and coming up this hour, we will talk about chinese president hu jin tao's visit . we will also talk about medicare/a social security costs and republican efforts to reduce the federal budget. later, we'll talk about federal lobbying laws. this is "washington journal." ♪ host: the chinese president arrives today in washington for a four day visit. the chinese president that has ruled the country since 2003 and will do so for two more years is expected to have two dinners with president obama. the first will be an intimate meal at the white house.

wednesday it will be a grand state dinner. a joint news conference with the president, as well as chats on capitol hill with democrats and republicans. we will have coverage on c- span.org. your thoughts this morning -- u.s.-china relations, good or bad? we will start with "usa today" and their story about this.

host: on the docket for things to talk about between the two presidents -- this is from "usa today." north korea, iran

host: given all of that, what do you think? u.s.-china relations? good or bad? we want to get your thoughts and comments on this question this morning. this is from the front page of "the washington times." this is a quote from a wisconsin firm.

host: first phone call on this.

mike, republican. go ahead. caller: the business relationship between u.s. and china is tedious at best. i am not one that would normally agree with the democrats, but i think these businesses need to get a better deal. the flip side of that argument is the military relationship and the fact that china is attempting to do essentially what the united states did it in the early 1940's, building their military industrial complex. china is doing that and it is doing that through the devaluation of their own currency, making king's cheaper. as will be pointed out by multiple callers this morning. the only other thing i would offer is that at some point the united states diplomatic corps needs to be bluntly honest with

the chinese government as to how the relationship passed to exist. as ronald reagan said, "trust and the verify." id work with it the soc -- the soviets. it will have to work with china. host: the white house has prepared for the visit in other ways in the past few weeks. this is from "the new york times." host: friday, the hillary clinton publicly criticized the chinese human rights record. she also talked about the military relationship.

what did you make of that? caller: the issue of human rights has been ongoing. not just with china, but with other countries in the u.s. as well. the military side of her comments -- i believe that i was watching c-span about one week ago. there was a discussion on the military to military aspect that was sorely lacking. i believe it was the secretary of defense that alluded to the fact that they needed to have in times of crisis a direct military to military contact. that does not exist at the moment. china has ruffled swards with international treaty obligations miles off the coast. they do not want military maneuvers going on. that is international waters.

direct military to military contacts between the leadership is necessary. host: let's listen to what secretary of state hillary clinton had to say. >> i would be the first to admit that this trust -- distrust lingers on both sides. we have watched china's efforts to modernize and expand its military. we have sought clarity as to their intentions. as secretary gates stressed, both sides would benefit from substantive military to military engagement and increases transparency. we need more high-level business, joint exercises, exchanges from professional military organizations to build the trust and understanding of intentions. this would require china to

overcome its reluctance -- in building intense military relationships. we think it is in both of our interests and we will continue to work on that with our chinese friends. host: on your screen is a list of countries by military expenditures. that topped no. is what the u.s. spends, $663 billion. compared to china, $98 billion. north carolina, you are on the air. caller: the u.s. has lost manufacturing because of the taxes paid to the state. there is no way that the state can replace the money on manufacturing spent. both are electric grids, roads, to thebills the state pay cities. that can only be increased by

property taxes and it will not work. host: frazier park, california. go ahead, frank. caller: this is really good for the 1% of americans that like to make widgets rather than paying for their work rather than people that get to unionize. it has been really good for them. for the other working americans, i think that our relationship with china has been devastating. and it has not really benefited the working people of china. again, the chinese system morphed into this combination of totalitarian states that treat

their people in an egregious manner, basically threatening the national security of our nation. at the same time, we have this laissez-faire capitalism going on at the same time. it is a frankenstein that is difficult for a democracy such as ours. you cannot exploit the people. awful things that happen to the people. host: going back your comments about the economic relationship, what would make it better? caller: first would be the recognition that they are manipulating the currency in such a manner. i am all for fair trade, but

judiciary policy for the nation -- what i am saying is that we do not get to compete in china on an open playing field. caterpillar, we cannot make those here in the united states and shipped them over there. china insists that they are made their and that they acquire the intellectual property. here is another thing -- why do we have to have those dangerous products coming over here? japan does this -- make china build a huge facilities before they ship their products over here. host: you and others might be interested in this piece from mark wu, an assistant professor at harvard.

host: kentucky, like, democratic line. your thoughts on this this morning? caller: the other caller was talking about our manufacturing base. it has been hammered. we cannot compete with chinese

slave labor. plus their environmental standards and things of that nature. until we get fair trade, we will be on the losing end. host: michigan, was lee, republican. good morning. caller: [unintelligible] host: we will move on to the ontario, diane, independent line. caller: good morning. it amazes me how ignorant of americans have been over these last couple of decades. trading with china, but the idea is that we have to purchase chinese products. that money will never come back. but what to make 1 billion people in china rich enough to buy products. they really do not care about americans anymore. it is disgusting because the

chinese are communist. they do not have the freedoms that we have. they used to kill their baby daughters. possibly they still do. getting all of these people run around with little red books, deciding to be chinese and killing others to make them communist. host: the issue for you is that there are communist? caller: and that we are forced to purchase their products. that money will not come back here. host: do you purchase chinese products? caller: i have purchased nothing. i purchase as little as possible because i do not want my dollar in their pocket and i would rather go without. host: would you compare u.s. products against chinese products? do you find that there is a noticeable difference?

people say you have to pay more for products in the united -- made in the united states. caller: i am saying that you are forced to purchase chinese because there are not enough american products left. host: in 2009 -- let's take a look at the data -- host: fort lauderdale, florida. ron, a democrat. caller: the gentleman that talked about caterpillar, that is a perfect example. caterpillar should have told them no. if you want to purchase them, purchase them from us here.

china is a tough negotiator. what they do is they stand their ground. they forgot about world war ii and how we protected them -- against the japanese. they forgot all about that. and in korea they did what they did. china has forced their labor elm and everything is so much cheaper. i will pay more to buy whatever is made in this country if i can find it. i do not buy anything from china. host: look for our prime-time coverage of the state dinner tomorrow night c-span.org. here is the article from "the washington times."

host: "the baltimore sun" has a little bit of history for you about state dinners. host: raleigh, n.c., tom, independent line. caller: you guys are great, c- span. i am hearing the same recurring themes. not being able to do business in china. manufacturers moving overseas. when i see china, i see a

communist country that has no discernible rights when it comes to the environment. people have no rights. they abused their people to make money for the state. if i am china and i want to grow my country, the first thing that would do is take advantage of countries that worship the dollars for capital and say -- i can compete. i have no barriers in my country. i do not care about intellectual property. and then i could dictate terms. which is exactly what they are doing. what i do not understand is why they have allowed this to happen and why they continue to write more policies that will bring us more. if we are going to compete with the rest of the world, we cannot compete against countries like us said, where human-rights --

where they do not care about educating people. host: what is the biggest and most important thing in your opinion that the president can do in this visit, or that the congress can do for federal relations for the u.s.. caller: you are talking about a communist country that does not care. in my thinking there's not anything that we can do until we address the fundamental differences between us. until they value human life and the lives of their own people, i do not see what we can do. host: this is the front page of "the financial times" this morning. host: claremont, florida. u.s.-china relations, good or

bad? caller: i believe they are bad. host: why is that, stan? caller: i was working about eight years ago -- i was working in binghamton, new york. this is what happened. they took us to a warehouse. see, just because it has u.s. on it does not mean that it is made in u.s.. my job at this warehouse was to switch the label from china and put u.s. on it. i do know who it was run by, but they told us to keep our mouths shut or it would not have a job the next day. host: tallahassee, florida. good morning. caller: good morning.

give me two seconds. i wanted to be something i found in the newspaper -- found something they would not find in the newspaper. ezekiel, chapter 23. i will deliver thee into the criminal nation. look around. into the hands of them that you have baited yourself on. this is what i wanted to get to. and they shall deal with that hatefully and leave you naked and bare because they had turned away from god's word to worship other things. this is america's problem. ain't got nothing to do with nothing. china, this and this, but by

turning away from god this is america's problem. host: all right. a couple of other editorials this morning. other newspapers weighing in. this is from "the washington post." "shifting on china." this is from "the financial times." "china and the u.s. add up to a ."sitive somum from "the new york times" -- host: there is also "the wall street journal" this morning with their editorial.

green bay, wisconsin. independent line. good morning. caller: what i think that we should move to is a direct investment for all manufactured products. if china wants us to sell its products -- our products there, they should move their manufacturing here under our laws and stipulations. if our manufacturing companies want to sell in china, i think that they should invest in plants and equipment to manufacture the products in china. that is what we should move to instead of what we have right now. host: akron, ohio. democratic line. caller: good morning. how are you? host: duwel. caller: i am calling to say that

it is time for america to wake up. we have been duped. we have been had. i want to give some history and china. the first president to go over to deal with china was nixon. the first ambassador to china was george w. bush. everyone knows that that is a communist country. they do not believe in god. they worship the dragon. anyone who reads the bible -- who is the dragon? sagan. why are we in bed with satan? host: this is from the editorial pages of "the wall street journal."

