amendment, that $3 of tax liability by checking that box, that citizens would be able to check that box and voluntarily make a donation in the same amount to the presidential election campaign fund. what's important here is not whether a president uses the fund or doesn't use the fund. what's important is to preserve the opportunity for the average american to have that speech and the opportunity to say loud and clear that they support clean, good, and fair elections. and my amendment instead of eliminating the entire program lets americans make a donation out of their own pockets. good government groups are against the underlying bill, such as the league of women voters, common cause, democracy 21, public citizen, and rather than eliminating the public

financing system, we should be working together in a bipartisan manner to reform it and improve it. now, i understand that a point of order is being reserved against this bill because c.b.o. has scored my amendment as saving only $400 million over 10 years and while the underlying bill saves $600 million, and so i think that given that my bill does contribute to deficit reduction, we shouldn't throw the baby out with the bath water. but understanding, mr. chairman, that a point of order has been reserved, i would ask that the amendment be withdrawn at this time. the chair: without objection the amendment is withdrawn. are there further amendments to the bill? the gentleman from colorado. >> i have an amendment at the

desk. the chair: the clerk will designate the amendment. the clerk: amendment number five printed in the congressional regard, offered by mr. polis of colorado. the chair: the gentleman j ohio. >> i reserve a point of order against the amendment. the chair: the gentleman from colorado. mr. polis: this amendment will also allow for -- will prevent corrupt presidential campaigns and also allow for public saving. rather than end the program as has been proposed in the republican bill to fund presidential elections and reduce the influence of big money on our political system, this amendment would make the source of the voluntary individual donations for the presidential election campaign fund. it can be structured in such a way where the same amount of

money is saved because rather than, you know, when i looked into this matter, like many americans, i thought that the -- many people thought the $3 check off was additional money you pay on the tax form, it looks like it is. most people think it's additional. it's not. it comes out of the money you already pay. what this amendment would do, it would actually be an optional amount on top of the other amount you pay, so it would be an additional $3 or $5 or $10, and leave it open and allow people to designate how much money they would like to apply to fighting big money in politics. so with this approach, we can separate these two issues. one is an issue of fiscal responsibility, with which i think there's a strong bipartisan support for making cuts, even cuts to programs we hold dear, frankly, i'm a supporter of public financing, i'm a co-sponsor of the fair

elections act, but i'm fiscally responsible and would make cuts elsewhere. let's separate it out and say we can save the $520 million we need to save but allow the program of public financing to continue as a program that individuals themselves can choose how much to fund when they're filling out their taxes. i think that's a very critical component with regard to this. by not capping the amount of voluntary donation the amount of the fund could be improved. some taxpayers might dedicate $30 or $100, or $500. we would make it easy by empowering taxpayers to take on the moneyed interests. i do have a technical fix for the amendment that i would like to offer. this is all happening so quick, i will get that to you in a moment but effectively what this

would do is, as you know, as it's now structured, all the money is saved going forward and the existing money from the fund is returned to treasury. the amendment, certainly my intent was to do the same thing. there's some ambiguity about whether the existing money in the fund would be returned to treasury which is the intent of the amendment. i want to ask for unanimous consent to modify for a technical correction, a copy of the amendment i'm sending to the desk. the chair: if the gentleman could send the modification to the desk. if you haven't done that already. mr. polis: i thank the gentleman. the chair: we need a copy of the modification. mr. polis: it's on its way. if i can be recognized -- no,

we'll wait. the chair: while we're waiting for the thing at the desk, the majority may have objection to the unanimous consent request, does the gentleman want to start on his five minutes while we start this out?

mr. polis: i'll withdraw the request so i can continue with my time. may i inquire how much time remains? the chair: you have two and a half minutes. mr. polis: ok, well, so with regard to this amendment, it is designed to save the same amount of money because it does, obviously, it simply allocates the money both in the fund and i offer in terms of a clarification on legislative intent that it is the intent, there's nothing in the language of the amendment that precludes it, as well as any future funds that come in under the regular taxes that are paid, that allows for the fund in the future to be funded out of voluntary contributions. i think if opponents of presidential campaign fund want to end the program for budgetary purposes, my amendment gives a reason to maintain the fund. we can if you believe in the mission of public financing and fighting big money interests,

also be fiscally responsible by maintaining the fund. eliminating the fund would continue the trend of shutting out the public's voice in federal campaigns. again, i sympathize with the need to save $520 million, i support the need to save $520 million. that's a small beginning for what we need to cut but we can do so in a way that will allow this concept created in the wake of watergate to continue to exist and work and i reserve the balance of my time. the chair: the gentleman is under the five minute rule and you need to exhaust your five minutes. i worry about the fate of our democracy with regard to the impact of big money on elections and to get rid of public financing in presidential campaigns would inflict greater damage on our campaigns and on our democracy. the chair: the gentleman's time has expired. mr. polis: i yield back the balance of my time. the chair: does the gentleman from illinois insist on his

point of order? >> i do and i raise a point of order because it violates clause 10 of rule 21, known as the cut-go rule, it opposes increased mandatory spending without a decrease in violation of the rule mr. roskam: -- the chair: does anyone wish to address the point of order. mr. polis: i do. mr. is an ambiguity with regard to what happens to the money. i would press the point that the legislate intent is to allow the money that exists in the fund to be returned to the department of the treasury and we would be happy to work with the gentleman on a technical fix to the amendment that would make that clear. i would argue that it is already clear enough in the sense that it -- certainly nothing is prohibited in terms of returning that money. the formal scoring came back as saving at least, i believe, $422 million, which is all the money going forward.

so this is a question of $100 more or so now in the fund. the legislative intent is to return that to the treasury which would result in identical savings. we would be happenity pi to the gentleman's satisfaction and during the course of debate before the votes are called clarify that through a technical fix. the chair: does any other member wish to be heard? the gentleman from california. >> on the most recent clarification -- mr. lungren: on the most recent clarification, the intent of the legislation is to stop the program. not only will the funds be returned that are in there, but the program will not go forward and so therefore the administrative costs to the i.r.s. would be eliminated. the gentleman by continuing the program, increases the net cost because you will continue having the administrative costs that otherwise would be no longer in effect as a result of the

underlying bill. and therefore, the point of order would still be appropriate. the chair: does any other member wish to be heard on the point of order? the gentleman from illinois makes a point of order that the amendment offered by the gentleman from colorado violates clause 10 of rule 21 by proposing an increase in mandatory spending, pursuant to clause 10 of rule 21 and clause 4 of rule 29, the chair is authoritatively guided by estimates from the chair of the committee on the budget that the net effect would increase mandatory spending over a relevant period as compared to the bill, accordingly the point of order is sustained and the amendment is not in order. are there further amendments to the bill? then the unfinished business, pursuant to clause 6 of rule 18, proceedings will resume on the amendment on which further proceedings were postponed.

