working with very much. i want to note that i do not believe the auburn tigers have a realistic chance of keeping up with the university of oregon's fast-moving, an innovative offense for the championship game, but we will save that for another discussion. >> well, if you are correct, i will be pleased to where that tie you have gone for a few days third >> we have an agreement, and i will reciprocate. >> senators, thank you. mr. chairman, we are glad to have you here because you and i share a similar deal that the big idea for economic growth for the country is fundamental tax reform, where you go in there and clean out the job-killing, thoroughly discredited mess.

you address that very well i thought in the "60 minutes" discussion you had. here is my first question. it was clear at the end of the year that you had to take some steps with respect to the tax code in the short-term, so that people would not be clobbered at the beginning of the year -- middle-class folks, small businesses, and others. when i am concerned about is when you looked at the overall structure of what was done in december, it has contributed once again to tax on certainty. all of the two-year provisions, the one-year provisions, the savings, the phase out its, the tax code has tripled in just the number of words in the last decade, and that has been fueled once again by what was done in

december. i want to make sure for the record that it is clear that when you were talking about long-term economic growth and you want a different tax model then what the congress passed in december. you do not want to see more provisions added, and more exemptions and deductions. you think by and large we ought to be draining the swamp, cleaning out a lot of the clutter, hold down rates, keep productivity, and provide certainty. you want a different model than what was passed in december for the long term. is that correct? >> yes, senator. what was passed in december was understandable, but i hope that the congress will think hard about what long run tax structure will be most beneficial in lowering rates and

closing repo -- loopholes. >> there has been considerable discussion in the last week or so about the idea of instead of the kind of tax reform you and i want -- comprehensive reform -- just going out and changing the corporate tax rate. i think that would be a big mistake. the reason why is that most businesses in america, probably in the vicinity of 80%, pay taxes is essentially as individuals, as sole proprietors, partnerships -- the whole host of firms that are not in effect c corporations. his they're not a real danger if you go in and just make changes on the corporate side? you have further distortions,

complications, and end up with more uncertainty than a few half if you went again and made a comprehensive overhaul recognizing a connection between the individual provisions and the business provisions. >> as you know, there are many interactions between the two calls, including the double taxation of dividends and many other issues. yes, ideally, i hope you would look at the tax system as a holistic, single part of policy. i do not know what is feasible politically and so on. that is your call. ideally, yes, of course, you would like to make sure the entire federal code is consistent and support of of growth.

>> i will keep you out of politics, but we have several colleagues. the chairman is making an important point. there is such a connection between the individual portions of the code and the corporate portions of the code, to split one out, i think could once again create a whole set of distortions. i appreciate what you are saying, mr. chairman. i think you have touched on in the past that today it is very clear that people low of the internal revenue system. -- loads the internal revenue system. it is at the top of the federal agencies and fountains people are furious about. if you have gotten to the point where you had a one page 10-40

form, senator gregg and i have that in our bill. as you know, chairman volcker has all but proposed that. it was in the bush proposal, for pete's sake, years and years ago. what'd not having a one-page 10- 40 form, where most people could complete taxes themselves in and of itself be a public good in terms of simplicity, understanding, and making people feel more confident that the american economy and the underpinning of the american economy were found? >> as a general matter, simplicity besides been less likely to be discretion -- distortion very, has lower compliance costs, and less need for the irs or accountants to

adjudicate complex provisions in the code. certainly, simplicity is desired, and i think it would make people more comfortable with the tax code because it would be less of a burden, and they would feel more comfortable if there are not all loop -- all kinds of loopholes they did not understand. >> from an economic standpoint one judgment i have made looking back over the last quarter century on this is that a mistake in 1986 was to not have some provision to make it tougher to unravel fundamental tax reform when you got it. in other words, over the last 25 years after it was enacted, pretty much a few weeks later, the bank on the bill was dry, and everyone went back to business as usual. from an economic standpoint, how

useful would it be when the tax code is overhauled this time to make it tougher to unravel as soon as you get to reform? >> as you say, there are political and constitutional issues involved. everything else being equal, greater clarity and certainty is beneficial, and to the extent you could create more certainty, that would be more helpful. >> chairman, thank you. i look forward to following up with you on these matters. the fact that you have been outspoken has given of blows to reformers. thank you, mr. chairman. >> -- given a boost to reformers. thank you, mr. chairman. >> thank you, mr. chairman ted our nation is in tatters.

our tax code is a mess. the only constant is that the federal budget deficit is large and likely to remain that way. to what extent does the uncertainty that comes with these problems undermine economic growth? >> it is hard to make a quantitative judgment, senator, but i am sure it is a negative. i think addressing our long-term structural buffett -- budget deficits would not only reduce the risks we face in the future, but we would probably have near term benefits. as it stands, the one thing we know about our long term tax and spending commitments is said they are not feasible. they cannot happen. they are not sustainable. the more clarity we can achieve, the better off we will be. >> thank you. i was a co-sponsor of the

conrad-greg deficit commission bill, and i was pleased that we got one way or another. i think that shed real light on what needs to be done by congress. i am really concerned about the rapidly rising debt-to-gdp ratios. i have been watching what is happening in europe. they have enacted programs to rein in government spending. some did not act quickly and often had to be bailed out by neighbors. in june, a representative as to whether the united states was nearing a similar point, given our come terrible ratio, and you responded if you did not know how much breathing space we had. rather than an act of austerity cuts, we have seen our gross national debt increased by $1 trillion by june.

can you give us an indication about how much breathing room we have? anything more exact since june? >> i think is inherently impossible to pinpoint the exact date, or level of debt that would create a crisis, or a sharp increase in interest rates. that being said, it would be the better part of valor to take action now, to make sure we did not get too close to that point. i do not know what the number is, but what i know and the cbo 's projections show this clearly, is that absent any action, the jet which the debt- to-and gdp ratio will be heading straight to heaven. that is certainly not going to happen. that cannot happen. if i do not know what point exactly, but that point will come if we do not take appropriate action.

>> i also appreciate your meeting with some other groups. senator warner started a group to review these things. i appreciated your comments about the difference between our debt-to-and gdp ratio and the japanese one, where they have a lot of savings, and we do not. there are so many things i need to be taken into consideration. i know the fed undertook quantitative easing because of the fear of inflation, -- deflationary, yet other than housing prices, americans are experiencing deflationary. america's economy runs to a large degree on motor fuel. if, if some analysts predict, gasoline prices reach $4 a gallon, will this risk choking off the economic recovery? >> first, the facts are that

inflation is 1% including few -- food and fuel. inflation overall is quite low. it is true that people are sensitive to the price of gasoline. we are watching that carefully. i do not think that quantitative easing is the main reason oil prices are up in the past few months the dollar has been quite stable. oil prices are up in essentially all currencies. i think the main reason is the strength of the emerging markets, the demand of energy from china and other fast- growing emerging market economies. that being said, we are watching it carefully, because as you point out, of higher gas prices are like a tax on families, and if they get too high, that will be a negative for growth as well as for inflation. we will pay very close attention to both of energy prices and other commodity prices as well.

>> there is discussion among policymakers about removing the federal reserve's bull mandate about a stable monetary policy and full employment. some of suggested you focusing only on monetary policy. to you have an opinion? >> senator, we are not seeking any change. we think the current mandate is workable paris that being said, it is appropriate for the senate and the congress to consider what mandate they want to set. there are central banks that focus on price stability. whatever decision the congress next, we will honor the decision and pursue that mandate. >> thank you. i did not of any further questions. >> thank you, senator enzi. senator warner. >> thank you, mr. chairman.

let it knowledge what my colleague, senator nc has already said, and thank you -- and z. has already said, and thank you for being able to meet with a growing bipartisan group of senators. senator enzi and i have been working along with senator warner and others, say we need -- senator wyden and others, saying we need to move forward with a real plan. complement's to senator conrad and others, that while an imperfect, and that -- your comments on the president's commission, the we ought to go ahead and take the work product of the last year and use that as a starting point. both you and senator sessions have said that simply talking about deficit reduction does not get us any place. we need to have a real plan to

work against. it is the intention of us to take that work and put into legislative language and introduce it. a point that senator conrad and senator wyden have made is that if we are going to take on this issue it is going to require dramatic cuts in government spending, and it is also going to require meaningful tax reform again, a lot of the early attention of this work focused on the deficit reduction peace, and not as much on the tax code. that is the side that adds more flexibility. i look forward to working with both sides of the aisle to get

as many co-sponsors as possible to live least move forward with this discussion. it is my hope we could see a plan put forward this year. working off the president's commitment, and actually getting voted on. again, you would never be as in the light as to use these terms, so let me use these terms, but you are basically saying to us, but congress and the policymakers, we need to walk and chew gum and the same time. we need to continue to do short- term stimulus. you've at the fed have done that through your quantitative easing policies, and we, in certain tax policies that were taken in december, both in terms of short-term stimulus -- that short-term stimulus has to be morphed into long-term deficit-

reduction. going back to some of senator conrad's earlier questions, what should we look at as the metrics or other indicators for when we should kind of ease off on the stimulus, and rand paul of -- ram up the deficit reduction peace. should that be based on a time line? senator conrad -- senator conrad, you have a lot of actions starts to click in 2012, 2013, 2014. should it be based on one growth hits at a certain level, unemployment falls to a certain level? what should be the indicators that even if we get a plan in place that would trigger the kind of hard choices now we are

looking at? >> first, let me say i enjoyed meeting with your group. i commend you for the extra work you are doing on this issue. there is an important tradeoff. we need to demonstrate a credible commitment to solving the long-term fiscal problems. the stronger and more credible the plan that is put forward, the less need there will be to take sharp short-term cuts in order to show your seriousness. a strong long term plan that takes him over time will make it less necessary to take actions in the short term that would be counterproductive from the point of view of a recovery. that is why it is important to develop a strong plan. that is the trade-off. the stronger the plan, the less

near term downpayment you need to make. >> let me interrupt for a moment. based upon your testimony today, by reference in the national commission on fiscal responsibility and reform efforts, his that an endorsement that that would be viewed as a strong plan? >> yes. for example, it has the feature that i believe by 2015 there is a stabilization of the debt-to- gdp ratio, which requires a cut in the deficit starting in a couple of years through the rest of the decade. in terms of criteria, there is no magic number, but what we need to see is a sense of momentum, a sense there is enough forward strengthen the recovery that we could feel confident that it will continue and will not be knocked off course by too precipitous fiscal

retrenchment. >> should that -- should those indicators be time, a growth rate, unemployment rate, a combination of all of those? what should be our markers? if we pass this plan, whether it is the commission's plan or a light plan -- light -- like kind serious plan, there needs to be a plan for a shift. >> all of those factors matter, but i think a sustained growth rate above the long-term average would be an indication that the recovery is proceeding and has momentum. again, the stronger, more credible the forward-looking the

plan, the less need there will be to make sharp short-term adjustments. let me in my last moment follow up on senator and see's comments hit by -- i think -- senator and see's comments. i think he was looking on a point when the markets will say no more in terms of our debt-to- gdp ratio. my feeling it -- my feeling is it is not a question of whether we're going to do deficit reduction. it is going to happen. it is really only a question of when, and whether we are going to do this on our timetable in no way that is not disruptive to the economy, or whether it will be dictated by the markets in terms of their lack of faith in our ability to service our debt

over the long term. why i would ask you, and this is my last question -- what i would ask you, and this is my last question, we cannot predict that to a specific percentage or date certain, but what could be some of the warning signs that we are getting close to the press of this? could it not be some kind of extern all, international, god forbid terrorist incident? could not be another economy in europe getting close to a failing point, an economy larger than ireland or greece? what are some of those warning signals, and would you also said that if we started going down the stress of this, it could happen very quickly once we get to that unforeseen point? >> in terms of market signals, i

will look and -- i will look at long-term bond yields, the dollar, indicators of confidence in the united states. i think it is important to understand that no one doubts the united states has the capacity to pay its bills. it is a question of political will. that is what the markets are watching. is the public, the markets and the administration able to demonstrate they are serious and that they have enough willingness to work together to make progress? at the point where confidence is lost in that, we could see a relatively quick deterioration in financial situations, as we saw in europe. things change quickly based on the change in sentiment for the prospect of those economies. >> thank you, mr. chairman.