host: yesterday "the washington post" had an interview with the chinese president in the form of written questions. one of the questions put forth was -- what will be the u.s. dollar's future role in the world? "the current international

currency system is a product of the past" is what the chinese president said. "it is used in host: that is what the chinese president had to say to "the washington post." we will keep taking your comments this morning. first, joining us on the phone this morning is billy house from "the national journal." what will happen today and the rest of the week in the house? caller: is a busy weekend it will be a real test for this new civility they said they want to have in congress. the vote will occur tomorrow on the republican plan to repeal

president obama's health care law. that will certainly spark some back and forth, including a 1:00 hearing by democrats to talk about what that would do to the parents of young children, small-business owners, and others. host: that will be chaired by nancy pelosi, live coverage at 1:00 p.m. on c-span t2. but this is say that the leader of the democrats is chairing that? caller: that they are more focused on that part of today's activities, underscoring her own desire to say that we might be in the minority right now, but we will not sit on the isle. host: the house is likely to vote on wednesday on this repeal of the health care law. are they likely to win the vote?

caller: they will win the vote in the house, but the senate has more or less refused to pick up the bill, and president obama would likely veto the bill even if they did take it out. what this does say is the republicans have fulfill their campaign commitment and it sets up a second tier process where they will try to pick apart the process bit by bit. host: what are you hearing about compromise? there are democratic house members and senators who are looking at compromise on making tweaks to the health care law? caller: no one thought that it was perfect as past. there have certainly been some overtures in the house to look at some funding mechanisms or other aspects of upset. the specifics of those might

start to come up later this week with a resolution that republicans plan to allow the committees to start looking into those details. host: a lot of people have talked about the symbolism of wednesday's vote in the symbolism of the debate. who should our viewers watching? caller: the key members would be the two leaders. the new speaker and the old speaker. also, some of the freshmen, these 86 republican freshmen who made the repeal of the small the cornerstone of their campaign. of course, also in town this week will be some tea party members who will leave that their movement was inspired by this. lots of factors to watch this week. host: finally, what happens

after this health care vote? what will the house republicans bring to the floor next week? caller: things will get hotter as the rules committee takes up a resolution to actually began slashing the remainder of 2011 non-security spending back to 2008 levels. everyone is looking at the state of the union speech from president obama. he will be having a private hubble with democrats in cambridge on friday. civility in washington will be put to a test this week. host: thanks for your time. caller: thank you. host: tony, independent line. we are talking about u.s.-china relations on the eve of the chinese president's visit to the united states.

good or bad? caller: i would like to comment on the fact that our military advantage over china is effective because of the technology that we have over them. if that is taken away, with those super computers that we gave them -- and what we did that give them they bought or they stole. that was the only advantage we ever had over the chinese, technology. everyone is so surprised that they are competing with us economically, but we gave them that ability in the 1990's. host: an interesting piece in "the wall street journal" this morning.

host: nv, good or bad-u.s.-china relations? caller: i am glad that people are starting to finally wake up. a couple of years ago you would not hear any talk about how bad that it was because everyone still had jobs. now that everyone has no jobs people are starting to use some common sense. do you want to buy u.s.-made products? there is a web site you can check. usstuff.com. there are other web sites as well. save our country first. you can find them at various retail elements throughout your

local area. check the label. host: do you do so? caller: yes. unfortunately i had to buy child galagos from finland and canada, but everyone else's christmas presents were made in the u.s. host: did you spend more on them because of that? caller: more than last year, but that is because i did better this year than last year. host: here is the story from "the new york times" this morning in the business section. host: woodland park, new jersey.

harold, good morning. caller: when you go to purchase cheap stuff that the dollar store, is made in china. in a combat veteran from world war ii. to see our flag, symbolic to the country -- host: harold, you have to turn down your television. i will put you on hold and we will come back to you. richard, ark.. caller: what most people do not realize this that most of the parties that -- most of the parts are made in china, even if they have been assembled in the united states. we do not have that manufacturing to make these parts anymore. no matter what happens, many of

the parts still come from china. host: richard, arkansas, all right. back to harold. go ahead, herald. caller: what i was talking about was those dollar stores where most of the things that you see are made in china. what bothers me the most, being a combat veteran of world war ii, people are purchasing american flags made in china. i think that patriotism is going out the door, so the speak. host: rohm emmanuel os/2 persuade chicago voters, this is from "the chicago sun-times." president -- expected to appear with him this morning.

john, go ahead. caller: we will be dealing with china as long as our business people love being in china. they see the profits that the american citizens do not. the man that had to put usa labels on chinese products, they're doing that with mexican stuff also. our business has been ruined. not long ago there was a caller from the center of -- i cannot remember what it was -- but asking him about the devastation of the middle class, he said yes, it had been devastated. is that not where the tax money is really coming from? host: what should happen, then? caller: we need people that

standout for the usa and our citizenry here. yes, we have to watch our interests. the military complex loves it. why were we still in germany after world war ii? we were not supposed to be there anymore. host: are you looking for tough language from the president this week? caller: i am. the world needs to hear tough language. they love taking advantage of us. host: detroit, democratic line. caller: i would like to mention the trade deficit in china. after the first 150 years in the united states, the government found -- every 24 hours daily of our country loses $1.6 billion to the trade deficit.

only a 20% tax on all u.s. imports could stop the bleeding in this country. host: all right. this is from the ap this morning. "u.s. companies have long demanded that china let its currency rise." host: you mentioned the trade deficit. here is "the christian science monitor." showing that there is a trade gap between the countries. $299 billion in exports to china. milton, new york. john, independent line. caller: it all comes down to

economic policy. if you were indoctrinated by the media, this is something that we have been pushing for here in the world for decades. the united states has been the leader of the world policy of a global economy. it is almost out of our hands. the problem is that now we have to compete. in the 1960's and 1970's we did not have to. that is what china is doing right. they are doing what we did 40, 50, 60 years ago. while we are in these wars, fighting in invading, they have invested in new industries. they are looking for new natural resources. doing everything that we did 40 years, 50 years ago. we are getting beat at our own

game because we are not doing the right thing. host: what is the right thing to do? caller: we have to do what everyone is saying that we are not doing. developing new, green technology. developing new products. we have to be the leaders. we cannot sit back, getting in these wars, fighting over every little thing. they're putting plans in the way that we used to do. host: forbes has a look at their most powerful people list. number one is the chinese president. no. 2 is barack obama. also, if you go to treasury.gov, you can see major foreign holders of u.s. treasury securities. china, $906.8 billion.

host: donald, good morning. u.s.-china relations, good or bad? caller: they are bad. jack walsh of general of electric has paid 0% in income tax over the last 20 years selling the chinese jet engines. destroying the american ability to run the airlines around the world. thank you. host: we talked to billy house about that health care debate,

and continuing today, on the house. this is the store that many will be talking about today, from the front page of "the washington post." host: palm beach, florida. michael, independent line. good morning. michael, are you there? good morning. you are on the air, sir. u.s.-china relations? caller: the things that people need to understand -- yes?

host: we are with you. caller: the thing that people need to understand about china is that everything is absolutely spiritual. china is one of the kings of the east. we were told depth over 4000 years ago in the scripture. one of the tribes -- we are one of the tribes of the house of israel. the problem is not just with china, it is with all of the factions, including germany and the european union. host: we will continue the conversation, including the chinese president's visit, but first i want to let you know that the republican member for new jersey who is a public human-rights committee activist, he is holding a news conference right knelt on human relations

in china. you can find the cover of john -- coverage on c-span.org. we will be back in a moment. ♪ >> you are watching c-span, bringing you politics and public affairs. every morning, "washington journal." connecting with policy makers, officials, and journalist. weekdays, coverage of the u.s. house. weeknights, supreme court or arguments and policy forms. on the weekend, our signature interview programs. you can also watch our

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continues. host: richard mcgregor is the bureau chief for "the washington times." "looking at the news related to the visit." let's begin with what china will want for -- one from the united states. what is the chinese president saying to barack obama? guest: to some extent i think that they would like to cool down the aggravation that has taken over the ties to the u.s. lately. china depends on a stable environment. they depend on trade. really, the relationship has gotten out of kilter over the last few years. they would like tactical reassurance. china obvious as the once parts of america.

we want technology from the u.s.. we get to see a deal involving general of electric, which we could talk about later, which is interesting. they want that tactical reassurance. host: we had one caller that we were talking to about u.s.-china relations. one caller said that he wanted to hear tough language from barack obama. caller: i cannot speak to guest: i cannot speak for the administration, but i would guess that there would be some tough language from the u.s. laced with a lot of cool them. wherever the u.s. looks in the world, it meets china. iran, climate change, north korea, you name it. this conciliatory line towards china has not been reciprocated.

china had that moment two years ago, they were in a strong position and to manage of that. host: how have things changed? caller: -- guest: there has been a backlash. especially in asia. many countries in asia are hustling to get the u.s. back involved in the region in a much more active way. vietnam, trying to be forged ties with the u.s.. -- re-forge ties with the u.s. the same goes for correa, the philippines, taiwan. host: we have heard a lot of discussion about chinese currency that is undervalued by

some assessments. what will be said about that issue? we see that some senators, specifically senator sure, are calling on china to let the currency float. how will that impact of isabella host: -- impact the visit? guest: there is no doubt that china manipulates and controls its currency. you can see that every month. in some sense that is a sign of weakness as much as strength. money cannot come in and out of the money freely. if they did lift their currency, i do not think that they could handle it. it might plummet rather than appreciate in the short term.