the unfinished business is the request for a recorded vote on the amendment offered by the gentleman from michigan, mr. peters, on which further proceedings were postponed and on which the ayes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment number 1 printed in the congressional record offered by mr. peters of michigan. the chair: those in support of a recorded vote will rise and be counted. a sufficient number having risen a recorded vote is ordered. members will record their votes by electronic device. this is a 15-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned verage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the system is voluntary. one line on your tax code. not complicated. and while not perfect, for most of its 36 years in existence, it has served this nation well. candidatesrom across the political spectrum, from ronald reagan to jesse jackson, have voluntarily participated in the presidential financing system. now, as a colleague on the other side mentioned, there is no doubt that the current law needs to be modernized. it needs to be fixed. we saw that in the last presidential election, but rather than throw out something that has served the country and the electorate well for 36 years, rather than throw it ou let's fix it. and mr. price from north carolina and i and others have introduced legislation to do exactly that. so rather than shielding an

avelampling of unlimited special interest money from public view, we should shine a light on it, we should do it by modernizing the presidential system and also pass the disclose act which we could have brought up and voted on except for the previous question was just defeated. mr. speaker, at the end of the day our naon's democracy doesn't belong to presidents or members of congress. it belongs to the voters who send us here. and we have a solemn responsibility to safeguard it on their behalf and protect it for future generations, from the lessons of corruptioin history, let's mend it, let's fix it, let's not throw it out. thank you, mr. speaker. the chair: the geneman's time has expired. the committee will rise informally for the purposes of receiving a message. will the gentleman from nebraska kindly take the chair? the speaker pro tempore: the house will be in order and the chair will receive a message. the messenger: mr. speaker, a message from the senate. the secretary: mr. speaker. the speaker pro tempore: madam

secretary. the secretary: i have been directed by the senate to inform the house that the senate has agreed with s. 3, honoring the service and sacrifice of staff sergeant salvatore giunta, a native of iowa, in the first living recipient of the medal of honor since the vietnam war. in which the concurrence of the house is requested. the speaker pro tempore: the committee will resume its sitting. choipt chair sees the gentleman from illinois on -- the chair: the chair sees the gentleman from illinois on his feet. are we going to go -- it will be the chair's inclination to represent the gentleman from california at this moment in time if you're going to do it all at the same time but the gentleman from california, mr. lungren. mr. lungren: thank you very much, mr. chairman. if it hasn't been requested already, i would ask that all members have five legislative days to revise and extend their

remarks. the chair: it's already been requested in the house. we can move on. mr. lungre mr. chairman, i rise today in support of h.r. 359 which terminates the taxpayer financing of presidential election campaigns and party conventions. at the outset i want to mention in response to something that was said by the other side, this is absolutely nothing to do with the citizens united case decided by the supreme court. that changed not one eye oata campaign finance law. corporations still cannot make contributions to campaigns or candidates. it does not change that. citizens united had to do with the question of whether or not one loses his or her first amendment protections of free speech, particularly with respect to expressions of political nature, merely because they associate with another person. the supreme court told us that you do not in fact lose your

rst amendment rights because you happen tsay it jointly with someone else. so, as a matter of fact, they pointed out that some people with the least amount of influence in a society actually expa their iluence in the political debate by joining with others. and then the question of the supreme court, that the supreme court answered was that if that association happens to be corporate in nature, happens to be anion, happens to be a for-profit, happens to be a not-for profit, whether that changes the dynamic of contemplated by the first amendment protections and they told us it did not. so let's g of that canarrd right abay. this has nothing to do with corporate contributions to campaigns ororeign contributions to campaigns both of which remain illegal with

criminal sanctions under the law. let's get that out of the way so we don't have a lot of debate that doesn't have anything to do with the bill before us. mr. chairman, we find ourselves at a unique juncture in the long standing debate over this issue but the reality it's a juncture no longer. taxpayer financing of presidential elections and party conventions, the two major parties is simply no longer defensible. the first tax liability contributions for american taxpayers to be diverted toward the funding presidential elections began 35 years ago in 1976. this new practice was as we were told by the other side, supposed to raise the public stress of the government and increase the number of candidates and thus electoral competition the financial footing between parties. i believe, mr. chairman, it has failed on all accounts. it did allow us to have lyndon larouche to be a participant in

the presidential elections. i'm not sure when we've had someone who had been subjected to a criminal conviction and conducted part of his campaign while still iarcerated, but that was brought to us by way of this fine law. in 1976 apprimately $1. billion -- since 1976 approximately $1.5 billion has been spent on this system. as we speak there is a balance of $195 million sitting in the presidential election campaign fund at the u.s. treasury department. and yet this system of leak torle subsidies has not changed the public's perception of our presidential elections or our politics. according to one survey after another, americans continue to harbor deep distrust of elect officials. does anyone think our presidential elections have shown a virtual progression towards more accuracy and more

honesty? mr. chairman, how many candidates, candidates who supposedly believe in the system, have opted out of this taxpayer financing scheme in recent years? in 2004 and 2008 several candidates declined public financing for their primary campaigns. anas was mentioned by the gentleman from illinois, during the most recent presidential election for the first time the nonee of one of o two major political parties withdrew from the public financing during the general election and instead went on to raise record amounts of money for his campaign and i recall when i thought we heard a pledge to participate in this program, because of the virtuous nature of the program. somehow that was lost along the campaign trail. in addition to presidential primaries -- one of the things i would like to point out is this -- there is this idea somehow we are going to be able to suppress money that goes into politics. the fact of the matter is it's like a balloon. a water balloon.

if you squeeze it on oneide, it has -- comes out on the other side. e question is, how do we get it within the system? we should be talking about the idea of this silly demarcation between our parties and our caidates, where we limit in extreme fashion the amount of money that can be transferred or coordinated, as if somehow that corrupts the candidate to have him or her identified with the very party they represent. we ought to be working towards those kinds of changes that will allow a greater responsibility on the party and the candidates to express their positions and toold to their positions be responsible for their positions. but no, we talk about these ways of how we're going to somehow reduce the impact of money in campaigns. it hasn't worked under this system. it hasn't worked. in addition to presidential primaries and general elections,

if there is anything the american taxpayer should not be subsidizing, i would say as much as i enjoy them, the weaklong presidential con vengeds. on our side of the aisle and our party i think we' had some indications i consider to be wasteful spending in preparation for our upcoming convention. and to say to the taxpayer that in light of that we ought to continue to subsidize the production of our presidential conventions by the two major parties is very difficult to articulate and even to understand. they are as i say grand fun, wonderful occasions, week long party gatherings that are unfortunately in this day and age largely symbolic. one can't even argue something important is being decided because unfortunately, they cease to have real significance some time ago. that was part of our effort to try and cleanse the system rather than having people