we look forward to making sure we do not get to that point. >> we appreciate the effort you have mounted. i want to point out that the commission proposal stabilize the debt by 2014, and start bringing it down on a sure path after that. senator manchin. >> [unintelligible] >> i am concerned about the finances of our states and all of the states. what i would like to know from your opinion, as based on the future pension liabilities of both corporate and state governments, the recent reports of the financial crisis but many of our states are facing in the very near future, have you looked carefully at the possibility of a default on

general obligation and municipal bonds by state and local governments and the budget strains that would present to the overall u.s. economy? we are concerned that the stimulus runs the june of this year. what happens? if there is no more stimulus to come, or federal bailout, if you will, and i have to work on a balanced budget amendment and cannot meet these long-term obligations, have you been looking at that, and spent time on it? >> there is no question local and state governments are under a lot of pressure. the federal assistance will continue in 2011, but after 2011, it is going to be zeroed out. on one hand, the states are seeing some unproven in tax revenues as there has been some growth, but on the other hand it

could be using -- losing federal assistance. the pressures will continue for a while, and that will be a head when for the overall economy, as well as the individual states. -- had one for the overall economy, as well as the individual states. it is also true that there are long term fiscal issues relating -- relating to pensions of state employees and also health-care promises which in most cases are almost entirely on funded. those could be as collectively -- as much as collectively to dollars trillion for all of the states together. those are long-term obligations. they do not come in the near term. those are serious long-term pressures. in terms of the municipal bond market, it currently seems to be functioning reasonably well. liquidity is fine.

issuance has been very high, including issuance for capital projects. we are not seen extraordinary costs -- stressed in very visible markets. markets are confident there will not be the fault, and one reason they believe that is that most states have rules that put debt repayment and interest payments at a high priority, above many other obligations of the state and locality. bottom line, the municipal seem to be doing ok, but there clearly is pressure on these governments, and it is something bad will not go away in the near term. when families have problems, they cannot respond, and

understand what we do it on government. they do not think about how much they could spend a day start looking at cutting expenses. what expenses cut the federal government cut that would have the most effect on long-term stability in your recommendation. >> senator, i should say first come out very strongly that these tough decisions are your decisions, and not mine. i do not want to inject myself too much, but i will say one thing that is obvious from the arithmetic, which is that going forward, the cost of health- related programs, medicare and medicaid are rising, prospectively, very quickly. on current trends, said at some

point, medicare, and social security would be what is now the entire budget of the united states. i think an important priority about it as a country and from a fiscal point of view is to think about what we could do to achieve better cost efficiency in the health-care area, and at the same time that we do all we can to maintain quality and access. that is clearly an area we need to look at. that being said, we have military spending and other discretionary spending that you will certainly want to look at. >> there have been some members of congress set long advocated for a federal audit of the federal reserve system. would you oppose an independent audit of the federal reserve system? >> the dodd-frank act included an amendment sponsored by senator sanders and others that includes an exhaustive audit of

all of the financial aspects of the federal reserve. in fact, on december 1 we released all of the information about all of our lending programs, financial programs, credit programs that we undertook during the crisis. so, as far as our finances are concerned, we are an open book, and if there is any area where you or your colleagues are dissatisfied with the information i would be happy to work with you to get what you need. in terms of all aspects of finances and operations, i think it is reasonable for congress to have that information. the one area where i have been concerned and this goes back to an earlier comment is that monetary policy and and attendance is important for the stability of our economy and financial markets. fed audit is really a code for monetary policy decisions -- that is where i would be less

comfortable. >> finally, is the federal reserve considering any changes that would negatively impact the financial lia -- viability of local banks around the country? >> to the contrary. we have a strong commitment to community banks. we have recently increased our schedule of direct meetings to the board with representatives of community banks. there are a lot of things to be done with financial regulation. it is our objective -- the intention of both basel three and the dodd-frank act are to focus on the largest so-called too big to fail banks, and make them not to big to fail. we want to make sure we do all we can not to increase the regulatory burden on small banks face. small banks have played an

incredibly important role, particularly as large banks have cut back to -- and proven their worth to the u.s. economy. >> thank you. >> thank you, such a. senator stabenow. >> thank you. welcome, mr. chairman terry thank you for your thoughtfulness. when you laid out in terms of where we have come from, of what we have done, and where we need to go is very important. i feel like i have a need to make sure we do not have three revisionist history when we talk about how we caught here. if we are not point to repeat mistakes that are going to be made, i think it is important to say for the record that when i

had the opportunity to serve with you, we have not always been in this situation. there were on number of decisions made on spending, frankly without accountability that have gotten us where we are. i would argue vet the previous administrate -- that the previous administration was not focused on those things that create innovation jobs -- innovation, jobs, or focus on opportunity or security for middle-class families. it was very much focused on the benefits to a privileged few. at the time, in the last administration, we were told deficits did not matter when we were focusing on things that would benefit the privileged few. now, after two tough years, we are turning it around.

we have not gotten things back on track. people in michigan are still hurting, although it is better. we have a long way to go. my concern is we are now hearing with the new majority in the house that, again, deficits only a matter when it is things that effect middle class families in terms of opportunity, education, innovation. when it comes to the policies that got us into this mess of focusing on tax cuts for the privileged few, supply side economics, hoping it will trickle down, that does not count. we saw this week over $1 trillion exempted from the budget rules that will add over $1 trillion in debt if we go forward with that. based on our way of looking at the economy that frankly did not work and got us in the last decade, in my judgment, into the hole we are in thaw.

so, mr. chairman, i want to ask you how we get out of this whole, both short-term and long- term, and i agree we need a credible plan, and very strongly share your view that we need to be very careful in the short run. it is a fragile situation. i do not frankly see how we get out of this with over 15 million people out of work. how do we get out of deficit if we do not first focus on jobs? one of the things i am proud of is we did not give up on american manufacturing two years ago where the american automobile industry. this year, all three auto companies are making a profit, actually bringing jobs back to this country, and because of our investments in innovation we are going to go from 2% of the

world's battery manufacturing to 40% in the next four years. my question, mr. chairman, relates to the immediate situation for families that are not yet feeling this recovery, and the fact that we have tens of millions of people who are out of work. frankly, when we talk about 2008 budget numbers, i would like to go back to 2008 job numbers and focus on that. how would you focus on job creation in the short run knowing we have serious long- term issues that have to be addressed on the deficit, but at the same time i would like your reaction to the notion that we will not get out of death if we have over 15 million americans out of work -- out of and that if we have over 15 million americans out of work? >> you are right that a large part of the deficit is what we

call a cyclical deficit that rises when unemployment is above a normal level. we need to addressedg the structural component. again, i think that we need to think of fiscal policy as a piece. you have to think about them together. the more credible and effective our plans are for addressing the long term structural issues, the more scope we will have, the more flexibility we will have to allow for continued support for the recovery now, that we continue to need as the economy remains in a very still weak and

fragile condition. my strategy is to think about the long-term and short-term. combine those two things. you mentioned innovation. as i talked about, the composition and structure of government spending, tax code, and so on is also very important. are we doing enough for innovation? we spent quite a bit of money on that, but is it well directed? is it sufficient to keep our leadership position going forward? those would be the themes i would note that a long-term structural deficits need to be addressed, and doing so would give us more flexibility in the short term. we need to think about what we are doing to promote long-term growth, longer term innovation,

so people could get a better job against the better jobs and sustain higher incomes. it is it -- better jobs and sustain higher incomes. they are interconnected. >> i share your feelings that it is about balance and putting in place a long-term plan while understanding we are in transition now as a country. it is important we invest in those things -- opportunity, education, innovation -- that allow us to move forward. one quick question to follow up on small businesses. we passed the small business jobs bill. we talked about the importance of supporting community banks. i would just ask, on the one hand we are saying to banks lend more. regulators are saying do not lend. it is critical to the fed and

other regulators health community banks take fuller advantage of the lending initiatives we have placed in the small business jobs bill and i wonder what action the federal reserve is doing or can do to help small business? >> as it happens, i will be on a panel sponsored by the fdic next week with sheila bair and senator warren -- warner, and we will be talking about the small business credit and all of the things the federal reserve and other banking agencies have done. very briefly, we are very attuned to the need to have an appropriate balance. we do not want banks making bad loans. on the other hand, creditworthy borrowers need to have access to credit so they could hire, expand, and help the economy recover. we have been working very hard with the banks and our examiners to get a balanced approach. i think it is beginning to pay

off. there is some improvement. i expect to see more lending this year. in terms of >> we have undertaken a series of meetings where we had met with small businesses, local officials, and tried to identify technical problems that have blocked access to credit. we found it useful things and we are moving forward on the things we learned. >> thank you. >> senator cornyn is recognized for 30 minutes. >> i can clear my throat -- i cannot clear my throat.

thank you for your service and what is a very challenging job. we are all volunteers here. no one is making us do these jobs. we volunteered because we think we can contribute to doing things that are in the best interests of the country. it strikes me there are three events coming up that will provide an opportunity for congress to demonstrate its seriousness at dealing with the runaway spending we have. one is the president paused budget will be due in february. that will be one of the first indications of the president's response to the fiscal commission. i wanted to congratulate our

colleagues who contributed to that. it demonstrated courage in voting for a plan we find differences with. the time for talk is running out. know it is time for action. it will provide an opportunity for the president to set up this budget for the next fiscal year will be the first monday in february. there has been a lot of speculation about what might happen. whether there would be additional condition supposed on voting to extend the debt ceiling which is important. it strikes me the third watershed coming up -- the

expiration of the continuing resolution. i want to ask you about something senator manchin alluded to not just the federal government's problems with its debt, but the states. meredith whitney who foresaw the mortgage crisis predicts 50-100 cities could default in 2011. this could cost billions of dollars of bond defaults and warrants this is the most important issue and the biggest threat to the economy. and many states are in deep fiscal trouble also. there is the potential we could

see some defaults at the state level. i heard what is said about the municipal bond markets not showing any imminent signs of crisis. do you agree this is a serious issue that needs to be confronted? abouton't have a forecast default risk. i think that sounds like a pessimistic view, but something we need to pay close attention to. a lot of cities are under a lot of financial stress. it is something we need to pay attention to because it will have spillover effects.