currency is appropriate and the u.s. will make tough noises about pat. particularly because capitol hill wants to hear. this is not the number one issue. there are others, technological and the like -- competition issues that the u.s. needs to address. host: first, the chinese president has something to say about the u.s. currency -- calling it a product of the past. guest: he called a u.s.-led global currency product that is a thing of the past. the u.s. dollar, the policy of the fed, printing money -- all of which china feels they want to pull over to their shores to stoke inflation. it is true, but i think that

china is exaggerating to put the u.s. on the defensive. the real problem is not the u.s., but chinese military policy. that is a stick that china can use to be up the u.s. had little bit. and they will do that. host: this is from "usa today." inflation could help u.s. exports? guest: absolutely. if you have inflation in china, the goods automatically become more expensive. it does the job for you. re-evaluation by 3%, putting in inflation and doubling that. host: let's talk about the deal that you brought up between general electric and china. guest: the core of the design

is that general lecture will transfer technology to china as part of a joint venture to build their own plant in china. this is a very sensitive thing to be announcing on a trip by the chinese president to the u.s. -- chinese president to the u.s.. complained about this to the chinese premier recently. saying that we will give you access to the market, we will give you the technology. ge also, in their comments recently, they talked about wondering whether china wants them to succeed in china or if they want to just get that

expertise, knowledge, management skills, and technology. so, generally electric is really sticking out its neck. host: let's take some phone calls and talk a bit more. rodham, a democratic crime. caller: i believe the united states needs to take a much more proactive agenda. like offering tax breaks for anything made in america. taxing the things we are importing. we used to be known as a country that when you bought a car here, it was a well-made car. we have got away from making anything in this country. by shipping those jobs overseas, in america when you want to purchase american blue jeans is

more expensive than importing it at a cheaper price. guest: i think that the u.s. distillate larger manufacturer then china. i also am not sure that tax breaks is the answer. maybe in certain areas, but tax breaks on things made in the u.s. may not be a good idea. there is a host of other things that is just as important in the u.s. for competing with china. let's not use military language like combat. fixing, importing its own u.s. house in order. it is about education. basic research. many of these things would be affected as a result. the second thing is to use global trading rules, which china has signed up for.

the chinese used it to attract business from china. i have no doubt that the u.s. can compete with china but people will have to work harder. host: what do you suspect will be the middle ground? that both leaders talk about? from what i am reading in the papers they both get to publicly announce that they have made some progress here and there? guest: in some ways it is the atmosphere. this is one of those too big to fail relationships. in terms of military strategic stability, in terms of economic dynamism, there is a lot at stake. in our lifetime these kinds of struggles will be going on and beyond. this is like a full-time

management issue. there will not be a solution this week. there will not be a dramatic change. you will see people working harder to manage their differences. there will always be differences and problems. host: frank, independent line. you are next, sir. caller: i really appreciate c- span. i have been listening forever but i do not call very often. there are a member of this year -- by m 62, a white male in arkansas. a number of us are concerned about the demonization of the chinese people. we are trying to put all of the chinese in the same box. this is a vastly different culture. they have given us a great gift. i am afraid that our politics,

prejudiced, fear and confusion is going to deprive us of this wonderful gift. i would encourage listeners to ojitree.com.g look at the wonderful gift of traditional chinese medicine that we have here. have a great day and we wish you nothing but best wishes. host: if you go to the state department website and you look at the population figures, many of you have mentioned the many people there. in july 2010, an estimate was 1.3 billion. education, about 93%.

agriculture and forestry make up about 39.5% of that. richard mcgregor? guest: i agree, there is no reason to demonize the chinese people. their achievements -- mr. this traditional culture, as you say. millions of people have been lifted out of poverty. we should not underestimate the challenge facing that country. it is a massive task. in many respects, they have done very well. host: what is the state of hu jintao's presidency?

when secretary gates went to china, there seem to be a test of military power that they had no idea of. guest: i do not buy that. when hearing about this test, -- maybe he did not know -- but i do not buy that. his most important title is not president, it is party secretary of the communist party. that puts him above the military. the military is a powerful interest group but the political party is still in control. the second point is, mr. hu himself, compared to past leaders, is something of a week later. he is like your super pure crap.

-- a bureaucrat. that makes it hard to get a decision. he has got to persuade everybody. so he is not the strongest leader and people should not expect him to snap his fingers and get things done. host: 20 you think about him joining president obama for a joint news conference this week? reading the papers, he does not do interviews. guest: it will be fascinating. i wonder if it will be a real news conference or just a couple of scripted questions. he is not used to this. generally, he is shielded from the sort of thing. host: he is doing this because of prodding from the united states? guest: absolutely, and i think it is a good thing one reason

why, if, china is misunderstood is because we do not know their people. we do not have a sense of their personality. we do not know what drives them as individuals. we just have this monolithic view which allows people to demonize them. that is as much as their own making. host: front page of "in the financial times" -- they kick off a series looking at china possible global influence. i am curious. your front-page story is, lending to new heights. your third hand line on this is, it is a stark sign of beijing's economic reach.

given everything that is happening, what is with the headlines? guest: and the world bank has been the world of's development lender for the past decade. in fact, china lends more to pour states then the world bank. china claims to still be a developing country itself but it is the largest giver of development aid at the same time. so that just shows you how active they have been in according states that feel like they may have been ignored by the west. chinese diplomacy is not just happening in washington, it is happening throughout the world. host: what is china getting from these poor countries? guest: perhaps diplomatic allegiance, but most importantly, resources.

china is growing exponentially. they do not think they can depend on the world market. they want direct access to it. the same goes for coal, iron ore, copper. they want direct access to these things and they are using the money to get that. host: richard mcgregor is the bureau chief for the "financial times." next phone call. caller: the united states has 1,600 tons of recoverable coal which is enough for the united states. we sell an enormous amount of this to china at this time. if we want to slow down their economy, we could jack up the price of coal and slow down their consumption. guest: i could assure you that

that would not work. they have tons of coal coming from other countries. a coal boycott to china would fall flat on its face, i am sorry to tell you. host: hampton, georgia. caller: thank you for the great job "washington journal" is doing and for giving us an opportunity to voice our opinion. i watch a lot of c-span. i noticed that a lot of people will make their opinions, but nobody will talk about the problems of the united states. host: could you stop right there and repeat that? caller: is it possible, through

the way that exporting is set up, that the debt that china is holding, some of it could come from the importing and exporting? host: richard mcgregor? guest: yes, some of the debt has come from funding u.s. consumption. as far as where the u.s. is a creditor, i am sure there are some countries, but i do not have a list in front of me today. host: burlington, vermont. mike, good morning. caller: good morning. richard, the primaries and for china to grow militarily -- the

primary reason for trying to grow militarily -- china is simply reassembling a former empire. china uses money to obtain the resources. the u.s., unfortunately, has used our military to build up the military in four nations to exploit the resources. the leadership in those countries traditionally have been fascist, military dictatorships. south america is reacting to that and they are moving to the left. we have a problem in south america and we also have a problem in sudan.

they have the largest pool of oil outside of saudi arabia, and china is there. guest: it seems in china there is a deep sense of injustice, victimization. frankly, i think it is nurtured a little too much by the leadership to keep it going. you are also right that the u.s. and china were both forged in revolutions, but they were different revolutions. the u.s. had a democratic revolution. china had a traditionally structured communist party still in charge. the biggest gulf overtime has been the difference in their political systems. there are some similarities but the differences are much more important. host: pennsylvania.

bill on the republican line. caller: good morning. the chinese people, like all people, are good people, they are working their jobs. we do not have a problem with the chinese people. as this john indicated, the chinese are communists. what is the united states doing? we are importing a lot of plastic junk, vcr's, computers, and we are exporting cars, gold, iron, metal resources, copper. what else is the united states doing? instead of recognizing the

military power of china and trying to strategizing, as you said -- may be a slip of the tongue -- combating china, the communist regime, instead of doing that we are now fighting a group of tribes in afghanistan. guest: that is an interesting comment. you say that the u.s. is importing plastic, but americans are buying these goods. the military aspect is interesting. china's military might is growing. as it does, it will run up against the united states. one of the fundamental reason why asia has been so successful is because the region has been kept stable by the u.s. military in korea, japan.

the career in civil war is not over. japanese tensions are very real. these areas have been able to boom because of the u.s. influence there. in the next decade, china could begin to bloom. host: on that thought of dominance, a piece in "the wall street journal." a tweet from a viewer -- guest: that is an interesting piece. i think there is some truth to that. as we discussed earlier, i think

the u.s. is weak at the moment and they want to take advantage of that. however, in the u.s., i get the sense that the country has stabilized, compared to two years ago. the u.s. has expertly marshaled its allies in asia. this will be a competition -- come back, if you like -- over the next few decades, and the u.s. has to get it right if it does not want to give up power and influence in the asia- pacific. we should include in that the indian ocean, another area of chinese interest. host: "get it right." how so? guest: you have to nurture your allies, going back to the bush

administration and the indian deal. rewater the roots of the relationships of the countries in asia. but the u.s. will not be strong unless it is domestic problems are fixed. that is the biggest problem that the u.s. faces. host: you talked about the currency issue, whether or not that was a real issue. one professor, according to his research, says that that is not the issue.