selected by delegates that come to con vengeds, we should move more and more to the primary operations. and of course then earlier and earlier in the season. so that somehow it becomes a two-year event. i guess we're already in that. taxpayers would be shocked if not outraged to discover they had been funding these extravagant photo ops. mr. chair, as i mentioned since 1976 approximately $1.5 billion has been spent on publicly funding our presidential primaries and general elections and our presidential party conventions. the american taxpayer has paid enough for this unwise experiment. i think it should be ended and the balance of the presidential election campaign fund and the presidential primary matching payment account returned to the treasury to be used for deficit reduction. i think we'd have the american people cheer us for that. according to the 2010 congressional budge office estimate the elimination of this program would save american

taxpayers $617 million over the next 10 yrs. now, somecan say well, that's your opinion, we have our opinion, why change things? why don't we look to the opinion of the american people? not a bad idea in this house. simply put, this program does not have the support of the americ people. taxpayer support has declined precipitously over time. i remember years ago i thought it was a good experiment. i thought it was a good idea. i checked off as some of my taxes to go to this program. i was in hopes that it would actually prove to be a good change. i, like most americans, though, who contributed to that in the past have given up on the program. we don't believe it gave us what we thought it might. in 1980, for instance, the percentage of taxpayers participating through their tax form checkoff was 28.7%. it was so popular that in 1985 it was 23%. it proved so zphelf 1990 it was

19.5%. it -- boy, it proved itself by the year 1995 because then 12.9% the american taxpayers decided they'd participate. in the year 2000, it dropped to 11.5%. in 2005 it was 9.1% and according to the irs data obtained, the checkoff rate in 2010 was 7.3%. in other words, on a direct vote, a plebiscite taken by the taxpayers of america, 92.7% reject the motion. where i come from, that's a landslide. i think even in chicago it would be a landslide even if you 35eud your taxes onl once. mr. chairman, this candidate and convention subsidy is obviously unpopular. to paraphrase one former member of the federal election commission, quote, any system of public financing must have popular support to succeed. today's low taxpayer checkoff

rates cast serious doubt on whether the public financing system has the support. when only one in 13 taxpayers are participating, it's very difficult to conclude tha the public financing system has broad popular support. mr. chairman, as we promised in the pledge to america and as we promised here on the floor during these initial weeks of the 112th congress and as we have verified by our transparency enhancing rules package, our bipartisan votes to trim congress' budget and end excessive congressional printing, by a determination to return to scr discretionary spending to fiscal year 2008 levels or less and now through there bill the republican majority is committed to fiscal stewardship, to having a relentless eye on waste waste and inefficiency and reduce ending, to create private sector jobs and produce meaningful legislation that makes long lasting reforms.

mr. chairman, if we in fact mean what we say when we we say we are willing to look at those programs that already exist and to judge whether or not they have proven to be efficacious or efficient or successful in promoting the principles that underlay the passage in the first play, we ought to start withhis. this is a program that almost 93% of the american people who pay taxes reject. and we're asking them to participate. maybe we ought to listen to what they are saying and instead allow the savings garnered by this particular bill to go towards deficit reduction. this bill introduced by our colleague from oklahoma should gardener bipartisan support, we should thank him for introducing it and i do, and to his commitment to responsible stewardship of taxpayer dollars, i urge my colleagues to understand what this bill is and what it is not and support h.r.

359 and with that, mr. chairman, iould reserve the balance of my time. the chairman: before regnizing the gentleman from pennsylvania, it was the chair's understanding perhaps the gentleman from washington would like to consume some of the ways and means time and then ask permission to give the rest of his time to the gentlemafrom pennsylvania. if that understanding is correct the chair would recognize the gentleman from washington. >> i would like to yield to the chairman of the oversigh committee, the ranking member of the oversight committee such time as he may wish to use in answering mr. lungren. the chair: which one do you want to use, your time or unyour time? the gentleman from pennsylvania is recognized on his own time. >> thank you. it's my pleasure to deal to the member of the house administration committee, ms. lofgren. the chair: the gentlewoman is recognized for three minutes. ms lofgren: i rise in opposition

to h.r. 359. this will will unnecessarily eliminate the $3 checkoff box that's voluntary on returns to fund presidential campaigns. the bill has been fast tracked by the republican leadership without any hearings, no markup, no respect from committee process. as a member of the house administration committee and a former chair of the subcommittee on election i'm very concerned by the end run around our committee and the lack of deference shown to the committee and its members. speaker boehner promised two weeks ago when he took the speaker's gavel more transparency in the legislative process and to focus on job creation. last week, the new majority fast tracked the health care reform repeal bill. this week, they expedite the

repeal of this voluntary program without the proper process, so i think e speaker may need to revisit his statement about process and transparency. in addition, to the process concerns, i question the need for congress to pass this bill at all. i was here as a young staffer when the judiciary committee took up the impeachment of president nixon. it's worth remembering that the public finance system was created as a direct result of the watergate scandal. remember phillips petroleum, they legally contributed $498,000 to the nixon campaign or luth ruth farkass who gave $300 to the nixon campaign in explicit exchange for an ambassadorship to luxembourg or the tapes that revealed john

connolly shipped down dairy farmers for $600,000 in contributions in exchange for raising price support to the detriment of children who needed milk around the country. these incidents eroded public confidence not only in the nixon administration but this the entire system and in response pursua to the general welfare clause of the u.s. constitution, congress passed sweeping election reforms, including the presidential checkoff system. now, i would not argue that this system is perfect at this time. i think it does need reform. but i think mere elimination without a committee process is a huge mistake. i would hope that the committee could convene, that we could sorthrough what are the problems with this current system, how do we fix them, work in a bipartisan way to create the fixes and then come to this

house for the solution. so much for your time.

guest: thank you. host: on the senate side, senator charles grassley joins us. i wanto begin where mr. van hollen left off. that is what the president had ognized for five

minutes. mr. roskam: thank you, mr. speaker. the house is not in order. the speaker pro tempore: the gentleman is correct. please remove all conversations to the clock ream -- cloakroom or somewhere off the floor. the gentleman may proceed. mr. roskam: thank you, mr. speaker. there's really no sense of irony here, is there? that the proponent, the

self-described proponent of transparency and openness in the twinkling of an eye before a vote on an adjournment day come over and say, there's your motion to recommit? this was posted online, mr. speaker, on thursday of last week. the proponents, and this is a modified open rule, the proponents have had an opportunity, mr. speaker, on friday to file a motion, to file an amendment, on monday to file an amendment, on tuesday to file an amendment, but the very described people who are now cloaking themselves in a mantle of openness and transparency say, there you go. moments ago. ok, that's the program. i get the program. what is this ultimately all about? there is a sincere effort on the part of this majority, and i think some folks on the minority as well, to take the president up -- mr. speaker, the house is not in order.