like thatee anything happening. cities will need to take strong measures to avoid default. it is only a short-term solution for local governments because it will be difficult to get back into the market. they will have to pay a higher interest rate. it will be in their interest to avoid default. while there is no question there is a lot of stress, the municipal market seems to be operating fairly normally. >> let me drilled down a little bit because this is a point i want to get to.

in 2002 you gave a speech before the national economists club and said the fed has the authority to buy foreign government debt as well as domestic government debt. we know under the qe2 plan you are implementing you are buying u.s. government bonds. with that extend to state and local debt? >> only in a very limited day. we have no intention to buy foreign debt. we are not planning any policy in that direction. we have very limited authority on the state and local. we can buy short-term municipal debt that is within certain

categories. we have a limited ability to buy state debt. the dodd-frank legislation restricts our ability to not lend it to an individual borowwer in a broad program. we have no intention to get involved in state and local finance. to the extent there is anyone to look at it would have to be congress. >> i don't have to tell you how a request for a bailout for a state or municipality would be received in washington. let me ask you under chapter 9 of the bankruptcy code, a municipality could go through a bankruptcy proceeding but right now there is no provision of the

bankruptcy code. for a state to go through a chapter 11 with the secured connecting -- secured bondholders will maintain a highest priority. there will be a procedure by which the state could wind its way out of a crisis situation and get back onto a sound fiscal basis. there have been issues that congress ought to look at a procedure that will allow that to happen as one alternative. would that be a good thing for congress to do? >> it will be useful for congress to try to identify what potential problems that might be there.

it will be unusual for a state to default. it has not happened seriously for 160 years. we ought to focus on states meeting their obligations which they have the tools to do. the debt payments are the top priority. we should understand the situation but i am hopeful and expect we will be able to avoid defaults. >> what would be the consequence of a large state like california defaulting on its debt?

>> it has not happened in a long time. it would create a lot of stress in the markets. it would also mean that the state would probably have to pay a higher interest rate. it would be a last resort for the state to do that. >> i thank the senator for asking the question. because this is something we should be paying close attention to. we have been told there are a number of states maybe you have more recent information. we were very much concerned about this watching the fiscal

viability. everything is back to 2008 levels. as far as the aid given to the states. that goes away bind june 30. i think you are upwards of the high 20's that could be in serial -- serious problems. >> we have an analysis underway. this may be one of the things we would like to talk to you about if you have an opportunity to meet with us in all senators. we have an effort underway -- >> what we were asking is there any plan -- i know it hasn't

happened. we are seeing concerns we have. these states have done everything possible. they have cut to the bone. if the cash flow is not there, is there any bailout or other proposal that you have been looking at? is there any plan available that could prevent this from happening? >> could you do that? >> i don't think the fed has the authority. it would not be inappropriate for us to do that. it would not happen in a day. it would be plenty of time for congress to look at alternative solutions. this is a fiscal issue. it has implications for the economy.

i don't think the fed has mush weekend do about it. >> maybe we should check with the nga give you a status of the real crisis. >> we'd better think about how we get input on this. what we heard earlier is a result of the information you shared with us. this is something on the horizon we need to pay close attention to. we apologize because we intercede it on your time. we will give you an additional minute. >> i will use a few seconds to said senator sessions, i am happy to hear you are -- i have a pin that maybe you will be

willing to wear this. >> i would be glad to although i will not lose any sleep over that period >> will we be out there? >> [unintelligible] and come out victorious. i am a little confidence. that is so much fun. i am sure it is one of the great things about america. people can think of something other than politics. >> let me turn to the business at hand and thank you for your testimony. i wanted to start by asking around the qe2 policy. you could summarize it by saying in buying these bonds you are

injecting more money into the economy. doing so reduces the interest born on those bonds, she encourages people to invest more in corporate bonds or stocks to invest in american business. another category would be one also creates more pressure in terms of trying to using a pegged exchange rate to reduce tschida's currency manipulation. do you see both of those as key components of this policy? could you help get our hands are

ronde those? >> the fed is neutral on day -- on the auburn isse. >> there are two senators from or again here -- oregon here. >> we are trying to stimulate more economic activity. this policy has been in effect since august because we began to reinvest our securities. i began to talk about this in public. we have seen it since august significant improvements in stock prices and volatility. we are having some positive benefits on a financial conditions and are contributing to a better outlook.

it is not our intention to do anything particular on the international front. we are focused entirely on the u.s. economy. it is true to the extent china undervalues their exchange rate, that they import monetary policy. this is appropriate for the u.s.. it is not appropriate for china given how quickly they aren't growing. it is forcing them to take some actions, letting their exchange rate appreciate would be helpful because it would reduce the inflation pressures they are going to experience. that is not the key objective. the objective is to try to meet

our price stability and employment goals. >> they are also impacted by the ability to sell our products overseas. let me turn to manufacturing. one of the challenges for american products is the difference in labor rates. there has also been the argument that we end up in a situation where foreign producers have access to the american economy, but american products cannot get into the foreign markets as easily. that has undermined manufacturing in america. there has also been a related conversation -- i see it

starting to appear. one of the reasons we are coming out on the short end of these trade agreements is because we go into these negotiations with other goals that are not economic goals. they are related to military access, fighting a key ally when we and all of twitty wrestling with the soviet union. -- involved with the wrestling with the soviet union. i wanted to see if you wanted to comment on these challenges in our ability to maintain a manufacturing base. >> we remain an important manufacturing power. we still have the largest

manufacturing sector in the world. employment has been declining very sharply, but you are correct that trade and currency issues are an important factor. i have been clear that i believe the policy of china to undervalue their currencies is counterproductive for international imbalances. i hope we can work with china and other countries to create a more flexible exchange rate regime. i think every country has the objectives when they engage in these negotiations, but i hope we will be aggressive at pursuing these remedies as needed to eliminate trade

barriers and tariff barriers. i am very supportive of free trade agreements which allow exports and imports to flow freely. >> let me turn to another issue which is the ongoing impact of the foreclosures on housing prices. there is an ongoing rate of 300,000 foreclosure filings a month print we still seem to be driving down the value of homes resulting in more families under water. they cannot value against the value of the house.

our effort to intervene -- it was a decision to invest $100 billion to assist homeowners. as a result of this has been less than $1 billion. our intervention has been modest at the most. this remains a huge factor affecting the quality of life and their ability to look positively at the future. how does this play into our monetary policy or ways that we should understand better? >> foreclosures continue to be very high. there have been sincere efforts to try to address the problem,

but they run into other bureaucratic difficulties. there are a lot of folks for whom there is no solution, given that income has been lost. this is an important consequence for the macro situation. the high levels of vacancies, homes that are not only empty but reducing the value of the neighboring homes are driving down prices, which is affecting household wealth. it is affecting the residential industry. construction is very weak. the price is so low. new construction cannot recover its costs. it has implications for the

quality of mortgage assets. we are doing a stress test scenarios. one of the main stressors is what happens if house prices were to fall more? how would that affect their mortgage portfolios? it is a very serious problem. it is one of the reasons the recovery is not as robust as it normally would be. >> my time has expired. i do have another question. given the fact that we intruded on your time, go ahead. >> one of the interesting

developments is families started saving substantial amounts. recognizing that they needed to prepare for the loss of a job, which throws a wrench into the economy. but one thing i have heard reference to is that the amount of consumer debt has decreased by more than the national debt has increased. our total indebtedness has dropped. is that accurate? how does that play into the macro economic picture in terms of the impact of our national debt? >> that is correct.

our current account deficit has gone down. meaning that our total need for borrowing was lower than it was before the crisis. that is the opposite side of saying total spending is not enough to bring the economy to full employment. this is consistent with the need for continued monetary policy to support the economy's recovery. >> i thank the senator. maybe we should reduce this so we don't impose too much on the chairmen's time. i got an initial report on the state situation. i asked senator manchin to give us the latest information

available from that source. our conversation on the floor last week, maybe a week ago or so. in looking at what has happened since enacting their budgets, 15 states had new budget gaps open by late november. it totaled -- the entire gap is accounted for by five states. illinois had half of them. arizona about 10%. california roughly 7%. those are the new gaps that opened up after they had closed any gaps under the 2011 budget. what is a serious matter is looking at the 2012 budget gaps.

the national committee of legislatures projected a gap of $97 billion in 2012. the committee on budget policies reports that gap stands at $115 billion, and is expected to grow to $140 billion. we are talking about a significant problem here. with some 35 states projecting gaps in 2012. only 11 states reporting new budget gaps. probably my state has no budget gap. i think governor manchin left his state in good shape. looking back in 2011 they

closed $84 billion of budget gaps. clearly there is capacity to do a significant budget gap closing looking at 2012. but $140 billion is a big number, certainly for individual states. look at illinois, we are talking about a budget gap of $15 billion, which represents 60% of their budget. i do think we need to be prepared with a plan in case we are approached by one or more states. clearly the problem is concentrated in a handful of states. five states where the significant majority of the 2011 gaps, we have to be ready with a

plan if we are approached with requests from those states. understand that is not in your domain, but i think we can anticipate that we may have requests made to us. or the think congress house is going to be interested in bailouts to states. >> mr. chairman, let me open discussion here. the states will be in a situation where they will have to have the flexibility to refinance. they worked off -- the amount of stimulus that help them get through a difficult time.

we thought the economy would pick up. they are making some draconian cuts. with that, our bond ceilings that we were able to go out to the market with, there might be some financing needed to be done here. we will need all the help we can get. can they raise those to see if they could refinance? to find out if they can create values? i don't think the appetite is here is more money. there are some restrictions we could ease up on. that would be most appreciative. it is not if it will happen, it will be when they will need our help. >> since our previous

conversation i immediately asked people to do this survey. i'm not sure this committee will have to be prepared with an answer. it makes good sense. maybe there are ways of helping with creative financing. i don't think there will be much appetite here to send truckloads of money to states. i have about used my time on this round. senator sessions, would you like an additional minute? >> i would. i asked that we will submit written questions to you with regard to the state situations. states are sovereign. they have issued their own debt. the people who loaned money need

to -- their likelihood of being repaid is based on the condition of that state. there is an erosion of -- we need to start bailing out more. i think this whole bailout mentality is having more ramifications than a lot of us think. i understand what you are saying. states need to get their house in order. they should not expect interest loans from the fed if they get in trouble. is that correct? >> they should not expect loans from the fed. the numbers the chairmen refer to our perspective gaps. they are a measure of how much spending cuts will be needed to

achieve balance. it will be difficult but there is some improvement in the economy. tax revenues have picked up. i hope these dates will be able to address it. >> places like california have been living beyond their means for a long time. our state is very frugal. we try to operate a good state. we are not inclined to ask my constituents to rescue someone who has been improper. i know what mr. christie is doing in new jersey. the agriculture department reduced 24%. education down 8%. rhodes' 3%.