host: can you explain that a little bit more? guest: we tend to focus more on the u.s.-china trade deficit. however, with asia as a whole, it has not changed. in that respect, i would agree with some of the points being made there. where i would not agree is it is not just about the currency. one of the most important exports of how the u.s. are to china -- of the u.s. are to china, and increasingly in

aerospace. in the u.s. wants to be careful that it does not build a rival industry in china for what is its iconic, global leading industry. host: bill in new jersey. good morning. caller: one thing i notice about china is they have unfair trade policies. i work for a juice processing plant, so i know. two years ago they started selling -- under selling apple juice on the market. since then they have just about put the american brands out of business. if you look at the ingredients, there is apple juice somewhere in there. it is a small thing, but it is

an example of what they're doing. guest: that is interesting. you make two. there. first of all, it is true that china has state monopolies, increasingly a target to trade policies. the second thing about their apple exports, juice, is fascinating, if true. that would be largely private chinese companies. china has to feed 1.3 billion people. garlic does not sound like much, but the south koreans, it is one of their staple foods, and the chinese took over that market. i do not know if it is true, but it just shows that the power of the chinese extend beyond just plastics. host: talking about rising food

prices, what is china's role in that? guest: not much. they are suffering from it as well. i think the administration is actually pretty freaked out from it. host: will they ask the united states to do something about it? guest: no, they will do the sorts of things that we talked about before, quantitative easing, monetary policy, adding to global inflation pressures. host: windham, connecticut. stephen on the independent line. caller: good morning. we just saw a revolution in tunisia. one of the kicking points was inflation in food. i read in your newspaper about the housing bubble in beijing, the real-estate bubble.

could you explain more what is causing inflation? i really enjoy classical chinese literature. i have always had something of a love affair with china -- maybe more of a love-hate relationship. this is causing problems in north africa. what is going on with that? guest: i do not know if i can provide the absolute answer, but within china, it is chinese monetary easing. china flooded the world economy with crash to make sure the economy did not fall off a cliff. that is the first thing. too much money chasing too few goods, the old explanation for inflation. china has also had all sorts of

problems with agriculture in the past year. there are some shortages of staple crops. some of the prices for the agricultural goods they do in court, such as soybeans, are going up. so it is a combination of factors. host: "the wall street journal" from the 14th. do you need a chinese bank account -- guest: i would like one but i am not in the position to have an account. if you have a residency in hong kong, you can have a renminbi account.

their current places where you can get an interest-rate here. -- there are places where you can currently get a great interest rate. host: until now, we have had few options to hold yaun, but they say -- guest: i will go there later this morning. host: cottonwood, idaho. you are next. caller: i would like to ask about the practice that china seems to have. they go up into those countries and get the resources and lock them up for chinese

use. we do not need to fear the chinese people at all. the chinese government is very communistic and very ambitious. i think they are very dangerous. walk softly and carry a big stick. well, america does not have a big stick to carry any more, so meanwhile, we have to power, while china is going around the world and buying up resources, putting us in an untenable situation. american people, pray and ask god for wisdom on how to deal with china. we need to be friends, but we also need to be cautious about their government. guest: i do not think the u.s. is cowering.

no doubt, china is growing in influence and using the influence to get the resources it things it desperately needs. for whatever reason, when the u.s. went into iraq, it was not to keep the chinese out. but i do not know whether there is much that can be done about that. host: richard mcgregor, financial bureau chief with "the financial times" thank you for being here. remember, our coverage of hu jintao's a visit here to iin washington. for a schedule, go to c- span.org. up next, republican strategy in cutting the deficit and tackling the budget.

>> reince preibus plans to accelerate the handover of power today by making more personnel moves. in one of his first acts, he fired the linda cook, an ally of former rnc chairman call steele.ael next week, the president delivers his state of the union address and well line his budget. another budget will be released next week as well. freshman republican rand paul of kentucky says he will unveil his own budget plan. that would result in a $500 billion cut in one year. that is five times more than what the house gop has planned to do. his version of the budget would target programs at virtually every agency, including the

defense department. an update on presidential politics. a campaign to draw mike pence of indiana into the 2012 presidential race began yesterday. a deputy counsel to ronald reagan introduced the americas president committee. a former republican representative is helping to campaign and collect signatures from conservatives and tea party members. >> the house takes up the repeal of the health care law. watched today's debate and final vote on wednesday. go to c-span.org to read the bill on line and comment on our twitter or facebook pages. >> the best way to carry on dr. king's work is to reach out to someone and make an ongoing commitment to community service. >> on the 82nd anniversary of

martin luther king's birth, the use the c-span and video library to relive his life. host: ramesh ponnuru, senior editor of the review magazine, here is one of your op-eds. what are you are doing here? guest: i am explaining how republicans ought to go about entitlement reform. a lot of republicans, led by paul ryan, the republicans from wisconsin, felt strongly you had to rein in the growth of social security and medicare. i am suggesting that is absolutely correct, but it is

crucial to do the right way and to prepare the public politically for it. you have to either get the president to lead on this issue -- because it requires a presidential leadership -- or you have to campaign in 2012 and get a new president elected on this platform. you cannot have house republicans' lead on this reform. host: so in the near term, republicans should not be sticking their necks out on this? guest: to prepare the ground, republicans should cut spending in other areas to start rebuilding their credibility as a spending-cutting party. host: you admit that there is a risk looking like you cannot lead on this issue, which is something americans are concerned about.

guest: only in washington do people say that $100 billion is not a lot. it is only in comparison to the size of these enormous entitlements. if you cannot start there, then you are certainly never going to get to those entitlements. you are right in your perception that at the end of the day, unless you have big tax increases, you have to rein in entitlements. host: how do you go about doing this? paul ryan has a road map for america. you did see a lot of republicans voting to endorse those ideas. guest: there is a lot of caution, but frankly, there are a lot of republicans who are not familiar with the entitlement issue such as paul ryan or other republicans. part of it is the educational process. it is not just a matter of

politicians and officeholders educating the public about the challenges and possible solutions, but also in educating themselves and getting up to speed. did you want to talk about the specific solutions? host: absolutely, yes. guest: social security, conceptually, it is the easiest to fix of the two. that does not mean it is easy politically. one solution would be to slow the benefit levels for upper income, high earners. right now, the system is designed so people who retire in the year 2014, who are high earners get a lot higher benefit level than people who retire this year. the suggestion that many have made is to say, let's keep those benefits level. but have those benefits adjusted for inflation but not grow any faster. host: and he would also

establish private accounts? guest: i would prefer those accounts for people to invest some of their social security payroll taxes, but in the current political climate, particularly if we are talking about a bipartisan deal, that is something that may have to go by the wayside. host: cordelia, georgia. go ahead, buck. you are on the air. you have to turn down your television. caller: i would like to find better who decided to invest with the chinese? they are not investing with our individuals or jobs. what caused us to be in this position? everyone in government that put us in this position needs to be removed and put in people with some common sense. host: we have moved on from that

topic, now talking about the house gop strategy. let's go to chris in virginia. caller: i have been wondering what the income of the u.s. is, nobody tells us. i was also wondering how much senior citizens pay into entitlements. this report, we exceed what we pay because of our claims. we are on top of the game. guest: the question about china is relevant here. one of the reasons we have this economic situation with china is because we have decided to have a government that gives out more in benefits than it takes in taxes. under that system, you are going to have a situation where a large part of that national debt

is financed by other countries, including other countries' central governments. in terms of what the elderly have paid in, people have, throughout their working lives, paid in, and people feel entitled. that is the reason we call them entitlements. the problem is, the math does not add up. the current generation is taking out more than they ever put in and we have a situation where future generations will have to put in more than they will take out an order for the books to balance. host: you said social security was sort of the easy one when it comes to an entitlement programs. the other big one is medicare. do you endorse paul ryan's ideas on medicare? politically, can you not touch that issue at all? his basic strategy, which

was partly the idea of a bipartisan commission from years ago, is to convert medicare into a premium support program that helps people buy private insurance. it is essentially voucherized. if they want to buy a gold- plated policy, they can pay a bit more. if they want a cheaper policy, they could save some money. i think that is the direction that policy needs to go in. you could quibble about the important details. host: a former reagan economist writes --

medicare beneficiaries would buy private health insurance with the vouchers. these amounts are considerably less than spending per enrollee in 2022. so there is a cut in spending off tright off the bat. this means the real inflation adjusted voucher amount would fall continuously. to reduce the shortfall, beneficiaries would either have to pay out of their own pocket or pay for private insurance over and above what could be voucher.foby the guest: that is the point, to generate savings. it is a little misleading to talk about this in terms of historical trends in costs. a large part of the point is to

change that trend by encouraging a new marketplace in which cost savings is preferable. as this went through congress, i do not think you have something structured as a quick, sharp cut. second, i do not think the prices would increase as much, so the gap would not be as large as people think. host: a conversation over spending kicks off this week. you heard c-span radio talking about it. the debate is expected to begin on wednesday as the rules committee takes up legislation directing paul ryan to set up spending for the rest of the year. democrats complain that spending levels are set up through a committee process and that republican leaders are directed to much power to mr. ryan.