the speaker pro tempore: the gentleman is correct. the house is not in order. once again, please remove all conversations from the floor. the gentleman may proceed. mr. roskam: thank you, mr. speaker. there's a real attempt on the part of proponents of this bill, mr. cole of oklahoma, to try and save money. to look out over the entire course of this budget and all of these challenges and mr. cole and the folks that are behind h.r. 659, the underlying bill, are ultimately saying, we can save $617 million over a 10-year period. mr. speaker, that's according to the c.b.o. so, it comes down to a very simple thing. if you want to save the money, you defeat the amendment. if you want to play games on the day that we're all heading out, trying to act like you're full of transparency and openness,

when -- >> mr. speaker, parliamentary inquiry. the speaker pro tempore: the gentleman from illinois has the floor. mr. roskam: i urge a no vote and i yield back the balance of my time. the speaker pro tempore: the gentleman yields back. >> parliamentary inquiry. does the underlying bill cut spending? does motion cut spending? the speaker pro tempore: parliamentary motion. mr. walz: no further questions. the speaker pro tempore: without objection, with all time having been yielded back, the previous question is ordered. the question is on the motion to recommit. those in favor say aye. those opposed, no. the noes have it. the gentleman from minnesota. walswals on that i demand the yeas and nays -- mr. walz: on that i demand the yeas and nays. the speaker pro tempore: the yeas and nays are requested.

all those in favor of taking this vote by the yeas and nays will rise and remain standing until counted. a sufficient number having arisen, the yeas and nays are ordered. members will record their votes by electronic device. pursuant to clause 9 of rule 20, the chair will reduce to five minutes the minimum time for any electronic vote on the question of passage. [captioning madeossible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercialurposes isxpressly prohibited by the u.s. house of joins

us. i want to begin where mr. van hollen left off. that is what the president had to say on taxes. i want to show our viewers what the taxes said when it comes to lobbyists and the tax code. >> over the years, a parade of lobbyists has benefited companies and industries. those with accountants or lawyers to work the system can end up paying no taxes at all. the rest of us are hit with one of the highest corporate tax rates in the world. it makes no sense and it has to change. [applause]

tonight, i am asking democrats and republicans to simplify the system, get rid of the loopholes, and level the playing field. use the savings to lower the corporate tax rate for the first time in 25 years. host: senator grassley, what is your reaction? guest: i agree with the president. there are many in this town that go to sophisticated ways to think up and even a copyright and patent certain tax principles in a bill coming up that senator leahy and i introduced, we want to do away with that. he is absolutely right. there is an industry. you have an indtry that benefits from it. do not forget that you created an industry that got this stuff up. the president is -- the

president did not say this, but he is calling for reducing the marginal tax rate on corporate taxes. we are the second highest corporate tax rate all around the world. that makes us very un competitive. there's a principle of law that the president did not express. it says that when you lower marginal tax rates, you broaden the tax base. that's basically what the president is asking us to do. the on thing i would disagree with the president on, if he is saying that to bring in more revenue, you should not be increasing taxes during a recession,ut particularly -- you knowhe old principle. if you increase taxes, you get less of it. if you want to increase employment, you do not increase taxes on the people that provide jobs in america. host: the president said that the wealthiest americans could

sacrifice a ltl and pay higher taxes in order to tackle the deficit so that we can start to make a dent in that situation. guest: you are bringing up another item. what the president was talking about was the corporate tax rate. you are bringing up about the individual tax rate and that is a legitimate point for you to bring up. i think we discuss that when we get out of the recession. ere's a principle that even the president agreed with in 2009 that when you are in a recession, you should not increase taxes. he ran in 2008 on a platform of increasing taxes on higher income people. before he was sworn in, he announced -- we are in a recession an cannot increase taxes during a recession. i would remind the president

that the same principle applies. let's talk about it after we get out of a recession. you should not increase taxes while you're in a recession. host: senator, we heard a lot about the overhaul of the tax code. what did you make of that? guest: that is a continuation o the discussion you and i just had. it follows along the lines -- the president is taking off from wh his own debt reduction commission has suggested. you get into the same principle we jt talked about. we need to reduce the corporate tax rates. we need to have fewer brackets. we need to have lower brackets. when you reduce tax rates, you can broaden the tax base. exactly which one of those you pick and choose or do you do away with all of them -- that will have to be a point of discussion when you get down to the finite issues of what

exactly to eliminate. there's a couple sensitive ones that are very difficult to deal with politically and economically. one of those deals with the charitable this -- charitable production. the other is the home mortgage production -- mortgage reduction. host: james on the line for republicans. go ahead. caller: senator grassley, what do you think about the president's comment last night about education and the public schools? guest: i will tackle it from one. of spending money and another point that does not cost any money. it is probably more important than anything the president said. in the last two years, he said this two or three times. i wish he would say this every

day. he said that the most important thing we can do to further education is for parents to be more involved in the education of their kids. education is important. book learning is more important th television. homework is more important than television. parents ought to make sure that the teachers work that they send home gets done. the teachers are not in the home. weekends are not something just for relaxation. if you look at how education is in asia -- they are running away with us in science and math. you find out that they do a lot of studying on the weekends. we do not seem to ehasize that in this country. i feel strongly about what the president said. i agree with him. i wish the president could tell me how i can help him promote that. i would like to.

the second issue involves money. i think we have to look at different costs of money spent on education around the country. a kind of tells you that money is not a total solution to the problem of education. in washington, d.c., they spend maybe $13,000 per student free look at what they spend in iowa. they spend maybe $8,000 per student. you would think that if you spend more money you get better education. no. kids do not graduate from high school year. the ones that graduate -- a lot of them are functionally illiterate. you don't find that in cedar falls, iowa, as an example. we need to look at how we are spending money in education and not just throw money at it. host: let's listen to what the president had to say about education.

>> raced to the top is the most meaningful reform of our public schools in a generation. for less than 1% of what we spend on education each year, it has led 40 states to raise their standards. these standards were developed, not by washington, but by democrats and republicans across the country. race to the top should be the approach we follow this year as we replace no child left behind with a law that is more flexible and focused on what is best for our kids. host: your reaction to the state of the union. we are talking to charles grassley. baltimore, maryland. eric on the line for independents. good morning. caller: good morning. you are one of the few republicans i really respect in congress. i keep hearing how president obama has spent more than any

other president. we have to look at the reality of things. when he came into office, he basically came in trying to clean up the mess that bush made. he bailed out the banks. he gave tax cuts to the richest 1%. if you look at the dow jones, they are almost at 12,000. they have money. they are not investing. they're sending business is overse. to keep perpetuating that obama spend this money crazily -- i do not want to hear that. that is rhetoric and politics. host: let me read a tweet that echoes of that caller. guest: those statistics and that tweet are wrong. it went from 37 million.