i suggest new jersey is not going to sink into the ocean. it will still be there. this idea at that even this deficit commission, i hope i would have been willing to support the recommendations as good as anything we have seen. it does not call for reduction in federal spending. we can do better. the american people are telling you. i don't criticize some of you folks including president bush in it. i don't think you realize the political world we live in. you think in 2001 when we needed to stimulate the economy we can just ask the congress to spend

money. then when they get to a certain point we can tell congress to stop. we were elected to try to balance the budget and -- we had our legs drop off. we were not able to warn against spending. the fed seemed to be saying deficits don't matter. now see how hard it is to turn off the spigot? maybe you can turn off the spigot just like that, but for us politically it is not easy. i think the american people have a sense right now that they want us to do something now. i want to ask you, are you telling us it is premature to start reducing our spending levels because it might hurt the

economy? the brits don't seem to think so. they are cutting now. >> it is a long run issue. the problems are not just this year or next year. they go out decades. it is not too soon to have measures that will bring down deficits over time so that we have a stabilized jet -- stabilized debt to gdp ratio. you will not solve the problem by making cuts this year, you need to think about the future path. the chairmen talked about the debt held by the public. all those numbers don't include the unfunded obligations we have for entitlements.

the true debt is probably three times bigger than what the chairmen is talking about. we should take a long run perspective. that is what economic stability requires. >> i believe we have an opportunity to eliminate waste that would not damage the economy. we need to try to figure out how to create confidence our economy is under control. >> senator wyden. >> i want to ask about china in a different way. i share the -- chair the subcommittee on competitiveness. i want to get your reaction, particularly the cause of creating good paying jobs. one decade ago when china was

admitted to the wto there was a commitment made to marketplace principals. that was what their entry to the wto was all about. in the last six months -- we have seen this over a considerable period of time. we have seen backsliding in china with respect to these principles. two areas i have been concerned about our rare earth minerals, which are important for americans manufacturing. the chinese are saying we will keep our rare earth m inerals here. we are also seeing it with discrimination against american which isrooods,

another important area. my question to you is what is your sense about the implications of the china backsliding on these marketplace principals that they committed to? they are violating wto principals in those two areas. rare earth minerals and digital goods, what are the implications of what they are doing there? what is an appropriate role our government ought to be taking? >> the wto have specific rules and regulations. within the rules that china has agreed to, the wto process looks like it has been working. i would not agree china has been

backsliding. there have been issues all along with a wide variety of things. >> those two areas most recently -- and they are important to the american economy. this is a pretty new phenomenon. this is the last six months. that is why i am talking about the implications for the economy. that is ae eatth, strategic input. i don't think the u.s. has a lot of capacity in that area. we might want to consider investments in that area. there are a number of areas about technological exports where ongoing engagement is going to be important.

the president of china will be here in a few days. i hope that will be an opportunity for high level discussions. we will try to hold both sides to trade and investment obligations. i am not disagreeing with you. >> i come to these trade issues looking for ways to open markets. that is why we are at a critical time. i have voted for every market agreement since i have been in public life. it is important to adhere to principles that insurer everybody has an opportunity to make markets work. we are seeing in a number of areas backsliding from the chinese. i look forward to following up with you.

we cannot meet our target of doubling of exports and substantially lowering the unemployment rates , which constituents are demanding unless we have an opportunity to have fair access to the markets. in a growing number of areas that has not been the case. i thank you for your appearance today. >> senator mcnchin. >> we have been blessed with some of the highest quality coal in the world. we are concerned about most of our assets purchased by foreign countries. we still have our miners working in the mining, but as the senator mentioned most of this product is leaving the country.

that is the ingredient to building industry. i don't know if we are at the critical juncture but we can see it everyday the amount of money they are paying for these reserves. i know this has been talked about, the tarp and bailout. it is still in my area we are concerned that small businesses don't have access to capital. individuals, commercial developers, building industry. the thing that is holding us back is the access to capital. we have heard that we bailed out wall street but not main street. what do you think needs to be done for us opening up the banking industry so it can start taking some calculated risk in putting money back in

the market? >> just on the question of tarp, capital went out to smaller firms and congress recently passed the small business plan that has non-tarp capital to small banks willing to make loans. some of this has gone to small firms and large firms. it is a tough problem because you have small businesses who are used to easier conditions before the crisis. living conditions have tightened up for understandable reasons -- lending conditions have tightened up. the economy has week and the value of collateral, of stores has come down. there are some fundamental reasons why credit is harder to

come by. that being said, there is a tendency to overreact. there is a tendency to tightened too much, the pendulum swings too far. i think in some cases that has been the case. the fed -- we have a responsibility to keep banks safe and sound. we also have interest in having the economy grow. i would be happy to give you much more detail at a more convenient time. we have been taking a lot of actions to try to create a better balance for banks to make sure they can make good loans. that we will not criticize them

for making a loan to a small business or even one where the value has declined. we are sympathetic to what you have been saying. there is some improvement. as the economy expands, i think we will see more lending take place. we are aware of this issue and are reaching out to small businesses. if you have any suggestions, have someone who would be happy to take any concerns. >> i will do that. i will bring specifics. >> thank you. i appreciated the reference to the small business lending fund, which was a proposal by developed in response to the community banks in oregon.

where because of the fdic requirements, of the community banks were unable to land. it was one way to try to get funds into main street banks so they could assist main street businesses. in addition to banks that did not have the capitalization, have banks that do have loans that aren't sitting on them waiting to see what happens with the economy. we can brainstorm ways we can get liquidity in the hands of small businesses. and they are a job machine we have to put to work. finding the right way to do that is important. i wanted to turn back to housing. oregon produces a lot of lumber

and other places consume products that are not being consumed. there are a series of ideas still being talked about. a $100 million promise has turned into less than $1 billion to assist homeowners. one of those concepts is to do a national short sale programs where families who passed a stress test, if their home is sold at a lower value, that the family might have a chance to buy it back using lending that is underwritten based on their ability to pay. a second approach is down payment grants to help first- time home buyers. to help the sort that inventory

of foreclosed homes -- help absorb that inventory. a third is another examination of bankruptcy reform as a way to adjudicate the issues involved in home ownership. a home contract cannot be. with appropriate protocols that we have been alluded to in terms of being backward looking is of great concern to the banking community. as we look at this national housing challenge, which is a major factor in our economy getting back on track. what more can we do here in

congress to take on one of the big domestic issues affecting the quality of life for families? >> i am afraid there are no simple solutions. the ones you mentioned are all interesting. we would be happy to work with you on details. we would be more than happy to work with you. the short sale idea -- it is similar to the idea of having a principal production in the mortgage, which the fed has advocated for a number of years. this is a way of creating greater incentives for the homeowner to stay in the home. that is a program that is currently in place, building on

a program that was passed a couple years ago. that is one approach. not very far. >> i will just interject. the challenge is that as long as a family lives anywhere near viable, and shall institutions are reluctant to write down -- the mortgage holder has concluded the family is going to go under and the home will have to be resold. there is no longer heard this competition between writing down and existing loan on the books. that is why the conversation has migrated in that direction. >> economists have been working on various plans to try to address this problem. i would be happy to work with

you in more detail on these issues. getting the principles down is one approach. on the down payment assistance, we want to design it in a way that one of the concerns we had about the homeowner's tax credit was that it created a temporary bump but did not have a permanent effect. we wanted to do something that created a more sustainable demand for housing. but i have been a member of the committee that oversees the tarp. we have been getting presentations from the treasury on the various programs. they have gone beyond their a national program to look at a

number of experimental approaches, giving states money to apply to their own strategies. there are a lot of things being experimented with a particularly in a world where unemployment is 10% and long-term unemployment is 44%, there are situations where it is difficult to find a solution. >> can i follow up with one more piece? >> if it is breeze. we made a commitment that the chairman will get out of here by noon. >> addresses the issue of shifting demand for work but something more fundamental, is the home interest deduction. that kicks in when you buy a larger house and you are in a

higher tax bracket. the subsidy goes to families who need it the least in terms of becoming homeowners. the idea of a down payment grant -- i am not taking anything away from the concept of interest deduction. the idea is you have a working family of modest means buying a modest house. we are helping them become homeowners, they would not benefit from the mortgage interest deduction. we should help working families buy homes as well as successful families buy a large homes. and also help absorb this inventory of homes. that is the broader picture. >> the chairman was talking about the interest deduction and

there are lots of interesting ways to think about making that more constructive. >> i am not addressing -- >> it raises the point that some people it does not help very much if you don't get the interest deduction. >> one final question we have been asked. with the substantial expansion of the balance sheet by the fed to make sure the flow of credit continued during the downturn, can you anticipate now what percentage of that expansion would be realized as losses? i am told it would be very small. can you give us some sense of that? >> this is not deficit spending. we are buying assets that we will either sell or allowed to run off.

currently, we are in a profit position. our cost of funds is very low. the interest we are receiving we are giving back to the treasury. i got a new number for 2009 and 2010. we gave that $125 billion from this program, is higher than our normal. should it be the case that interest rates rise which could happen if the economy recovers, then those could go down. but currently we are in -- at this point this is a profitable program from the perspective of the deficit. >> is it your forecast that you will not experience losses on this extension of credit made

during the downturn? >> what matters is not losses. what matters is the amount of grievances we sent back to the treasury. under most scenarios because our cost of funding is so low, it backcontinue to premit to the treasury. it is possible there could come a time where we don't remit any thing for the next couple of years. but even in that case we would have the early payments which are above normal and the fact that if this is successful it will increase tax revenues. from a fiscal point of view, this is most likely to be beneficial to the financial position. >> the reason i phrased this

like i did is because there has been a great concern what the federal reserve did was going to result in large losses to taxpayers. and you don't see that. >> i don't see that as likely. our record so far in all of the lending has been very positive from a perspective of returns to the treasury. >> with regard to quantitated easing on the federal purchases, that money that you pay back came from the treasury. is that right? >> yes, but another >> it is interest the treasury did not have to pay to the chinese.