what are you hearing about where cuts?may make chip guest: i think congressman ryan will get his rule changes. there is not one committee that is even responsible. everyone has a responsibility, so therefore, nobody has responsibility. what republicans are going for right now -- they are going to take some things off the table and have across-the-board cuts on everything else. i do not think they are going to try to get into a line by line, let's get rid of this program,

and so forth. host: jacksonville, florida. proves. -- bruce. caller: good morning. i have worked for 46 years, i paid in through social security, medicare, when they started charging for it in the 1970's. i am still paying for medicare now through my social security check. my employer paid in, but as i said, i go ballistic when they run medicare and medicaid in the same sentence. in all my years of work, i have never seen my fica, social security, medicare tax.

if you want to fixed social security and medicare, and if you never paid into the system, you never get anything out of the system. guest: i agree that medicaid is a seserious problem. in some ways, the need to act on that first. politically, it makes sense to act on it earlier, but it is carrying so much trouble for state budgets because it is a joint federal-state program. i think you need a more clear and defined responsibility between federal and state government, and a cap on the growth of that program. host: in "the wall street journal" this morning, they talk about that vote happening on wednesday to repeal the law. it says republican governors --

you suspect this will be a big fight? guest: absolutely. the bulk of the increase in enrollment from the people who are meant to get insurance under the new law is from an expansion of medicaid. that is already causing trouble for states. host: what can congress do? they have this vote to repeal it, and then they will go after it piece by piece. what do you expect republicans to do? guest: i think your question implies that democrats will be strong enough to block these actions. not, the president would ultimately stand in the way. the next thing to do is to have a series of politically charged

fight over these things. one thing that makes sense is, in the new health care law, you have cuts to medicare advantage, which is the most market- oriented part of medicare, which has a pretty high satisfaction rate among the elderly. one thing republicans will be tempted to do is restore those funds and pay for and by delaying the implementation of these new benefits. therefore, you create a logger time period id which to fight to get the entire obamacare program -- longer period of time a fight to get the entire obamacare program repealed. it is giving more to seniors and taking away from others. and we do have a problem about

the fact that the budget is this prioritized for the elderly. that is true. however, a move toward a more market-based health care system is worth the advantage. host: dori in chicago. good morning. caller: good morning. the democrats and the bill that obama just signed, the tax-cut bill, they put in a provision that the pentagon only needs to buy solar panels made in the u.s. are the republicans going to try to repeal that? and number two, social security is not contributing to this deficit now, at all. why are you picking on social security? host: ramesh ponnuru? guest: right now that may be the

case, but in a couple of years, it will start to spend more than it takes in. the growth rate of that shortfall is pretty rapid. if you are looking at it over any kind of time horizon longer than the immediate one, it is a problem. keep in mind, nobody is talking about cutting battle that loss for people who are currently retired, or even those who are near retirement. we are talking about changing the program for future retirees so that it is a more affordable program. host: how do you respond to those who say that medicare is not the problem, it is a health care problem? here is paul ryan on his blog.

guest: i would say one of the reasons we have a health care problem is because medicare is structured in a way that it can offload a lot of its costs on the private sector. medicare is governed by a series of the fact of price controls because the government uses its vast pressing -- purchasing power to set prices for the medical industry. that distorts the entire health care marketplace, changes prices in the private sector, offload some of the cost to the private sector, and that is some other reason why you have the high cost escalation. medicare is a huge program and it is very hard to isolate its attacks within the health-care marketplace. host: an e-mail from a dealer

about reforming social security. guest: there is a very large -- lively debate, i am sure you know, about the defense budget. even people on the conservative side are saying defense should not be sacrosanct. there is some waste here. that need to be cut. no question, the pentagon is a government bureaucracy and government bureaucracies, by their nature, are inefficient. host: this morning in "usa today" --

our economic stability goes hand-in-hand with security. ventura, california. caller: good morning. i would like to make a couple of comments on social security. when it first started, it was meant for working people. now it seems like anyone who is a drug addict, obese, illegal alien, any time anything happens, they get social security. social security is one of the best programs we have. it is being ruined. the politicians should be put in jail for how much money they stole out of it. guest: i think he is talking about the ssi disability

component. there are questions as to whether or not that is being abused. my understanding is, even if you fix that, you still have this shortfall because you have just got the benefit levels and tax levels out of whack. in terms of stealing -- one point that is often made -- the trust was supposed to be accumulated. the idea was we would save that money for when people retire. that did not happen because the government spent all the money. that is a legitimate issue. host: here is the latest edition of "the national review." ramesh ponnuru is the editor there. here is an e-mail from a viewer who takes issue with your

argument. guest: some republican did campaign on the idea we needed to make these changes to social security. most of them did not. they do not have a mandate on this. the other point i would make is, boehner said that in contemporary american politics, the president needs, and you cannot accomplish this big, structural change without presidential support. next phone call.

arizona. paula, go ahead. caller: when you talk about the wealthy, what exactly do you mean? and i do not agree with means testing. you should be able to get your social security benefits without means testing. how would he go about testing it, that they have a retirement from their company, that they have investments? exactly how would you go about this means testing? guest: that is a good question. currently, your social security benefit levels, the amount a retiree gets, is based on a formula. the key variable is what was your income during your working years.

the more you made the more you paid in, up to a certain level. the cap right now is $175,000 a year. the more you paid up to that level, the higher benefit you get. you can change that formula so that you still get more the more you put in, but it is not going to be growing as fast as it is under current law and will not bankrupt the system. the idea is not that you do not get what you put in. the idea is you get what the system can afford to give you based on what you put in. host: newton, north carolina. betty, good morning. caller: i have a question on social security. i draw from social security because of certain things that have happened to me. why do we not get a raise? they said spending has gone up

in the past two years. where do they get the information from? we need this little bit that we get. i worked hard to get social security. like the man said earlier, there are some who do not deserve it, but the government cannot go after everyone. guest: i think what you are referring to is that the fact there was no cost of living adjustment for two years. there was actually a decline one year. when that happens, your benefit levels stay the same. so the real value of those benefits go up. and you do not get another adjustment until prices have gone up to adjust for that. i would guess that next year there could be a cost of living adjustment, depending on what inflation does. there are many arguments as to

what the best measure of inflation should be. should there be a measure tied specifically to things that people who are elderly tend to buy? even if you look at those measures, on average, the purchasing power of a social security check is as good or better as it was a few years ago. host: if you continue to see if the price of food go up, gasoline, those types of items, so you could see the politics changing? guest: we could have cost of living adjustments kovach up. host: next phone call. caller: i would like to know why no one is mentioning not welfare. -- is mentioning welfare. women have the right to choose, but they have to support the

people that they bring into this country. in new york, they do not have to go back to work. there is no birth control or regulation. host: is welfare the biggest entitlement? guest: no, and we actually had some reforms. those have made it a much salient -- a much less salient issue. host: next phone call. caller: we are looking at cutting the budget and right away we talk about social security and other entitlements. i wonder if we could look at the possibility of cutting foreign aid? charity is nice, but you cannot do that when your own family is going hungry. host: this is "the washington times" and a story about the house budget, what republicans

plan to do. it says the u.s. provide more than one-fifth of the united nations's annual budget. guest: one economist used to say that foreign aid is rich people giving money to people in poor countries. that is one of the depressing features of budget politics, that the public will say, let's balance the budget by cutting foreign aid. the math does not add up. host: what is the percentage? guest: i do not even know the number. it is always a tiny number. low single digits. host: nashville, tennessee. mark, go ahead. caller: there is no such thing as the liberal media, as people talk about.

when obama is the first president to take control of the white house, he took control of banks and corporations. what the media is doing now is preparing people to lead the rout publicans get medicare. thank you. -- people to let the republicans get medicare. thank you. guest: actually, they have not been very tough on the financial industry. host: president obama rights in an opinion piece --

within the paper, they have this story. writes -- williamson right guest: there is this myth that there was this huge amount of deregulation that took place under the bush administration. which is not true.

you had this increase in corporate finance under sarbanes oxley. you have corporate accounting scandals. although no one noticed, a big increase in regulation under the americans with disability act. you have a child product safety regulations. now the obama administration is talking about having regulations on carbon emissions, although congress had never passed anything on global warming. so we have a regulatory explosion. it is useful to talk about the cost effectiveness. but i think the rubber will meet the road on the last thing i mentioned. if the government decides to clamp down on carbon emissions without a congressional vote, i wonder how much administrative review could be achieved? that is real dollars we are talking about. host: phone call from oklahoma.