it is back to 38 million. whoever said that bush did not create any jobs, they better go back and look at the statistics. the caller fm maryland who -- just who -- from maryland that just finished -- i would like to say i agree with a lot of what he said. a lot of wear president obama -- obama getstpresident hit legitimately -- the last years has accumulated almost $4 trillion in debt. that is over the last two years. that's compared to $10 trillion over the last 225 years. maybe things president obama thought he should do, like the stimulus bill and increasing

appropriations the last two years by 22% -- i think he thought he was doing well, but it just did not work. it add a great deal to the deficit. host: here is an e-mail from a viewer. she says this. guest: well, first of all, we would say that for a period of time, yes, the government can spend when consumers are not spending -- to fill a vacuum. there was a legitimacy to that. the point is that what was spent

did not do what it was supposed to do. that $814 billion tt went into the stimulus package, you get to a point where only 1/2 of 1% of that went into a small business. small business creates a 72% of new jobs. more of it should have been put into small businesses. government consumes well, but government does not create wealth. only about 3% went into building roads and other infrastructure. more should have gone into that, rather than just spending the way congress traditionally spends. on the taxes that the person brought up ini would be willingr raisingaxes if it went to the bottom line. in other words, a dollar raised went to a dollar reduction in the deficit. but there are several studies over the last 30, 40 years, and

maybe even 50 years, that show that when congress increases taxes, it is a license to spend $1.15. that is the lowest figure. there are some that go to $1.69. so i use the lowest figure of $1.15. that increases the deficit. so what we have to do is make sure that the problem then is on the spending side, not on the taxing side. that is kind of where we are. it is like a dog chasing its tail. host: with the president said -- talked about making these types of investments, do you see middle ground between democrats and republicans? guest: i think so. you'll find that later this year, in the transportation bill that comes up. it should have come up two years ago, but because of the

recession, you cannot increase taxes during a recession. it has been extended from five years ago. but i think we will get to a point where we will have a major debate on infrastructure this year. host: let's go to nashville, tennessee. catherine joins us on the republican line. caller: good morning. i wanted to ask -- well, me and my husband are small business owners. we own a small business.

the speaker pro tempore: the yeas are 239, the nays are 160. the bill is passed and without objection, a motion to reconsid is laid upon the table. for what purpose does the gentleman from ohio rise?

>> i ask unanimous consent to remove co-sponsors from h.j.res. 22. the speaker pro tempore: without objection, so ordered. the gentleman will suspend. the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir, this letter is to notify you as of close of business today i am resigning as the ranking member of the committee on ethics. signed sincerely, zoe lofgren, member of congress. the speaker pro tempore: without objection, the resignation is accepted. the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir, this letter is to advise you that effective today i am taking a leave of absence from the committee on small business

until my tenure on the committee on the budget is completed. it is my understanding from clause c of rule 19 of the zphickclalk us rules referenced blow i will continue to accrue seniority during the leave of absence at the same rate as if i had continued to serve on the committee on small business. rule 19 clause c and a member of the committee on the budget shall be entitled to take a leave of absence from service on any committee or subcommittee during the period he or she serves on the budget committee and seniority rights of such member on such committee and committee to which such member was assigned shall be fully protected as if the member had continued to so serve during the period of the leave of absence. accompanying this letter is a letter from the democratic leader verifying that my seniority on the committee on small business will continue to accrue during my absence. thank you for your attention to this matter. signed sincerely, heath shuler, member of congress.

the speaker pro tempore: without objection, the resignation is accepted. for what purpose does the gentleman from california rise? >> mr. speaker, by direction of the democratic caucus i offer a privileged resolution and ask for its immediate consideration. the speaker pro tempore: the clerk will report the resolution. the clerk: resolved that the following named members be -- mr. becerra: i ask unanimous consent that the resolution be considered as read and printed in the record. the speaker pro tempore: without objection, so ordered. the resolution is agreed to and the motion to reconsider is laid upon the table. pursuant to clause 11 of rule 10, clause 11 of rule 1, and the order of the house of january 5, 2011, the chair announces the speaker's appointment of the following members of the house to the permanent select committee on intelligence.

the clerk: mr. ruppersberger of maryland, mr. thompson of california, ms. schakowsky of illinois, mr. langevin of rhode island, mr. schiff of california, mr. boring of oklahoma, mr. gutierrez of illinois and mr. chandler of kentucky. the speaker pro tempore: pursuant to section 5880 and 5581 of the revised statutes, 20 u.s. code, and the order of the house of january 5, 2011, the chair announces the speaker's appointment of the following members of the house to the board of regents of the smithsonian institution. the clerk: mr. johnson of texas and mr. latourette of ohio. the speaker pro tempore: pursuant to 22 u.s. code 1928-a, clause 10 of rule 157bd the order of the house of january 5, 2011, the chair announces the speaker's appointment of the following members of the house to the united states group of the nato parliamentary assembly.

the clerk: mr. turner, ohio, chairman. mr. shimkus of illinois, mr. shuster of pennsylvania, mr. miller of florida, mrs. emerson of missouri, ms. granger of texas and mr. bilirakis of florida. the speaker pro tempore: pursuant to section 4-a of house resolution 5 112th congress and the order of the house of january 5, 2011, the chair announces the speaker's appointment of the following members of the house to the house democracy partnership. the clerk: mr. dreier, chairman, of california. mr. fortenberry of nebraska, mrs. biggert of illinois, mr. conaway of texas, mr. buchanan of florida, mr. boustany of louisiana, mr. wilson of south carolina, mr. roskam of illinois, mr. crenshaw of florida, and mr. diaz-balart of florida. the speaker pro tempore: pursuant to section 201-a-2 of

the congressional budget and impoundment control act of 1974 2 u.s. code 601 and the order of the house of january 5, 2011, the chair announces that the speaker and president pro temprary of the senate hereby jointly appoint douglas w. elmendorf of the director of the budget office for the ferm term expiring -- term expiring january 3, 2015. the chair will entertain requests for one-minute speeches. for what purpose does the gentleman from pennsylvania rise? >> mr. speaker, request unanimous con sent to address the house for one minute. spoment -- consent to address the house for one minute. the speaker pro tempore: without objection, so ordered. mr. bishop: mr. speaker this week -- mr. thompson: mr. speaker, this week is national choice week. students, parents and legislators from both parties in varyingying walks of life from

across the common wealth came together for state choice in the state capitol. quality ed -- meanwhile, those that defend the status quo claim that if we just do more of the same, at some points schools will improve. mr. speaker, throughout the laboratories of democracy in this great nation, concerned parents are moving forward with the different vision which is better for our children. so as we continue in this new 112th congress, let's make a commitment for america's parents that they will not be forced to send their children to low quality schools without other choices. let's provide parents with options, whether they're public, private, charter, home or cyberschools, for the education that's the best fit for their children. children don't have the luxury of waiting for change. for today's students, reform only works if it takes place while they're in school. i'll do my part here in washington to support their efforts, not just this week but always in order to ensure that each child has the opportunity to live up to his or her individual learning potential.