>> it is a zero-sum game in that sense. you believe it is helpful to the economy. that is the main point of it. on "60 minutes" a couple of years ago, he made reference to this being the equivalent of printing money. is that when the fed buys -- is quantitative easing what you meant when you said "printing money"? >> i was talking about a different issue at that point. let me explain what happens. when we buy securities, the money finds its way into the banking system and shows up as reserves that banks cold with the fed. currently, banks are holding a large amount of reserves with the fed. it will have to be unwound as we exit from the program. there are some folks out there that thinks we are literally printing money and putting it in circulation. that is absolutely not

happening. >> but it does have a tendency to increase the circulation of dollars. like more apples in the marketplace, and makes the apple less valuable? >> the amount of money in circulation is not really affected by this program, very slightly. money growth over the last year or two has been below normal. it is not a situation where the fed is pumping money into the economy. that is not what is happening. >> thank you very much for your appearance and forthright testimony here. we look forward to having you up for a meeting with the members as we try to craft a fiscal policy to get us back on track. >> i look forward to it. thank you, sir. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute]

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>> you have been watching federal reserve chairman ben bernanke and his economic forecast from earlier today. this is after the latest economic figures show that the unemployment rate in december fell to 9.4%. 103,000 jobs were added. we will show his testimony again in its entirety tonight at 8:00 p.m. eastern right here on c- span. >> aspect of c-span programming

first. we are joined by a relatively new colleague, a historian who produces a weekend programming block called american history tv. tell our audience about american history tv. guest: what booktv has done, american history tv hopes to do. a few features of our 48 programming -- 40 our programming but include american art affects where we take viewers behind the scenes to take something -- take the worst behind the scenes to see something they would not see. another new feature is lectures and history. we travel around the country to visit top american history professors. you can see a day in their class as they talk about their

expertise. it is like going back to college for a day. in addition to that, we have programming every weekend on various aspects of the presidency, and also the civil war as the nation begins to commemorate the 150th anniversary of the conflict. finally, we also search archives for historic newsreels and video, and a couple of examples recently -- we are coming up on the 50th anniversary of president eisenhower's farewell address, >> there is a lot of history programming on cable television. how will this effort be different? >> in keeping with our tradition, we give you long-form programming. we show you the entire class. we take you to historic speeches and sites. you get to experience them as if he were there yourself. it is open access and see it

just as we would. >> how do people see american history tv? >> we are on c-span 3 for 48 hours every weekend. unlike c-span that is an over 100 million homes, c-span 3 is in 41 million homes. if people are interested, they should get in touch with their cable or satellite company and tell them that they want american history tv and c-span 3. >> it is also streamed live on c-span.org >> the first weekend will be busy. we have a couple of live events at the american historical association in boston this weekend. we are covering a panel tomorrow on the 1980's and the reagan era. on sunday, there is a discussion on national security in the public's need to know.

those are live events in addition to the rest of our schedule. >> we have a lot of history buffs in our audience. i understand people can sign up for weekly alerts to know what is coming up programming wise. >> there are a number of ways to get in touch with us. there are e-mail alerts on the website at c-span.org/history receiving the e-mail alert means that you get our program schedule in advance, before the weekend coming up. in addition to that, you can also see our twitter icon to visit our page. >> this weekend on american history tv, live coverage of the american historical conference. the debate on 1980's america. on sunday, a roundtable on national security and the public's need to know as the black caucus marks its 40th

anniversary with charles rangel. learned about the history of u.s. currency. see the complete weekend schedule online at c- span.org/history have our schedules emailed to you. >> this weekend, robert kaplan on the gm-political enforcement of the indian ocean region. thomas daily on his experiences during the first months of the surge. porter is that as the price of every decision a person makes. many do not realize how it is a motivating factor in shaping their lives. sign up to get our schedules emailed directly to your in box with our book tv alerts. >> listen to historic supreme court cases on c-span radio.

on saturday, the court considers the definition of independent contractors, breach of contract, and racial discrimination. >> mr. mcdonald did not hold any rights on the use of contract between his company and dominoes. >> listened to the argument on c-span radio and nationwide and on-line. >> the utah republican joined us on "washington journal" this morning. the five-term congressman discussed a variety of issues including the transition in the house republican control, the repeal attempt for the health care law, budget issues, and the new rules package approved in the house. this is just about half an hour. -- thank you for telling us about of this morning. our final guest is rob bishop of utah.

he was part of the house republican incoming transition team. thank you for being here. i will start with big news from the defense department. as an armed services committee member, i am wondering what you are thinking about the proposed cuts and the fewer troops over the next five years? guest: it will be one of those things we will s secretary gates to justify -- secretary gates to justify. the only areas where congress has decided to cut in defense, we have significant issues with the infrastructure. when we are still flying tankers that were originally designed and built when i was in the first grade, we have the infrastructure problem. if he's going to pull their money out, we want to know where it is coming from the other problem, simply with what they're proposing, and this is why we want specific answers, is

that what you spend today does not impact the military prepared misstated. it intends what we could do 15 years from today, and what kind of diplomatic opportunities we have 15 years from today this is a long-range forecast. if we will look carefully at any cuts he suggests. host: we want to get to cause quickly. this is a short half-hour segment. we'll take your calls in a couple of minutes. i would like to have you explain the job-killing aspect of the health care law, which has been the strategy of taking it up first. jim mcgovern suggests we should focus on job creation. explain how this effect jobs. the guest: as i was flying out here, i was sitting next to a

good corporate citizen, and he was telling me that the health care would prohibit him from hiring more people. he may have to reduce the size of his employment staff. the mandates that come from this program to hit the private sector and job creation. host: on friday we always get the unemployment numbers. the atf is telling us and businesses are boasting higher income and the unemployment rate has fallen to 9.4%? guest: and see what happens when you put a republican leadership in the house? i hope it is not just a blip. host: we will begin with arkansas. william, a democrat climb. see, i wanted to ask -- caller:

i wanted to ask the congressman, you people make $173,000 a year, which is $3,220 a week. you're off five months out of the year. but you hear me? host: yes, we are listening. caller: you are off five months of the year, but still the only way president obama could get tax breaks for the middle class and the poor, he had to give tax breaks to millionaires. for 10 years they have these tax breaks, and no jobs were created. all of this debt was put in before obama got into office because you control everything for 12 years. explain that to me. guest: be careful calling me a millionaire. i am actually a school teacher with less disposable income now

that i had as a schoolteacher. the bottom line in these issues as the worst thing you can do in this economy is raise taxes on anyone. there were no tax breaks on anyone. all we were saying is we're not going to raise taxes on any one across the board. if you want to be fair, that is what we have to do. the other problem, when they were talking about the so-called ridge, that includes small business. that would hit over 90% of the small businesses in my district, and those are the people that higher. the tax increase was one of the worst things we could do, and all congress said was there will not be a tax increase. no one got a tax cut. host: a lot of coverage to the announcement of your

appointment. what do you want to do with that panel? guest: it is one of those things that is a regional issue. if you look at the map of where the public lands are, one-third of america is owned by the federal government. it is an amazing concept, but one half of the west is owned by the federal government. if you live east of denver, you do not know the fun of having a the government as an absentee landlord. if we want to bring some kind of order in which we could actually use the public land to develop the resources that there for people in the west. i am an old school teacher. if you want to fund education in the west, you have to develop their resources in the west. if you stop that, you are hurting education, kids, and our retirement.

host: how do you think environmentalist would feel about that? guest: the goal is to have multiple use. you can have conservation, recreation, and work that is done on those areas. the west is not a backdrop of a john wayne movie. it is real people who need real jobs, and you cannot cut them out. some arbitrary decisions have heard the west. we do not want that to happen again. host: just so people can get a sense, what percentage of utah's land is public land? guest: 70%, and in nevada, you are up to 90%. host:, mich., you are on. caller: i would like to know if you believe the republican party hasn't used the filibuster because they have used it quite a bit -- has of use the filibuster because they have

used it quite a bit. you did not think too much about being the senator. what do you think the senate's problem is with the 400 judicial nominations said have been blocked. that is causing a judicial crisis in the united states as reported on npr this morning. guest: the filibuster is only in the senate. when we had the majority, my party have the majority, i was very frustrated with the filibuster. when the other party had the majority, i found a different value in that. whether if you have a filibuster or not, its use and abuse has been traditional and cuts across time lines. historically, it does not been any different the last couple of years. however the senate wants to orchestrate their roles on the filibuster, that is their prerogative. to be honest, the second one?

host: judicial? guest: i find it frustrating there are holds on judicial nominations. but, that is traditional. and the past two years, they have increased of late, primarily, because of what is expanding in the courts in the kinds of opportunities -- decisions they make. you have found there is a greater emphasis on who the judges are. that means nominating a judges almost like a political campaign because the courts are expanding their reach. if you go back 30 years or 40 years tough you find that the courts are narrowing. there were fur -- few complaints. when a supreme court judge was

nominated, i think it took about 15 to 45 minutes. you contrast that with the day, things are much different. i think they are much different because the supreme court has expanded their scope of the kinds of things in which they rule. host: next is a call from california. maria is a republican. caller: good morning. i have a question to ask the rep. would you not agree that there were republican amendments added to the health-care bill? i also wanted to s q -- ask you, republicans said we were not creating jobs, so what are your specific ideas for creating jobs, and what is your specific

ideal for health in the health- care bill? host: thank you guest: the first answer is now. the second thing is that the worst thing you could do is increase the tax burden on small business. if you want to see health-care extensions, i would suggest you go into the last session and look at the bills that were introduced. in those three bills, you will see a litany of good ideas that would get a free market approach into the health-care system that would allow people to actually have control over their own choices. the only way you are going to drive the cost of health care down, which is a significant problem for all people, his by allowing people to have greater

access to joyce and options. we empower people, we move the country for. if we allow the government to tell people what is and what is not possible, we destroy the economy. historically, that is fairly accurate. host: one of the new rules is changing the concept of budgeting pay as you go to cut as you go. democrats had a press conference where senator chuck schumer talk about the cut as you coat concept. -- , as you go concept. >> the bottom line is they said the reason they came into power was to reduce the deficit. that is what they are claiming. they are not going along with it. we believe getting the economy going is important. we believe there are a lot of different values. our focus today is on deficit reduction. that is their mantra. whether you increase the deficit

by giving tax breaks or by spending more, it does not matter to the deficit goes up. host: response? guest: that is to spin, but it is not quite accurate. they go and you could either raise taxes or cut spending. their choice was to raise taxes. we are talking about going after the spending cut aspect, which is why cut-goal is there. it's as we will focus on cutting spending, not raising taxes. the pay-go system was further in its reach far more than its access. it was suspended repeated times. if we suspend cut-go, you have a right to criticize us. we are focusing on the problems of too much spending. that is why cut-ago is there, and why it is far superior to

pay-go. host: the role of the seven exemptions. guest: if we throw out exemptions the way the other party has, we should be criticized. for rep bishop, this is the independent line. caller: i think we could turn our economy around in six months. i think the president just has to announce that he is going to ever get all of the trade agreements, and the senate has to concur. this would be an enormous turnaround. we need to get economically independent. we have to stop all of the borrowing and the remarks before we touch anything on our country, and we have to protect our borders. i do not think it is republicans against democrats, it is global lists against nationalists. i like his opinion. -- i would like his opinion.