republican line. caller: we want to cut spending so much, why not just get rid of welfare spending for those people who are just living off of it? everyone else is struggling to survive with what they have now. why don't we have it so that they cut that, so that way, the spending will go to the necessary things we need to be spending on. guest: earlier, i was talking about how you could not get a lot of savings from welfare, but you can actually get a large amount of savings if you cut corporate welfare. there is a lot of spending that benefits companies -- agro business in particular -- making more than the national average, who will not be heard without the subsidies. an economist at "the wall street journal" has talked a lot about

passing a law that says no federal payments to companies that have more than $1 million in sales a year you can have contracts with the government, but no benefits, no export- import benefit dollars. i think that makes sense. host: we have 15 minutes left with our guest, ramesh ponnuru. next phone call from florida. peter, independent line. caller: in florida, there is supposed to be a trust fund. now it is in the general fund mix together. social security has been broken, they have been tried to break it. my other question, do other countries have socialized banks? host: peter, are you still there?

guest: we were talking about the talk -- trust fund question earlier. the problem is, it consists of ious from the government to itself. it is not that the government is not going to make good on its obligation. people are, by and large, going to get their social security check. even if worse comes to worst, they get a fraction of what they were expecting. the problem is to make good on those ious, the government has to cut spending or raise taxes. they have to do that whether or not there is a trust fund. host: here is "usa today" with the latest gallup poll. if you look here, the favorable opinion for president obama has climbed to 63%. you write about obama having the advantage.

evicting the president will not be easy. what do you make of those latest numbers? guest: is not surprising that his numbers have gone up a bit. he has had a decent couple of months. most people like the extension of the tax cuts and unemployment benefits. there was very strong approval for his speech last week. even many conservatives supported that speech and thought that he did a good job, including this conservative. even if you look away from the day to day polls, i think that the thing that republicans are feeling, confident about their chances in 2012, they need to keep in mind that the obama approval rating even in his worst days have never gone below the 40's.

a pretty decent for and that he has got. you have a blindfold with respect to the future. is the economy better? are those numbers higher? the 2012 race is much different from the 2010 races. you have the favor of obama for re-election. host: who is the strongest gop contender? guest: you have got a cluster of people. mitt romney, mike huckabee, sarah palin. they are the people that republicans have nationally heard of. there is a chance for someone who is not part of the national landscape to become familiar. that person might be the

governor of indiana. they have got to start moving in the next couple of months. caller: this social security thing, we can fix it. maybe if we started to take out taxes, let that grow before you go to college. the jobs in this country, are we driving american made vehicles? we used to be a country of patriotism and i am afraid that we have become a country of greed.

guest: shutting off competition from other countries and making it more expensive for people to purchase consumer products, like cars, clothes, and food, is not the way to go to make this a richer country. that is a strategy that has been tried many places and does not have a particularly good track record. for the other idea, making it harder for people to start families and making it more expensive to raise children is going to be a long-term solution either. especially since we are depending on the children to become a part of the workforce. host: republican line, california. caller: i think that california

is, in its financial crisis, instead of electing someone chris christie -- we went out of our way to let someone -- every elected official in the state of california is a democrat now. we are facing a deficit window of 18 months. we could probably take all of the new england state despots. the example of cutting spending in the federal government, i would suggest that has a lot to do with programs and transportation. other politicians in the fast

rail for the state of california. guest: i do think that high- speed rail is a boondoggle where the federal government pays the state's to do investments that neither one of them would do on their own. the question of the states will be a serious problem. as unappealing as the answer is, it will the eventually be a provision for federal law and states to go into bankruptcy. otherwise the states will be lining up for federal money. host: is that an issue that they are going to face in government this year? guest: entirely possible.

this fire wall for federal taxpayers cannot put the other states in hock. host: what is the issues -- what are the issues they're facing? the obligations to workers? host: this issue is taken up in "usa today" this morning. below that the president of the american federation of state, county, and municipal employees have argued the opposing view. lincoln, rhode island.

jack, independent line. we are listening. caller: good morning. i have a question. how many people in this country makeover $109,000 that tells me that the lower class pays for their whole lives and the rich does not pay anything. this is the social security system. does that not seen little unfair? guest: you would have to be pretty rich to be done paying social security taxes after the first three months of the year. keep in mind how much you pay in if you are making $150,000 per year, you are only taxed for the first $109,000. the program is set up so that there is a relationship there.

you have this fundamental question of fairness. by raising or eliminating that tax and not putting in higher taxes, you could eliminate the shortfall. but possibly you could do more dama to the economy as that would be a serious tax increase and you would not solve the entire problem. host: bob, houston, texas, democratic line. caller: good morning. i would like to rescue -- do you know what the amount of tax -- i would like to ask you -- do you know what the amount of tax contributions were by the corporation's 25 years ago? guest: i do not have those figures. host: what is your point? caller: i am old enough to know

that corporations use to contribute 30% of the total tax collected by the government. do you know how much they contribute today? host: tell us. caller: it is less than 10%, is it not? guest: the interesting thing about corporate taxes is that america has gone from having one of the lower corporate tax rates to having one of the highest corporate tax rates in the developed world. not so much because the rate has changed, but all of these other countries have been cutting their corporate tax rate. possibly because you have a more competitive global marketplace year and companies making these corporate location decisions come to their countries to make investments in their countries. i think that this is maybe one of the things the caller was getting at.

there is a loophole in the tax structure so that collections are not as high with tax rates seeming as just. why not reform this? we get a single loophole and bring that corporate tax rate down. so, not to be naive, but i think there is potential for bipartisan cooperation. possibly bringing in slightly more money to bring down the corporate tax rate and make these companies more competitive. host: are you hearing that as a potential package? guest: charlie rangel, who was the head of the ways and means committee, he did have a in his tax reform proposal a corporate adjustment along those lines. something that republicans have been talking about. senator mccain was talking about lowering the corporate tax rate from 35% to 25%.

you do have that potential for cooperation. host: robert, indiana. good morning. caller: how are you doing? host: doing well. your comment? caller: comment and question. i was looking at the debate over reducing benefits on social security. especially the disability part of it. i am very concerned about that. i am on the couch every single day. i am not competitive in the work force. if i was to get better, what would i do? where would i go? where would i turn? guest: by was talking about the question raised by the previous caller about the possibility of private use in the program. all of the proposals i have seen, some of them talk about

increasing the anti-fraud division. sometimes even strengthens programs for the deserving beneficiary is. i find it impossible to believe that anything could get through congress and the white house that would do anything other than that. host: the house debate kicks off the day. the vote is expected tomorrow. this headline is from "the washington post." host: what is your reaction to that? guest: i think that this study is on its face absurd. the idea that 130 million people, that the insurance industry is just not going to sell them affordable policies because they have pre-existing conditions? it is just not believable.

this is the sort of thing that an administration with a vote that it wants to influence puts out for public-relations reasons. regardless of the sense of the underlying assumptions. host: democratic line, southgate, michigan. caller: thank you for taking my call this morning. with all of these jobs going overseas, higher tax rates, people not working, not paying in because they are now working, the corporation's are finding new ways to hide their money to get out of taxes. i was listening to your program. it was quite a while ago. you had a professor from harvard

who was a law professor. the federal government owes between $7 trillion and $11 trillion to social security. where is it going to end? they're just not getting it. host: all right. guest: the social security trust fund question is what we are talking about. remember, social security is a federal program. the federal government cannot be deeply in debt to the tune of $14 trillion and at the same time have real savings somewhere else to tap into to pay these benefits. overall it has to be brought into balance and serve less to make good on these future obligations. outsourcing is not the source of the problem. the source of the problem is that we have promised more

benefits than we are willing to tax people to pay for. you cannot solve that problem by cracking down on outsourcing. the thing about corporations hiding their income, that is another reason why to reform the corporate tax code. host: we are here with the senior editor of "national review." the go to their web site to read more of his articles. thank you. guest: you are welcome. host: coming up next, new proposed laws on lobbying. first, a news update. >> china, the biggest buyer of u.s. treasury securities, reduce their holdings. the treasury department says that their holdings of dropped by 1.2%. this comes before the chinese president's arrival today. 50 taliban fighters have laid

down their arms to join the government in the northern part of the country of afghanistan. the police chief says that the taliban in one district had been under heavy pressure by coalition forces. the taliban spokesman said that they had heard nothing of any taliban switching sides. dick cheney, in an interview with nbc, said that he has not made a decision on my heart transplant, but added that the technology is getting better and better. on another note he complimented president obama on his handling of the shooting. saying that he is not an obama supporter by nature but that he thought it was one of his better efforts. those are the headlines on c- span radio. >> the house takes the health care law debate. watch the debate today, and go to c-span.org to read the bill

on line. >> i believe that the best way to carry on the work of dr. king is to reach out to someone in need and to make an ongoing commitment to community service. >> on the 82nd university of martin luther king jr. as birth, view the c-span video library. in the program, watch it, clip it, share it. >> "washington journal" continues. host: our topic this morning is the proposed changes to federal lobbying laws. our guest is trevor potter, a former sec chairman from 1994, sec commissioner from 1991 through 1995. let's begin with the task force. why was it set up? guest: good to be with you. the bar association in particular, the administrative