i yield back. the speaker pro tempore: the gentleman's time has expired. the gentlelady from texas. ms. jackson lee: ask to address the house for one minute. the speaker pro tempore: without objection, so ordered. ms. jackson lee: thank you very much, mr. speaker. just a few minutes ago, this house voted to eliminate one of the anchors of democracy, allowing americans to check off on their i.r.s. filing form $3, just $3, to promote and support the democratic process of electing the president of the united states. all in the name of deficit reduction. but deficit reduction doesn't work without a plan. it doesn't work without thinking about the many state departments of transportation who can no longer fix the highways and freeways in your community or to promote rail mobility in order to take cars off the road. or in fact to keep the doors of community colleges open or to support primary education while state legislatures are struggling to find resources to provide for teachers and

students. so let me say this, i want to work with you on deficit reduction. in fact, i've done it before. but not without a plan. and i believe that investing in the infrastructure of america is a plan that will allow jobs to be created. that's the serious way of dealing with moving america forward, allowing for the genius of america, having a plan that responds to building america and not making false projections about saving money. i yield back. the speaker pro tempore: the gentlewoman's time has expired. for what purpose does the gentleman from colorado rise? without objection, so ordered. >> thank you, mr. speaker. i rise today to honor sheriff james a. alder don. sheriff alder don served as sheriff of my congressional district from january, 1999, until his recent retirement. the sheriff served the state of colorado in various capacities prior to becoming the sheriff. resume includes time working for the colorado bureau of investigation, colorado state

university, the police department as well as the steamboat springs police department. his career is with a shining example of dedication to the state of colorado. in addition to having a great sense of humor, he's a leader. he has great respect and gives his colleagues great respect. mr. gardner: he would incorporate all employees into the decision making process i go bisk -- by giving them the respect and authority they deserve to identify problemsed a correct them. as his lasting legacy, he implemented the police department's motto of serving with the acronym pride which stands for professionalism, respect, integrity, duty and empowerment. the sheriff embodied these virtues throughout his career. he also personified those virtues on a personal level. it's my great honor to stand here on the house floor honoring the sheriff and thank him for his service. i yield back. the speaker pro tempore: the gentleman's time has expired. are there any further one-minutes? seeing none, the chair lays before the house a personal request. the clerk: leave of absence

requested for mr. doyle of pennsylvania after 1:00 prime minister today. -- 1:00 p.m. today. the speaker pro tempore: without objection, the request is granted. pursuant to 15 u.s. code 1024-a and the order of the house of january 5, 2011, the chair announces the speaker's appointment of the following members of the house to the joint economic committee. the speaker pro tempore: mr. brady of texas, chairman. about mr. burgess of texas, mr. campbell of california, mr. duffy of wisconsin, mr. aimagine of michigan, mr. mull veiny of south carolina -- mull veiny of south carolina -- mr. mull veiny of south carolina. the speaker pro tempore: for what purpose does the gentlelady from california rise? ms. woolsey: mr. speaker, i ask unanimous consent that today following legislative business and any special orders heretofore entered into, the following members may be permitted to address the house for five minutes, to revise and extend their remarks and include therein extraneous material.

mr. mcdermott, washington. mr. green, texas. al green. ms. wasserman schultz of florida. ms. woolsey, california. mr. higgins, new york. ms. kaptur, ohio, mr. defazio, oregon. the speaker pro tempore: for what purpose does the gentleman from texas rise? mr. poe: mr. speaker, i ask unanimous consent that today following legislative business and any special orders heretofore entered into, the following members may be permitted to address this house, revise and extend their remarks, and include therein extraneous material. mr. pitts for today for five minutes, mr. royce toffered for five minutes, mr. fortenberry today for five minutes. the speaker pro tempore: without objection. for what purpose does the gentleman from ohio rise? >> address the house for one minute. the speaker pro tempore: the gentleman is recognized for one minute. >> mr. speaker, as elected officials all of us who serve in this chamber have the honor of representing our constituents in public service. and as officials we are also

fortunate that some of our best and most able americans choose to serve their nation and their communities by working in our office as congressional staffers. in my office i have a staffer who is leaving that i wanted to recognize here today. mike first began working for me when i served as mayor of dayton and has continued to work for me and the best interests of his community for the greater part of 12 years now. mr. turner: mike is a native of ohio and a graduate of selina high school. he's held literally almost every single position in my office, having served as scheduler, communications director, legislative assistant, military legislative assistant, legislative director, acting chief of staff and finally district director. he leads his fellow staffers by example. i ask my colleagues to join me in thanking mike for his tremendous service and huge sacrifices that he has put into public service. mike, we wish you all the best in the near future and your endeavors.

thank you. the speaker pro tempore: the gentleman's time has expired. under the speaker's announced policy of january 5, 2011,, and and you previous order of the house, the following members are recognized for five minutes each. mr. mcdermott, washington. for what purpose does the gentlelady from california rise? ms. woolsey: mr. speaker, i ask unanimous consent to speak out of order. the speaker pro tempore: without objection. ms. woolsey: thank you, mr. speaker. mr. speaker, president obama gave us -- gave a stirring speech last night. most of which i agreed with. especially the calls for defense cuts, the investments in innovation, education and infrastructure, and the elimination of oil companies subsidies. but given the sacrifices endured by the american people, i thought afghanistan got short solicit, a mere two paragraphs. the american prospect magazine described the state of the union as a ride past the wreckage.

i think that was because it applies -- the state of the union's treatment of afghanistan. because the fact is that the training of afghan security forces has been slow and infective. the inspector general for afghanistan reconstruction said as much this very week. the taliban remains a vital force in many pockets of afghanistan and the head of the afghan n.g.o. safety office reports a very precarious security situation. the president was correct when he said that afghanistan will need to provide better governance, but it's hard to see that happening with president karzai regularly lashing out at us and at one point saying he would choose the taliban over the united states and the international community. mr. speaker, the american people are tired of being talked down to about this war. tired of being told everything's

fine and under control. tired of being urged to stay the course. tired of talk about progress that seems to be little more than an illusion. the president reiterated last night that we will begin to bring our troops home in july, but there's plenty of evidence to suggest we're ramping up this war instead of winding it down. earlier this month, for example, 1,400 additional marine combat forces were deployed with the possibility of additional mini surges during the spring that will push our troop levels in afghanistan to the 100,000 mark. we're also using heavily armored tanks for the first time and there are reports that we're considering expanding the war across the border in an unprecedented way with risky and dangerous special operations ground raids into pakistan. does this sound like a war