guest: there is merit to each of those. the trade agreements are one of the areas we need to look at. the last one, as far as the borders, you had one of the passions of mine. the border patrol is given almost free access to patrol the borders and do what they need on private property. the laws of the united states per head of the border patrol from having total access -- prohibit the border patrol from having total access on federal property, specifically of the southern border, which has become a prime area where people come in legally in to this country, not necessarily to better their lives, but as part of drug cartels, or union traffic compared there is also potential terrorists using these avenues. -- traffic. there is also potential

terrorists using these avenues. i want to allow border patrol to do their jobs on federal land. if you want to know why arizona is moving in this direction, it is because almost 51% of illegal entrants into this country is coming from arizona. it is almost all federal property. host: you guest: we need to focus on health care. obamacare does not. it does harm our economy. we need to come up with new ideas. i hope the house will be able to forward new and appropriate ideas to the senate. with the senate does is what the senate will do. host: this is a woman and nevada. she asks what the gop is planning for the infrastructure and where the money will come

from. guest: the infrastructure has to come from the dedicated funds. that is primarily the gas tax. one thing we're doing poorly with transportation funding is spending a lot of the gas tax money on things that have nothing to do with infrastructure. 20% of what we spend on infrastructure does not go to infrastructure and transportation. he goes to environmental reports, regulations, non-road construction concepts. i had with like to make sure that the tax money coming from that is focused on the actual building of infrastructure and not subsidiary concepts. host: the next call is from cleveland, a democrat. caller: why do the republicans not help with the infrastructure bill? gov. christie turned down money

that would have helped his state building the tunnel. you people are trying to stop him. the republicans never even tried to help anyone get health care, but you sit there and cry about it. why not tax companies that send jobs overseas? tax them higher than the ones that keep their companies here. thank you. guest: if you turn down money, that is good of him. is time that congress quit dangling money we do not have in front of states and then requiring states to fit the mandates we tie on the strings. a great study was done by daniel walker. he found that taxpayers and states in the paying more beat because of the federal mandates

-- end up paying more because of the federal mandates. if gov. christie did that, good on him. the concept of health care, i just gave you three bills we did introduce the or not allowed to be debated in committee or on the floor. they have great ideas. i want to see this come to the forefront. we need to empower people to make choices for themselves. the last one had something to do with taxes. i forgot the third one. host: we will go on to las vegas. don is a republican. you are on. caller: congressman, i would like to thank you for not complaining about what the democrats did at the hearing yesterday. i personally watched the hearing on tv. it was late at night. that is the first part. the second part is i am retired.

my fiancee is retired. before retirement, her program on the doctor's visits only had a $10 copiague -- co-pay. host: the point? caller: the urgent care service was zero co-pay. her new program came out. it is $25 co-pay for the doctor and $50 for urging care. if this program is so good, why are they always cutting benefits for retired people like myself and my fiance? guest: that is a good and decent question. it is one of the problems we face when the government becomes involved in setting the parameters for the kind of health care you get. i do not want to oversimplify the health care.

the bottom line is if you really want to see some kind of stability in the health care issue, it is not simply about what the mandates and requirements are. it is about the ability of people to make those decisions and choose for themselves. here is the bottom line. if you need plastic surgery, the cost has decreased year after year. it is cheaper now to get your nose fixed than ever before. that is primarily because it is not covered by insurance companies. you do not have to negotiate with the doctor. if we put those concepts into the overall health care system where you have control of your own health care dollars and did your own negotiating, if you would see the same kind of cost- cutting benefits taking place because there would be competition for your business. if you want long-term overall improvement in the cost of health care, we've got to let people be empowered to make their own decisions. otherwise, you will be in the situation you have described. he will have to accept what

someone else tells you will be the parameters and requirements. you will have no recourse to change that. you have no way of renegotiating the deal but is better for you. it is not easy to do, but it is in the direction we should be going. the democratic congress did not run that direction. it went in the opposite direction. host: people are asking for more details about the jobs number. here is the ap story. the nation's unemployment rate dropped to 9.4%, the lowest level in 19 months. that is because more people found jobs. more people gave up one job searches. the labor department says there was an improvement from the $71,000.

host: our producers downstairs did get the third question. it is about taxing companies that send jobs overseas. guest: i want to add one other thing about the business numbers. i hope we are improving. would be the ideal situation. we need to have a business climate in washington that encourages business. we have had an attitude coming out of washington that has been antagonistic towards business. the talk about raising taxes, increasing regulation, redefining their role. that does not give comfort to a business that wants to expand by hiring more people. the best thing congress can do is make sure we have a pro-

business attitude that gives businesses the future comfort level to do so. host: to you believe the appointment of the chief of staff signals a new direction? guest: i do not know. i am sorry. host: the next call is from florida, richard is an independent. caller: good morning. the election in november was a clear message from the people that sent the project obamas administration and health care plan and we want it repealed. the financial bill is more intrusive and destructive to business than anything that has come through congress in a long time.

we had representative mcgovern on. he kept talking about the congressional budget office and their reports. the first report from the cbo about the health care bill was that it would do three things. it would increase the cost of health care. it would not make health care readily available. the third one is it would not increase the quality of health care. the second one did not appease the obama administration. he called the head of the cbo. they had a discussion. in the next report, the cbo official said they did not have the correct numbers and would not give a report. the third time, they gave the report --

host: i am going to jump in. i understand your question is about the authority behind the cbo numbers. i have a similar tweet from someone here. talk about the validity of the congressional budget office numbers. guest: i do not want to criticize cdo terribly. it is difficult to calculate costs 10 years out. with health care, we did play some games. congress did play games. you take 10 years in come and six years of expenditures. the gentleman said a message was sent in the midterm election. that is one of the reasons why the transition team was combined. the goal was to force some things. we could increase and promote and expand the number of jobs. we need to make it easier to cut spending. that is why we're doing cut-go

instead of pay-go. we need to empower committees so that members of congress have more say in what is going on and a voice on the floor as well as the committees. time management was the key element. we need to return to the constitution and make sure that what we're doing in congress is what the constitution intended congress to do and not we have divined on our own whims. host: we are just about out of time. the caller also mentioned the new financial law. this is on the front page of "the boston globe" today. guest: this was a bill put together without a lot of committee input. amendments were not allowed on the floor. i do not know if repeal is the proper approach.

looking at that carefully and try to craft some changes would be extremely helpful and beneficial, especially as we talk about the business climate and being pro-business. host: the house of representatives is coming into session. we will say goodbye for now. >> this weekend, live coverage of the american historical conference. on saturday, a debate on 1980's america. on sunday, a roundtable on national security and the public's need to know. the congressional black caucus marks its 40th anniversary. an oral history with charles angel. see the complete weekend schedules online. you can also press that sees them alert button and have our schedules emailed to view.

>> i think news organizations have adapted. news organizations are doing more domestic news. the public bears some responsibility. the public bears the responsibility of keeping themselves informed. >> on sunday, the senior correspondent looks of the wars in iraq and afghanistan on a political, strategic, and personal level at 8:00 on c- span. >> listen to historic supreme court cases. on saturday, the court considers the definition of independent contractor and racial discrimination. >> mr. mcdonald did not hold rights under the contract between his company and dominoes. >> listened to the argument on c-span radio. you can listen nationwide and on-line.

>> good afternoon. welcome to the department of state. if you look back at 2010, one of the most compelling stories of the gear was the tragic earthquake in haiti just about one year ago. the international community mounted an enormous, sustained recovery effort in the aftermath

of the earthquake. we have two people here with us. the two of them have probably spent more time than anyone else in the government focused on the challenge that haiti represents in the aftermath of the earthquake. we thought it was good to bring them out for an update on where we stand and the way forward. >> good afternoon. i want to thank you all and many others to cover 80. one thing i think everyone always assumed about haiti was that it would not be an enduring story of interest and an enduring opportunity to support others. one thing the media has done a good job of is continuing to

stay focused on the job that needs to be done in haiti. the job is still enormous. the role that you and others have played has been critical. what happened in haiti is more than we could imagine any given time. the people in haiti have lives that are a new normal. the a family that is no longer with them. across the government, we also lost those we love and support in haiti. i want to acknowledge the very human tragedy that the earthquake and the toll took on so many people, most notably the haitian community. i think one of the reasons why haiti is such an enduring power is that it has the ability to transcend challenges. if you think about where haiti started even before the earthquake, you had a country where 80% of the people were

living on less than $2 a day. the unemployment rate was more than 7%. 50% of the young people and children were not in school. less than 12% have access to electricity. you started in a fundamentally challenge place. haiti has always captivated the imagination, the community, and the connections built through the diaspore. when we think about what the earthquake did in terms of the toll it took on human lives and injuring thousands, we think about what it means to strike a part of the capital in terms of losing public servants and the facilities that they work in each day. it also created the loss of an opportunity for people to gather in a normal place, their homes. more than 1.5 million people lost their homes.

we began in an almost unimaginable place. i want to speak about the leadership that usaid was able to provide it with respect to how we were a partner to haiti in its most trying hour of need and what was actually accomplished. we'd still have a lot of other challenges that are still there. i will builthen answer question. we still have 1 million people in tents. we still have 900 million cubic meters of rubble to remove. we have removed almost 2 million meters. there can be note rebuilding without the removal of significant amounts of rubble. there is also the need for jobs,

the enduring need for jobs. the employment rate is still what it is. multi-lateral donors and others will be good partners in growing jobs and providing economic growth. there are a number of things where we can see progress. there are many things where we will need more progress. that will be the challenge for the next year or two. progress happens over time. haiti's needs our committee. that may be with cholera, transitional housing, jobs. those needs are immediate. we have been taking steps to meet the immediate needs while planning for the long term. i hope we can engage in some questions in a way that helps to inform the riding of you are doing arewriting you are doing

and what the people of haiti hope will happen for their country. >> thank you to all of you here taking an interest in helping to support and provide visibility to many of the successes and ongoing challenges that exist today on behalf of the people of haiti. it is important to recall that approximately one year ago, we had a tremendous earthquake. it represented one of the greatest humanitarian challenge as we have ever faced. in light of that humanitarian challenge with several hundred thousand people losing their lives and 28 government ministries being destroyed, the president and secretary asked the united states to mount a swift and aggressive response that would meet the needs of the moment.