law section, they felt it was time to take a look at where we were with lobbying disclosure. particularly with some of the problems that have come up over the last few years. we have had a couple of well- publicized scandals. like the jack abramoff scandal. spending money without disclosure. campaign fundraising and gifts. a lobbying group was accused of raising sums of money illegally for members of corp. -- members of congress they were lobbying, been getting your marks. favorable access because of campaign contributions to get legislative results that were not available to other people that were not the insiders. so, the bar association task force look at this issue of disclosure of lobbying and the collection of campaign finance,

as well as enforcement. the thinking was that, given the obama administration's restrictions that they placed on themselves and the executive branch in terms of hiring or access to lobbyists, it was important to see if congress should do something for the rest of government. the task force concluded that it should. host: you will -- you mentioned recent headlines. our viewers saw this in the paper, the judge agreed to a three-year sentence. is this related to that case? guest: the delay case is slightly different as it relates to texas laws, preventing money from being given to candidates. the judge found that he had sent corporate money to the national committee, which turned around and sent it back to the state

candidates that he had given the national committee list for. the judge found it was a very direct violation of texas law. less lobbying and more. campaign finance violations. obviously, it is all money and politics. if you did not have the expense of elections, you would not be out there trying to figure out how to prevent illegal money from getting into the elections. host: the relationship between getting campaign contributions from lobbyists -- what are you recommending? guest: that was an area that members of the task force felt strongly about. i should note that this task force has made recommendations and the bar association will look at those recommendations formally. obviously congress is the one that passed the windup listing this area. the concern that we have, and it was a group of conservatives --

such as president reagan's solicitor general -- as well as registered lobbyists, an entire range of people -- everyone felt that we had a problem if fundraising for candidates becomes the way the to get access and legislation. we have a constitutional right to lobby our case to congress, but we do not have a right to buy the result. the concern is that someone could go out and raise $100,000 for a candidate by soliciting money for other people. bundling. and you wind up getting that kind of inside access that normal citizens do not get. if you are a registered lobbyist, you are being paid by someone to get a particular result -- or to stop a result -- that that was too much power for an individual and that the member of congress would be too

indebted to that individual. the example we have used, and this is a roomful of lawyers, you have every right to argue your case before the judge. but you do not then have a right to make a cash payment for the judge to influence the result. we found that lobbyists should be making their case on the merits, not whether they had raised $50,000 for a candidate. host: what is your recommendation for changing the rules? guest: the task force found that lobbyists should be allowed to continue giving personally, limited to $2,400 per year, per election. but if a state lobby has a particular member they may not raise money specifically for them. they cannot go out for two years after they have lobbied in the bundle money, hold fund-

raisers, serving on that members finance committee. and if they have done that, if they have been in finance chair, they cannot lobby that particular member for two years afterwards. host: what is the impact on the lobbying industry? how much is able to come from companies to argue the case? guest: the vast majority of lobbyists are making their case on the record. they are engaging in grassroots objectives, explaining why the bill is good or bad. they are arguing in intellectual case on its merits. the concern is that there is a small group, as illustrated by

these recent scandals, or using other tools that we think are basically unfair, using the campaign finance fund-raising tools to get somewhere they cannot get on the merits. it does not affect the ability of people to make their case. it does not affect the amount of money that people spend a lot being. but it does remove the possibility of a small subset of bad apples going out there and lobbying in a way that we think is both unethical and wrong in terms of how the system should work. host: taking a look at the books -- the laws on the books, starting with 1995. there is a

host: what about the one about part-time lobbyists? in your recommendation you talk about lobbyists that are not considered lobbyists because only 20% of their work or less is considered lobbying. correct? guest: yes. one of the important things to make note of is that over time people in the legislative process know that there is no perfect answer. you are right, we have major reform in 1995. in 2007 we had additional changes. one of the things that we learned is that my definition in your definition of a lobbyist, someone paid to go to capitol hill, this does not make that person a lobbyist on the wall. the law establishes a standard and it was the best thing to do

at the time. it said that you had to use 20% of your time as a client, law firm, or in-house, to become a alleges -- registered lobbyist. if you want to gain the system and get around that, you can. you could wind up in a situation where you are walking the halls of congress in getting paid to do so without being registered lobbyist for having to report your activity. that is something the week -- that we addressed. we did not want everyone walking into the building to registered, but we needed a more inclusive registration. host: what kind of lobbyist typically falls into that category of not registering? guest: there are a certain number of public examples that

will not name because i do not think it is relevant, but they are former members of congress that have been hired to influence legislation without being registered lobbyists. they do not spend 20% of their time for that client doing it. or they spend all of their time but they do not actually make any direct phone calls to congress. instead they coordinate with congress. which is fine, people have a constitutional right. >> trevor potter -- host: trevor potter is the co-chair of the federal task force for lobbying laws. looking at the one passed in 2007, the lobbying disclosure act of 1995 was amended for full public disclosure of lobbying activity for giving gifts, restricted use of aircraft, a

congressional pension accountability, and amended house and ethics rules. where are the gas that aba sees them but guest: bilal aims for full public disclosure. we think that it is clear that we do not have that. we think that we ought to. a couple of examples would be the first one that we were just discussing. people that do not meet the current definition of registered lobbyist but are paid to lobby. we propose a lower threshold. someone that spends 12 hours in a quarter lobbying or preparing to lobby, they should go in and register. what is disclosed is equally important in hell. at the moment there is no disclosure of which offices are lobbied. it just says lot leon hr545.

it does not say who. and we think that is relevant. additionally, the disclosure itself is in the stone age. reports get filed with the clerk and the secretary on the hill. but it is not easy to search them. it is not easy, through the internet, to figure out who is lobbying on a particular bill. that technology is certainly there. it is a matter of applying the technology to these reports. we think that congress ought to. host: california, good morning. caller: i have expressed my opinion over lobbying before. at that time i said that i thought that if you wanted to lobby congress, it should be

done before congress. and then let them vote on it. if they want to vote on it, if they want to give money, split that down the middle. another thing that i wanted to bring up, they were talking about foreign influence? what about the illegal immigrants? anyone know how much money they are getting? guest: two issues there. the first one is -- do it in front of congress. that is basically what we are recommending. if you want to lobby congress, which you have a constitutional right to do, it means tell people who do are lobbying against and what you are a lot being done. in terms of the question about

contributions from people that are not here legally, not u.s. citizens, that is prohibited by current law. individuals who are not citizens or do not hold a green card may not contribute to federal candidates. host: l.i., new york. welcome. caller: i must say that you have a strong resemblance to tom kean in your mannerisms and appearance. aside from that, 2008, norm coleman and john mccain both contributed high amounts of money to the politicians within my community. he then received a pardon that was revoked because it was so apparent that there was a conflict of interest. i believe it was $30,000 to the republican party.

represented by fred fielding, white house counsel. i found that that was a conflict of interest. is lobbying not just a form of bribery? guest: thank you for that compliment about governor came. i know the government -- the governor and any comparison to him is an honor. i think that what we all recognize is that there is a balance here. what we are struggling for is to find the proper balance. when the watergate reforms were passed 20 years ago, the feeling was that it $1 million contribution -- which richard nixon had received -- was too much. that it bought something. congress at the time thought that a $1,000 contribution was enough to raise money for a candidate, make your statement, and not be so large as to bribe someone. that was changed by congress a

couple of years ago and updated with an inflation adjustment to $2,400 per person. we have this balance of interests here. people want to support and elect candidates. members of congress desperately need money for increasingly expensive campaigns. the only people that can give them are individuals. so, you have this tension between the need to raise money and finance campaigns with the danger that you wind up with legalized bribery. that attention is particularly strong in a situation where someone is a registered lobbyist and they want very particular legislative results

from specific members of congress. under the current system they can raise money for that member, make them indebted to them, then the clear they need help but bill. -- then they can declare that they need help on a bill. host: what did you say about your marks? -- earmarks? caller: our concern is that they are the most direct way to benefit an individual or company. it is one thing to do health care legislation that affects an entire industry. another to put something in a bill that says the department of defense shall purchase the xyz weapons system from a particular company. we have urged congress to do whatever they can to separate those. we have said that lobbyists should not be entitled to raise money or give money themselves to members of congress from whom

they are seeking a specific your mark on behalf of a specific client. as you know, one of the principles of the lobbying firm was going out and raising money. in his case he was falsely claiming that the money came from the range of individuals. he was seeking your marks on behalf of their clients. host: we have this twitter comment. host: independent line, california. caller: would it not make more sense to put the rules on to the members of congress? it would be far easier to have a government watchdog groups look

over the accounts and disclosures made by members of congress rather than by thousands and thousands of potential lobbyists. i do not understand why the rules have been made for the lobbyists rather than members of congress. these rules should be applied to them. they cannot accept gifts in excess of such and such an amount. why are you not looking at the members of congress? guest: there are two answers. first, on the restrictions of campaign fund-raising, you could put that on the members of congress and their campaign committees. you could say that if someone has lobbied you within two years, you may not use them as a fund-raiser. you could do that. i think that on the other side

of our proposals, which have to do with this closure, we spent a lot of time talking about who should disclose. we thought the most practical way was to use the lobbyists. first of all, you are only talking about paid lobbyists. if you are paid to lobby, part of what you will be paid for is to keep track of this. that seems fair. on the other hand, members of congress and their staff are not paid to record every single contact that they have with everyone. if you speak to a member of congress they will say they did not want to accidentally violate the rules or the law by passing someone on their way to a vote at a dinner and then realize that a lot being contact the i should write down and report on, practically speaking it would be very difficult to get members of congress to say that it is their

job to report every public contact. we thought the better solution was to have the lobbyists do the reporting period host: michigan, good morning. -- what according. host: michigan, good morning. caller: i do not know if you read the got bad that i put in "the washington times -- op-ed that i put in "the washington times," but are you looking at the lobbying in the administration? congress passes laws to help to repair this and that for public safety, and a tremendous amount of lobbying with the same kind of pressure and gifts from the administration, i would encourage you to look at that

also. guest: the answer is yes. our recommendation is that the same kind of public disclosure needs to occur in the executive branch. you are right, when congress passes a law like this, it is often very broad. people have to make those decisions and they are subject to lobbying. the obama administration has not been focusing on that in terms of requiring more disclosure than past public context. in fact they have gotten criticism for overdoing it him for having lobbyists from speaking to members of the administration and stimulus spending to avoid the proposals you are talking about. but lobbyists said if everyone else can talk to the administration, why can we not? the key is to have public disclosure of those contacts.