that's going to -- drawing to a close? then in a trip to afghanistan a few weeks ago the vice president suggested to us that the occupation could extend beyond 2014. he said, we're not leaving if you don't want us to leave. he should check out recent polling that indicates the afghan people's deep skepticism, if not downright hostility, regarding the united states' military presence in their country. besides, what about what american people believe? when are we going to respect their point of view? they're the ones paying for this war in blood and treasure and clear majorities believe that this war has outlived its usefulness and is not worth fighting. it's time, mr. speaker, to listen to the american people. there's only one sensible and humane solution, that's to bring our troops home and bring them home now. i yield back. the speaker pro tempore: mr. poe

of texas. mr. poe: i ask unanimous consent to address the house for five minutes. the speaker pro tempore: without objection, the gentleman is recognized for five minutes. mr. poe: mr. speaker, on christmas eve, 2010, about a month ago, most of americans were with their families and their friends enjoying the holiday season, the joy and happiness of being together at that special time of the year. but holidays do not come for peace officers. they work all the time. especially on holidays. one such officer was ann o'donnell. she was a university of houston

police officer. she liked to call herself unit 429. and she was on patrol december 24, 2010, about 1:00 in the morning. she had responded, the first to respond to a possible kidnapping in the houston area and she sped to the scene but her vehicle went out of control, she crashed, and she was killed. this is a photograph of officer ann o'donnell. 24 years of age. her father, jim o'donnell, who was close to his daughter, normally talked to his daughter sometime between 2:00 and 4:00 in the morning those nights that she worked. on this day, this christmas eve, he received no such phone call from his daughter. you know, ann was a resident of houston, texas, and gavelston, texas. she had been a peace officer only 13 months and she loved being a texas police officer and

mr. speaker, she was good at it. she is the daughter of nonette and jim o'donnell. her father said about his daughter, ann will never experience the joys of marriage, having her own children to cherish and to grow by her example. as a father of four kids, three of them daughters, three about the same age as ann, i understand the close relationship between a father and a daughter. that is a special relationship. but no parent wants to lose their child before their time. ann was a compassionate police officer. she not only arrested the bad guys, once she arrested an underaged minor for an alcohol offense. so rather than send this child to detention, she called the parents and got the parents involved in this child's life. she was from ball high school in gavelston, texas, went to the university of houston and gavelston college.

and in her youth she learned from the gavelston county police officers about being a peace officer. she wanted not only to capture outlaws but to help the good people of our community. mr. speaker, police officers are the last strand of wire in the fence between the fox and the chicken. and officer o'donnell was one of those officers. they, like ann, do society's dirty work and they go and serve and are first responders to public safety. ann was such a person. ann was the 252nd female police officer killed in the line of duty in this country since 1796. already this year in 2011, 14 police officers in our country have given their lives for the rest of us. ann died protecting and serving the people of texas, and at ann's funeral, 500 police officers paid her honor in the rain. harvey rice of "the houston

chronicle" said it best about her funeral -- officers filed out of the church while the bells tolled hark the herald angels sing. the officers re-formed ranks ranks and stood at attention again in the are the rain as the casket was carried down the steps and placed in a black hearse. at the cemetery the rain drenched officers gathered as a riderless horse followed the casket to the gravesite and bagpipes played "amazing grace." officers fired a 21-gun salute and two buglers played "taps." amazing person, this officer ann o'donnell. we admire her and thank her for action texas peace officer and for her life she gave for the people. we mourn her loss, but mr. speaker, we are grateful that such a person as officer o'donnell ever lived. and that's just the way it is. i yield back.

the speaker pro tempore: the gentleman's time has expired. the gentlelady from florida, ms. wasserman schultz. ms. wasserman schultz: i ask unanimous consent to address the house for five minutes. the speaker pro tempore: without objection, so ordered. ms. wasserman schultz: thank you, mr. speaker. i rise today with a heavy heart to also honor a first responder killed in the line of duty, two brave south florida police officers shot and killed this past week. miami-dade veteran detective 41-year-old-year-old roger cassio and amanda hayworth died while protecting the community they loved. working with the u.s. marshal's service, they were members of an elite unit whose mission is to go after violent career criminals. last week they were attempting to crest arrest one such violent criminal. they were hunting a huge tiff suspected of murdering another man simply for raising his voice with the suspect. when police knocked on the home, the suspect opened fire, killing

officers castillo and hayworth and injuring another officer. combined officers hayworth and castillo served 44 years the citizens of south florida. they put their lives on the line every day. last thursday these two heroes made the ultimate sacrifice. we lost them to a sentless act of violence by someone with a total disregard for the lives of others. we grieve their loss not only to the community they served but to the families and loved ones they leave behind. a 21 year veteran on the force, family members say roger castillo loved two things in this world -- his family and his job. his wife of 15 years, debbie, also worked as a police officer. officer castillo leaves behind his three sons, 14-year-old anthony, 11-year-old michael, and 9-year-old brian. a dedicated father, neighbors said he was the kind of dad you'd see on the front lawn tossing around a football with his boys. amanda hayworth spent 23 years on the force.

a neighbor says the only she loved more than her job was her 13-year-old son austin. a single mom, amanda hayworth would never miss her son's baseball games and would often practice with him in their back yard. amanda hayworth was the first female detective ever killed in the line of duty in miami-dade county. while i did not have the good fortune of knowing these detectives, i know this -- i know these were two exceptional individuals taken from us and lost too soon. these were incredible parents, ripped from their families before their time. they were excellent public servants trying to make our community a better place to live. we send our thoughts and prayers to heal their families. to their families and loved ones, i struggle to find words that can offer solace and comfort in your time of distress. the great poet william wordsworth once said not without hope we suffer and we mourn. perhaps he meant we find hope in the belief that our thoughts and prayers will in time heal their families and that hope and belief that the children of

officers castillo and hayworth will grow up knowing their parents made this sacrifice to make their world and our world a better place. in the meantime, we will suffer and mourn. after going through our own senseless tragedy with gabby giffords we share in the same of loss and inexplicable violence. officers castillo and hayworth will forever be in the hearts of our community. i yield back the balance of my time. the speaker pro tempore: the gentlewoman's time has expired. the gentleman from texas, mr. paul. mr. tall: thank you, mr. speaker. how did the 20-year war get started? it had been long assumed the united states government shortly before iraq invaded kuwait in august of 1990 gafere saddam hussein a green light to attack. a state department cable recently published by wikileaks confirmed the ambassador did

indeed have a conversation with saddam hussein one week prior to iraq august 1, 1990 invasion of kuwait. amazingly, the released cable was entitled saddam's message of friendship to push. -- to president bush. in it the ambassador confirmed to saddam the president had instructed her to broaden and deepen our relations with iraq, close quote. as saddam hussein outlined iraq's ongoing border dispute with kuwait, ambassador glassby was clear that quote, we took no position on these arab affairs. close quote. there would have been no reason for saddam hussein not to take this assurance at face value. the u.s. was quite supportive of his invasion and war of aggression against iran in the 1980's. with this approval from a u.s.