i want to thank the thousands of military service members and civilian service members that took on that responsibility. they went to haiti and worked to help the haitian people recover from this in measurable tragedy. that effectively represented the largest humanitarian effort ever mounted with the food distribution that reached 3.5 million people at its peak. nearly 2 million metric tons of rubble were removed. it rivaled what we saw in the years after the tragedy in indonesia. a number of things took place immediately following the earthquake with a large global response that did live up to the president's commitment for a

swift, aggressive, and coordinated efforts. we also took great pains over the course of the year to work in partnership with the government of haiti to avert further disasters. the amount of preparation and effort that went into protecting the drainage system, to protect against floods and impending hurricanes, and the rainy seasons was very important. the efforts to invest in agriculture where we were working with the government of haiti in doubling agricultural a port -- output was very important in helping the system get back on track to provide for its own people. the effort to provide clean water and immunizations were very important in making sure that disease outbreaks were prevented and precluded. as we look at the epidemiology of the cholera outbreak, the areas that got the most

effective humanitarian response are the area's relatively protected. the success of the overall recovery and reconstruction effort will depend on both of the partnerships with the government, people, and institutions of haiti and our collective will and commitment to see the effort through. in that spirit, we have taken a number of steps to put in place the innovation in how we work to make sure we're capturing the opportunities of the moment even in a difficult environment. i will share two examples. we have invested with private foundations to bring mobile financial transactions to the people of haiti. we're seeing real progress in that area. we will be able to talk more about that in the next few days. as we have been pursuing reconstruction efforts on housing in terms of diagnosing

and preparing homes damaged, we have put in place many of the principles of our procurement efforts that are geared towards supporting local institutions and companies to develop improved standards and be part of the reconstruction effort. that will create some of the jobs that she referenced and a more vibrant local economy that is capable of sustaining the recovery effort. we have examples that keep us hopeful. we also know the road forward will be challenging. we remain committed to the principles we outlined at the beginning of the response. we will be good partners with the people and government of haiti. we will prioritize efforts to build local capacity and institutions. we will continue to focus on this effort over the long term. we know that is the most appropriate embodiment of the relationship we have with the

people of haiti. i thank you and look forward to some questions. >> i was in haiti just after the earthquake for 13 days. i am still in touch with some of the mayor's. how is the u.s. supporting the u.n. food program? >> the united states has had a broad range of programs that have supported food for work and cash for work. that is both in the early days of the recovery and in the current, ongoing way. i do not have details about the current level of support for the u.n. specific program. in the early efforts, most of the cash for work and food for

work programs employing haitians to do rubble or removal and transition efforts were provided through u.s. government grants and commitments with asian partners and ngo's. partners andian ngo's/ >> if you were traveling in haiti, he would understand the challenges are significant. i do not think it is a rosy picture. i do think it is a hopeful picture. a lot needs to be done. we should be cognizant of that. it is important we are honoring and appreciating the reality that most haitians get up to every day. it is a challenging one. >> i was looking at the slides.

they were very rosy. the picture is not rosy according to the mayors. the first few weeks near the airport and around the center of the city. when you drive five or 6 miles out of the city, it was flat. near the airport, you had the pictures being shown to the world. there was the u.s. intent. behind those tents were really horrible conditions people were living in. have they improved? i have heard that not much ha s been done. >> it is absolutely true that the early response was focused on the airport and other major trunk lines of communication and transportation.

there was so much rubble and uncertainty and so little logistics capability that the u.s. military working with our partners had to create a logistics system that allowed the different countries to get their resources from field offices into the country and distributed appropriately. that was part of the early response, absolutely. if you look at how that played out over time, the response clearly went well beyond the immediate area around the airport into areas beyond port- au-prince. the effort around help services -- help services -- health services demonstrates the commitment has been throughout the country and not just port- au-prince.

>> are weak --? >> this is kind of a broad question. you mentioned that before the earthquake, haiti was in bad shape. is there any overall kind of ballpark figure on how long it will take to get haiti even back to the condition it was in before the earthquake? >> from my perspective, there are two things i would say. everybody's goal is to build back better. i think haiti is building a new. it presented a different opportunity to build a new. i have a tendency to be relatively impatient. i like to see things happen faster than is realistic. one thing that has been helpful to me in thinking what is rational and real is looking at

how long it took to rebuild in other areas and when they started to see the buildings go up and the programs implemented to see transformation. in the end, you have something that is sustainable that the government could maintain. that process is a three to five- year process. the real challenge is you have to live in that in-between time. the real question is what should be done in year one or un five that will make lives livable. we have a unique obligation in haiti to figure out how to address the rubble and housing issue. it is hard to live in those places without those things getting aggressively better. the other thing that has to get

aggressively better all over the world is that people need jobs. how do you create jobs or the opportunity for private investors to create meaningful increases in jobs? that is transformational. we have to be able to address those in a fundamental way. otherwise, what ever we seek long-term will not help people get there. it should be consistent with what we all embrace as tolerable. >> the government of haiti, what is its capacity right now question it is a broad question. are they functioning? 28 ministries were destroyed. is there a functioning government? >> yes, there is a functioning government. here is the challenge for the

government with the earthquake, hurricane, and cholera. they are faced with challenges the average government is not facing. they start out anymore challenge capacity. they are starting out a place that is a lot harder to confront the challenges they have been blessed unfortunately with. the other challenge is they are also getting ready to go through an enormous amount of political transition. for haiti, that is always a bit of a challenge. they will go from a sitting president to a new one. how they get there is always a challenge in haiti. that is a process we want to support in a way that insures the people of haiti get the leadership they voted for and the kind of leadership they need in the future. that is going to be a challenge as well.

>> i will add that if you look at water sanitation, and hygiene, transport and logistics, the use of mobile connectivity, and agricultural performance that 70% of the haitian people depend on, you have performance that has a faster recovery than most international standards. if you look at rubble and housing, that has been slower but still on track with international standards. we all want to do much better. the economic and government capacity are the most important and enduring, but they will take the longest time to fully develop to get to a place where you are providing the type of resilience the economy will need over time.

we are looking at that. our commitment to all of these aspects continues to be as strong as it was the moment after the earthquake. >> i wanted to ask an election- related question. a number of haitian-americans told the vice-president they do not want the results of the november election to be carried through. what do you plan to do if the preliminary results should be honored? and you talk about the concerns about the continuing election problems erasing some of the fragile progress that has been made? >> i think you are speaking about the commission that is doing the review right now, the results of which are anticipated to be revealed shortly.

we wanted to ensure that there was a review and that the results were consistent with haitihe people of wanted. we are eager to see what the results will be. we expressed our frustration with the results right after the election because it was inconsistent with the information we have been privy to. i am obviously not going to address the hypothetical of what would happen if the issues remained inconsistent one way or the other. we are committed to ensuring that the voice of the people of haiti is respected, and their vote, and that we create whatever is the appropriate partnership to ensure that that occurs. >> william discuss cancellation of elections, and the -- -- will

you discuss cancellation of elections and a redo? >> if any of those things are steps that need to be considered, we would be interested in how they came to those conclusions, of whether the conclusions were once we could support, and what indeed that would mean in terms of what is appropriate for us, whether that is engagement or other results. i would not be able to tell you what we would do. obviously until we know what they conclude and how they concluded, we are not in a position to be able to tell you that. >> will you support the extension of office of the president if no new president is declared? >> of this is really going to play out in the next week or so. the results will actually help shape whether or not, and on

what timeline, there can be a transition of government. i cannot comment on that until i see what they actually recommend. >> one more concern, which is a concern for most officials in port-au-prince. if you have one camp that the local people gathered around and there is no, the other cities -- even when i drove through, there is hardly anything. have you got a program to go beyond? >> thank you for asking that. people will believe i asked you to ask that, and i did not. [laughter] we actually have quarters that

we are focused on making significant investments in. we're going through the strategy in terms of where we are going to make investments. part of what we have provided to congress as well as outlined as our objectives is to go through a process that not only looks at how we can go about providing housing in the north, what we can do to support the parks. we of been working with foreign investors about how we could attract them to industrial parks. we also want to provide a electrification in support of the activities and in support of creating greater access. that is something else we articulated that went to the congress. we are focused on the north. there is also all of the agriculture in the north that we are interested in helping to support. in particular, there are export crops up there, mangoes and krakococao.

when you are sitting and planning, it looks like nothing is going on, but i would also love for you to ask that question again on tuesday. [laughter] >> there has been some criticism of irhc. is there a plan afloat or are you looking at ways of improving it? >> i would encourage people to look and how long it took four a similar commission took for a similar commission to be setup. i think the irhc has actually provided something to donors that is less tangible but very

impact will. we all looked at that as an opportunity to ensure that haitian plans got implemented the way they wanted. it also provided an opportunity for the kind of collaboration and cooperation that should happen. what it has really done too is provide an enormous amount of transparency among us as donors that have allowed whole new levels of collaboration to occur because you now know what canada is doing or what venezuela is doing. you know what new zealand is doing. that means the partnerships have been achieved that have never been part of the partnerships in the past. certainly, our partnership with the french in rebuilding the general hospital is not one we had a history of. i could go through the projects as well as the investments that are going to be made because of the irhc. it has also created a unique platform for the private sector to participate.

from my perspective, i think there are legitimate concerns about how fast they were able to move, how fast they got staff up, but the reality is what has actually been achieved because of it and what it has facilitated among the international communities, but organization, effectiveness -- both organization and effectiveness, to me is invaluable. they canceled a meeting in order to have it as a telephone call, and everybody from norway, to france, to japan, thought it was a horrible thing to have done. how could we not all be getting together to address the challenges that were there? that spoke to a level of collaboration we do not usually have. normally, we would each be doing our own thing. >> they have been very helpful

in the planning and in taking this forward in a collaborative way. there are significant activities that have been ongoing in agriculture, housing and the provision of shelter that are making the pit from immediate recovery to long-term reconstruction. some -- making it the -- making the pit from immediate recovery -- pivot from immediate recovery to long-term reconstruction. hopefully, that will continue in a much broader way in 2011. being able to provide transitional shelters and review 400,000 damaged units to identify which ones can be reconstructed and building a small-scale industry that can reconstruct them back to standard will set the stage for

a much more rapid, much more effective shelter strategy through the coming years. a lot of what has happened is real activity to set the stage. >> are you a part of the presidential delegation that went to india in november? can you give us a sense of the steps you are taking now? >> that was a very exciting program we were able to launch as part of our effort to address under and poverty around the world. one of the unique attributes of that program was to recognize that india and indian partners, innovators in technology, agricultural convention an agricultural science, had a lot to offer to other parts of the world like sub-saharan africa and parts of asia. as a result of that, we are

working with the government of india to bring the benefits of those programs to other parts of the world. what was unique about that effort was that it was both president and the prime minister making an effort to focus on improving cultural performance and their property -- and therefore poverty and homelessness reduction in india. those types of efforts can make a big difference. that has been our focus on the follow-up. did the u.s. aid -- >> did usa change its strategy -- usaid change its strategy in

afghanistan? >> we have gone through a pretty significant transition from the civilian assistance to be highly coordinated with the military campaign and military effort. as, over time, the transition occurs, we are supporting far more than providing health and education services and helping the government stand up in some capacity to provide services. that will continue in a strong and continued way. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> president obama today introduced a new economic adviser. he will move over from the treasury department. the president spoke at a wind as manufacturing plant in maryland today. we will have that -- windows

manufacturing plant in maryland today. we will have that for you at 8:00 p.m. eastern. gene sperling has been a national economic council director. he is currently counselor to treasury secretary timothy geithner. in that role, he is a leave policy advisor on fiscal issues including job creation and small-business issues. he graduated from the university of minnesota and yale law school. continuing with economic programming, at 8:30 p.m., we will have ben bernanke and his latest economic forecast. he testified today before the senate budget committee. look for that tonight on c-span. >> this weekend on american