host: what is the political reality of these laws? this is the survey from "usa today." what should congress do this year? host: lobbying did not appear to be an issue in the 2010 election. guest: first of all, all of the issues you mentioned, except afghanistan, are huge lobbying magnets. it is inconceivable that you could have a major tax overhaul without every lobbying interest in the country trying to be in the room. because they are directly

affected by it. the tea party argument is that the government has gotten so big, everyone has an interest in what it does. which is true. the energy bill. we drive cars. we have windows. we think about solar panels for the roof. all of those issues, all of those issues are political interests with enormous lobbying power. they are affected by what happens. i think, given the list in front of congress, given the size of government and the amount that it deals with, it is particularly important that people have come for that lobbying is being done in a way that is not unfair. it ought to be a public priority. i think that i argued that part of the election results and the tea party movement is that pretty much everyone feels they should change the way the business is done in washington.

i will not try to change public opinion, but we are looking at a group of professionals who say that it is our view that this is a subject that congress should address to deal with the business before it. i think that you and members of congress feel that there should be some changes. host: more information can be found on the web site abane t.org. jacksonville, good morning. caller: is this expenditure going to come together? i was talking to karl rove and i wanted to rescue a question.

host: go ahead. caller: karl rove, is the lobbyist? he came in with sarah palin to start the tea party. after the election last november they had 200,000 votes for our good man, ted strickland. and they said that karl rove was out bringing in a lot of folks from overseas. i am wondering if that is connected. can he do this and take out ohio like he did? host: karl rove was reported to be one of the leaders of one of the outside groups that spent a lot of money in this election to have television advertisements

in targeted states. i will not know if he was involved in the governor's race in ohio. clearly we know that in 2010 both sides spent a huge amount of money trying to change both congress and the governorships. partly because this is the year that will start with congressional redistricting. they were particularly important in terms of deciding how states like ohio are going to be affected. host: michigan, republican line. caller: thinking about this subject this morning, are the election laws related to lobbying? it seems to me that when a group of people or lobbyists, as we are talking about this morning, it seems like they would be on the front end of their agenda.

is there any way to persuade those for to do the people to get into office? they are talking about the 2012 presidential election, talking about $1 billion being spent on that. i hate to say that it seems corrupt, but it does have that feeling that it has gotten so out of hand. guest: those are both good points. something that we all were about as citizens. in terms of the way that lobbyists interact in campaigns, my experience is that lobbyists do not want to spend money on challengers. first of all, if they're running against an incumbent, they might get angry. second, they not -- they might not win.

the particles have been written recently about major corporate taxes to support incumbents that lewis, turning around and giving money to the winning republican challenger. which is central -- which is a sensible move if you want to be in the good graces of congress. trying to separate the link between raising money for candidates and lobbyists. a lot of the money will be -- i think the $1 billion estimate was just for the presidential campaign. it might be simply what is that the loan by president obama. there is a huge amount of money being spent. one of the questions that we need to talk about as a country

is making sure that everyone's voice is heard. how do we make sure that members of congress do not spend all of their time trying to raise money rather than worrying about the issues we are sending them to washington to worry about. what are the alternatives for spending money in federal elections? as a country we will have to be talking about it. host: as the commissioner chairman from 1991 to 1995, taking a look at federal lobbying laws, in that you talked about oversight over ethics lobbying rules. who has oversight now? who should have it? post of the congress itself, the secretary and clerk of the house, those of the ones that

get the reports and are required to put them on the public record. that is all that they can do. if there is someone that does not file or they think that something is wrong, they are required to send them to the department of justice for potential criminal review. which sounds serious. the problem is that the department of justice is dealing with terrorism in guantanamo, tucson, criminal lawyers do not have time for it. there have been thousands of referrals. literally thousands of referrals from congress to the department of justice under the lobbying disclosure laws saying that something is wrong here. as in absolutely no actions taken by the department of justice. one of the things that we did was talk to the department and ask -- what is going on? they said look, this is not in

the wrong place -- this is wrong place. and forcing the campaign finance rules, the proposal is that congress will be giving this to the civil division of justice, which has resources and even focused on the same criminal issues on which they might do a better job. we need an answer. what happens is we're only taking a year or two to realize that nothing happened. and then people forget to file completely. host: washington, d.c. good morning. caller: my question goes back to foreign actors using lobbyists to influence petitions on congress.

looking at these middle eastern countries, what are the specific laws that govern against that. is that not like treason? you're acting as an agent for a foreign country. guest: unless you are at war with someone, my understanding as it is -- is that it is not treason. however, there is another law that directly regulates that. it has an interesting history. it was passed by congress in the 1930's because the concern was that not see germany was spending money in the u.s. for propaganda publishing magazines.

payment to a u.s. citizen to influence legislation, if that is going on those people are required to report to the department of justice. where does the money come from? what are you doing, specifically? in terms of what a client is a must be careful of, you could buy and practice very seldom get pursued under this registration. in terms of foreign government

activity it is a much simpler wolpe -- simpler lot. host: entered, independent line. -- andrew, in the pan and line. caller: what is your feeling about corporations getting large amounts? guest: citizens united was a decision of the supreme court last year. personally, i thought it was a mistake. by had signed a brief with other people that were active in this area, urging other people not to do. that the court could have, allowing that particular group, a nonprofit organization without

having to open the floodgates, which they did, to every corporation for profits. but spending unlimited amounts in elections. what we are doing is increasing the amount of money spent, as an earlier caller noted. the question then becomes -- how do you raise the money to counter the upside? that will bring us back around to what we do about our campaign finance system and getting money into the system without members of congress spending all of their time going out and raising into being beholden to donors. i thought that the citizens united decision by unfairly ratcheted up the citizens united race. host: john, good morning.

caller: the american people have been pushed into a corner. it has gone to the point where, to me, many more things are going to be happening. people pushed into corners where other things are going to happen. the shooting that happened not long ago, to me it just seems like slavery. this is like letting the wolf in the henhouse. if congress can only do their job for a certain amount of time and then they have to go out to get their constituents to get money. if you take money out of the deal, i think that more of the american public could be heard. when you have these corporations lobbying copper when does the small business come in?

host: lots of good points there. central to what our task force was looking at and what we want to be talking about. the practical answer to your question is that they do not have the resources to hire their own lobbyists. so, they would probably go to a trade association with other small businesses. and then they wind up fighting internally and those trade associations wind up fighting with each other. small businesses have different agendas. everyone winds up being a so- called special interests. if you belong to aarp there is a big of a lobbyist. there are groups that lobbied for student loans. whatever age you are, there is

someone out there lobbying on your behalf. it is important to draw a distinction between lobbying and interests affected by government. on the money side, campaign finance raising, our task force has taken a smaller step. people that are lobbying members should not be out raising or bundling money for them. down the road is what do we do about the entire campaign finance system that we have. that is something not address that is beyond. host: market, republican line. go ahead. caller: my question is about larger corporations. and i know that they are only allowed so much money that they can spend for lobbying.

but you have got the unions taking of bits and pieces, individuals have been in their minds in the unions. it has been in their minds, focusing on a certain person. i think that is corrupt. i want your opinion. host: anyone can spend an unlimited amount of lobbying. including corporations and unions. what we are focusing on his disclosure of spending. in terms of campaign spending, the supreme court in this citizens united decision last year said that there can be no limits to corporations and unions in terms of spending were electing who they should vote for. everyone has the ability to spend what they want.

the only limits left about what they can directly give to candidates has to do with going out and spending it on radio or television advertisements. unions urging their members who to vote for, which corporations can do if they choose. host: trevor potter, thank you for talking to our viewers this morning. guest: thank you for having me here. host of the debate for repealing the health care law gets underway today in the house. also look for coverage of the chinese president's visit to the united states. he is arriving today for an four day visit. thank you for watching today. we will see you tomorrow. ♪ [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] cable satellite corp. 2011]