history tv, live coverage of the american historical conference. sunday, a round table on national security and the public's need to know. the congressional black caucus marks its 40th anniversary. charles rangel offers an oral history on his political career. from the bureau of engraving and printing, learn the history of u.s. currency. see the complete schedule online at c-span.org. you can also have our schedules e-mail to you. >> this weekend on book tv, robert kaplan on the geopolitical importance of the indian ocean region. thomas daily on his experience during the first months of the surge. hand on afterwards, there is a price on every decision a person makes. most do not realize how much it is a motivating factor in

shaping their lives. find the complete schedule at booktv.org. >> listen to historic supreme court cases on c-span radio. saturday, the court considers the definition of independent contractor, breach of contract and racial discrimination. >> he did not hold any rights under the contract between his company and dominoes. >> listen to the argument on c- span radio. nationwide on ex-im channel 132, and online. >> today in the house, members began work on the debate rules to repeal the health care law passed less march -- passed last march. the vote is scheduled to take place wednesday. it seven hours of debate will

start on tuesday. from the house floor, this is one hour and 15 minutes. a great honor for me for the first time in four years to say that for the purpose of debate only i yield the customary 30 minutes to my very good friend and rules committee colleague, the the gentlelady from rochester, new york, ms. slaughter. pending which i yield myself such time as i may consume. i ask unanimous consent to revise and extend. the speaker pro tempore: without objection, so ordered. mr. dreier: during consideration of this resolution, all time yielded is for the purpose of debate only. madam speaker, i ask unanimous consent to rise and extend which i have done. and i ask all members have five lemming days to revise and extend their remarks. the speaker pro tempore: without objection. mr. dreier: madam speaker, house resolution 26 provides for a closed rule for consideration of h.r. 2 and self-executes an amendment by the majority leader which is required under the statutory pay-as-you-go act of 2010. this is routinely required and is similar to many provisions

that have been self-executed since the enactment of statutory pay-go. the resolution provides for seven hours of debate on h.r. 2, equally and controlled by the chair and ranking member of six committees and the majority leader and minority leader. it also provides the minority a motion to recommit, h.r. 2, with or without instructions. house resolution 26 provides for consideration of h.res. 9, under a structured rule, that provides an hour of debate and makes in order an amendment if offered by representative matheson of utah. it also provides for one motion to recommit h.res. 9 without instructions. lastly, the rule provides for the consideration of a resolution if offered by the majority leader or his designee relating to the status of certain actions taken by members-elect under a closed rule. madam speaker, it was just before midnight that my great new colleague, and i were here in this chamber and filed this

rule following a lengthy 12-hour hearing upstairs in the rules committee. i have to say that there were many, many discussions that took place on a wide range of issues. i think it's very important for us to note that there were those who argued that we should not be taking up this issue because of the fact that we should be focusing on job creation and economic growth. madam speaker, we know that the overwhelming message that came from the american people is that we have to get our economy back on track. we have to create jobs. we have to make sure that those people who are struggling to get under the first rung of the economic ladder are able to do just that. and that's why when we look at a $2.7 trillion expansion of the federal government, $2.7 trillion in new spending, we

recognize something that is common sense and that is if you're going to expand the size and scope and reach of the federal government by that magnitude, it clearly is going to kill the effort to create jobs and get our economy back on track. so that's why today, madam speaker, we are taking the first step in fulfilling a key promise that we have made to the american people. with this rule we are setting in motion an effort to repeal president obama's job-killing health care bill and replace it with real solutions. i underscore that again because all the attention is focused on the fact that we are going to be trying to kill good provisions that are out there. madam speaker, we want to start with a clean slate. we are going to repeal president obama's job-killing health care bill and replace it with real solutions. this rule takes two important

steps. the first is to allow for consideration of a bill to hit the reset button, so to speak, on the very damaging legislation that was passed last year under the guise of health care reform. the second is a resolution directing each of the committees of jurisdiction to craft responsible, effective, and economically viable health care solutions. madam speaker, the resolution lays out very clearly what real reform looks like. real reform will help not hinder in our goal towards creating jobs. real reform will lower health care premiums by enhancing competition and patient choice. it will preserve the right of patients to keep their existing coverage. if they so choose. it will ensure access to quality care for those suffering from pre-existing conditions. it will implement meaningful lawsuit abuse reform so that

resources can go to patients and doctors. and not to trial lawyers. in short, it will increase access to health care for all americans without compromising quality or hurting the very important small business sector of our nation's economy. madam speaker, the underlying re place resolution which i have offered will begin a robust committee process to tackle the difficult but essential work of achieving these goals and crafting true reform for the american people. this will be a process in which each and every member, each and every member, democrat and republican alike, will have an opportunity to participate. madam speaker, as speaker boehner said, the day before yesterday when he accepted the gavel, we are returning to regular order. once again our committees will be the laboratories, the centers of expertise, that they were

intended to be. rank-and-file members of both parties will play an active role in crafting legislation, scrutinizing proposals, offering amendments, participating in real debate. critical legislation is not going to be written behind closed doors by a select few. today's rule sets in motion a process that will be both transparent and collaborative. but we cannot get to that very important step without clearing the first hurdle. which is to undo the damage that has already been done. we will hear people say, why are you considering this under a closed rule? madam speaker, this was a clear promise that was made throughout last year leading up to the very important november 2 election. everyone acknowledges the elections have consequences. the commitment was made that we would have an up or down vote on repeal. and that's exactly what we are doing.

we must repeal last year's bill before we proceed with replacement. just as prekicted -- predicted, the so-called reform bill is having very real negative consequences for our economy and our job market. it is putting enormous burdens on job creators, particularly small businesses, at a time that is already one of the most difficult we have faced. imposing significant new burdens and penalties, while our employment rate remains above 9%. we got the news a few minutes ago it's at 9.3%. we are encouraged by that positive drop but only 105,000 jobs were created, not the 150,000 jobs necessary to be created to sustain the position we are in right now. so we still are dealing with very, very serious economic challenges. and that's why we need to take a commonsense approach to first

repeal this measure and then deal with solutions. above all, i will say that the onerous, unworkable mandates that have been imposed are adding greater uncertainty which are job creation's biggest enemy. anyone who has spent any time talking with small business owners knows this to be the case. while the economic impact is already quite apparent, the fiscal consequences are looming down the road. while the bill's authors used a host of accounting gimmicks, i'm going to get into those further as i'm sure i will be challenged on this and i look forward to talking about the accounting gimmicks that have been utilized, by the authors used a host of accounting gimmicks, as i said, to mask the true cost of this measure, and honest and realistic assessment of the impact on the deficit shows a much clearer and tragically a far worse picture. the budget committee has

demonstrated the real cost of the health care bill, as i said, in my open, a staggering $2.7 trillion. once it is fully implemented. it will add over $700 billion to our deficit in the first 10 years. the words reckless and unsustainable hardly begin to cover it. this bill is an economic and fiscal disaster of unprecedented proportions. the time to undo it before anymore damage is done is quickly running out. republicans promised the american people we would act swiftly and decisively, and that's exactly what we are doing. some of my friends on the other side of the aisle have asked, why there will be no amendments to the repeal bill? frankly, there is nothing to amendment. there is nothing to amend, madam speaker, the repeal bill. either we are going to wipe the

slate clean and start fresh or we are not. that's not to say there aren't some good provisions in this measure. that is so onerous, nearly 3,000 pages, that we believe that the best way to do this is to wipe the slate clean, have an open and transparent process, and do everything we can to ensure that every single american has access to quality health care and health care insurance. now, once that slate is completely wiped clean, we will be ready for this open and collaborative process to develop the real solutions that we have talked about. that's what we promised the american people as we led up to last november 2, and that's exactly what we will deliver here today. madam speaker, first we undo the damage, then we work together to implement real reform and real

solutions. i urge my colleagues to support this rule and then, after we have gone through the three-day layover requirement next week, which is in compliance with another promise that we made to the american people, i urge my colleagues to support the underlying legislation, h.r. 2, which our colleague, the new majority leader, mr. cantor has offered, and h.res. 9, which i have introduced, that calls for our committees to work in a bipartisan way to develop solutions to the challenges that we have out there in ensuring that every american has access to quality health care. with that i reserve the balance of my time. . the speaker pro tempore: the gentleman from california reserves the balance of his time. the gentlelady from new york. ms. slaughter: good morning, madam speaker. i appreciate my gentleman friend, mr. dreier, for yielding me time and i yield back the balance of my time. the speaker pro tempore: the

gentlelady is recognized. ms. slaughter: what a week it's been. since we've been sworn in, the republican broken promises have been dizzying. one summed up the week up nicely when he said, quote, i don't think it would be possible to fall from grace any faster than this end quote. in november, the republican leadership, led by speaker boehner, traveled to suburban virginia and made a pledge to america. their constituents, including tea party patriots, like mr. mecker, listened intently as the republican party pledged to be fiscally responsible and serve the will of the american people. on page 6 of the republican pledge to america, the party states, and i quote, with commonsense exceptions for seniors, veterans and our troops, we will roll back government spending to prestimulus, prebailout levels saving us at least $100 billion in the first year alone and putting us on a path to balance

the budget and pay down the debt, end quote. the pledge was solemnly made by republican leadership despite being largely panned as a political stunt. despite following through on their pledge, the republican majority said the pledge to cut $100 billion was hypothetical. today now we're moving forward to do the exact opposite of the actions that they pledged as they introduce legislation to repeal the affordable care act. if successful, the republican legislation will add $230 billion to the deficit by 2021. this extra $230 billion won't be spent rebuilding our crumbling infrastructure, teaching our children or providing for the millions without jobs. instead, the $230 billion will be added to our deficit in order to take health care benefits and protections from those who need them the most.

for example, starting this year the affordable health care act will begin to close the doughnut hole for seniors. under the law medicare beneficiaries who fall in the doughnut hole will be eligible for a 50% discount on covered brand-name prescription drugs. repeal this law and seniors receive no help and will be forced to pay their rising costs alone. those are the types of protections i fight for today. fiscally, members of congress pace a $300 billion choice. according to the congressional budget office, we have two options. one, do we keep the affordable health care act and save $130 billion by 2021 or, two, do we repeal the affordable health care act and add $200 billion to our deficit by 2021? that may be trouble for some but for most of us it's easy. for me the answer is clear and

i assume to most americans it's clear as well. because they can't win by simply judging apples to apples, the republican discrediting the congressional budget office. yet, a quit bit of research will reveal that republicans have long valued the nonpartisan and reliable work of the congressional budget office and have publicly supported the agency before. in fact, 2009, speaker boehner repeatedly referred to the c.b.o. as nonpartisan institution and relied on their estimates to argue against the affordable care act at the time. but now that the c.b.o.'s estimates are detrimental to their political goals, they have taken to questioning the work. republican senator john cornyn said it's inconvenient. two years ago he said, i quote, i believe the professionals at the c.b.o. are doing a difficult but unpopular work. they are speaking the truth to