government, it wasn't surprising that the invasion occurred. the shock and surprise was how quickly the tables were turned and our friend, saddam hussein, all of a sudden became hitler personified. the document was classified supposedly to protect national security, yet this information in no way jeopardized our security. instead, it served to keep the truth from the american people about event leading up to our initial military involvement in iraq and the region that continues to today. the secrecy of the memo was designed to hide the truth from the american people and keep our government from being embarrassed. this was the initial event that had led to so much death and destruction, not to mention the financial cost these past 20 years. our response and persistent

militarism toward iraq was directly related to 9/11 as our presence on the asian peninsula and in particular saudi arabia was listed by al-qaeda as a major grievance that outraged radicals who carried out the heinous attacks against new york and washington on that fateful day. today, the conflict has spread through the middle east and central asia with no end in sight. the reason this information is so important is that if congress and the american people had known about this green light incident 20 years ago, they would have been a lot more reluctant to give a green light to our government to pursue the current war, a war that is ongoing and expanding to this very day. the tough question that remains is, was this done deliberately to create the justification to redesign the middle east as many

neoconservatives desired and to secure oil supplies for the west, or was it just a diplomatic blunder followed up by many more strategic military blunders? regardless, we have blundered into a war that no one seems willing to end. julian assange the publisher of the wikileaks is called an enemy of the state. sadly, the majority of the american people seem to support such moves. why should we so fear the truth? why should our government's lies and mistakes be hidden from the american people in the name of patriotism? once it becomes acceptable to equate truth with treason, we can no longer call ourselves a free society. and i yield back the balance of my time. the speaker pro tempore: the gentleman's time has expired. the gentleman from texas, mr. green.

mr. green: thank you, mr. speaker. thank you. i want to thank the president for his message last night and i especially would like to focus on one aspect of the message. the president indicated to us that sitting together was important. it has great symbolism and it's a positive thing. but he also indicated to us that this is not the final step in the process. sitting together can never, never replace working together. so it is what we do today, last night he said tomorrow, sitting together tonight is important, he indicated, but working together tomorrow, this is where we have to focus obvious energies and efforts. we must work together. and if we're going to work together to fulfill what i believe is a great challenge and that is america first, make america number one, if we're going to make america first, america number one, we absolutely are have to focus on

education. education is important because the jobs as we go forward will require much more education than we have been allowed to have and have good jobs in the past. we must focus on education to have the good jobs that we want. and jobs are a priority for all of us. some statistical information is available to help us better understand why we need to focus on education. currently about 25% of our students are completing high school. over the next 10 years, half of all new jobs will require more than a high school education. if we compare our 15-year-olds to 15-year-olds around the world, we find that we are 20th when it comes to science literacy. china is number 13. korea, three. the u.s. is number 28 when it

comes to mathematic literacy among our 15-year-olds. china is number one. korea number three. the u.s. is ranked 16th when it comes to reading literacy among 15-year-olds. china is number one. korea number two. we must focus on and maintain an educated work force. an educated work force requires that we understand that we have to have quality teachers and that we are going to have to make sure that these teachers will invest in education themselves because they see it as means by which they can have a livelihood. i understand that most teachers don't teach simply because they want money. they teach because they want to be with children, they want to see children learn. this is important. but teachers have to feed their families, too. i support making sure that teachers get a decent day's pay for a hard day's work. i support teachers and making sure that the teachers are

available to educate our children. if we're going to have america first, we have to have a first-rate health care system. we had a great sickness care system. we were among the best when it comes to sickness care. we spend $100 billion a year treating persons in emergency rooms, in facilities outside of primary care facilities. but if we're going to be number one, we had to move away from the $2.5 trillion we were spending annually on health care which translates into $79,000 a second, 17.6% of g.d.p. and by 2018 would become $4.44 trillion a year, more than 20% of g.d.p., $139,000 a second. to have america first, we've got to educate our people and we've got to have them receive quality health care. . quality health care can in her be -- never be underestimated.

america can be first. i stand for america first. i love america. and i stand here today to say to my colleagues across the aisle that i am willing and ready to reach out and work with you, to help make america first. because if america is first, not only is the united states a better place, but the world would be a better place because of the values that we hold so dear and dear to us. we believe in liberty and justice for all. we believe in government of the people, by the people, for the people. we believe that every person ought to succeed on his merits or fail on his demerits. that's what america gives to the world. the notion that there is a fair system that allows anyone to rise to the top. to reach the zean i get of life, the best that -- zenith of life, the best that life has to offer. i want america to be first so that the world can benefit from what america has to offer. thank you, mr. president, for your medge and i assure you, i -- your message, and i assure you, i will work with others to make sure that we get beyond the

symbolism of sitting together and move to working together which will make the difference in the lives of the people in this country and indirectly the people around the world. god bless you, mr. president, and god bless the united states of america. the speaker pro tempore: the gentleman's time has expired. the gentleman from pennsylvania, mr. pitts, is recognized for five minutes. mr. pitts: thank you, mr. speaker. mr. speaker, i rise today with a heavy heart to remember and honor corporal eric m. torbert of pennsylvania. on december 18, 2010, eric was killed by an explosion while conducting combat operations in the helmand province of afghanistan. in 2007 eric displayed his willingness and enthusiasm to serve and defend his country by enlisting in the united states marine corps in south carolina. he was then assigned to the first combat engineer battalion, first marine division, first

marine expeditiousary force, camp pendleton, californiaest. deployed to afghanistan in october of -- california. he deployed to afghanistan in 2010. he eric understood what it means to live a life of purpose. he served a cause greater than himself. he served a cause of liberty. eric gave his life to bring hope to all freedom-loving people as did many marines before him in the first marine division. activated aboard the battleship texas on february 1, 1941, the first marine division is the oldest, largest and most decorated division in the united states marine corps. with nine presidential unit citations. eric has joined this storied tradition of service and excellence. before deploying to afghanistan, eric married marcel on june 12, 2010. she supported eric when he joined the marine corps in 2007 and throughout his entire career

. her steadfast care and sack firble love for eric -- love for eric and this nation deserved our sincerest gratitude. eric was a leader, a caring husband, a friend, a son, a brother, and devoted member of a local band. he leaves behind family and friends proud of his service and his distinguished career in the military. eric earned a number of awards during his season in the -- service in the marine corps which demonstrates his commitment to our nation and his professionalism asthma are in. his personal service award -- professionalism as a marine. his personal service awards include global war on terrorism service medal, afghanistan campaign medal and the sea service deployment ribbon. may god grant to eric's family the peace that surpasses all understanding. we grieve their loss. our prayers and most heartfelt gratitude go out to them and i

offer them my deepest condolences. i'm humbled by the dedicated service and sacrifice of their loved one. eric's valor and service cost him his life but his sacrifice will live on forever among the many dedicated heroes this nation has called to defend freedom. he joins the revered ranks of the many thousands of men and women throughout american history who have given their lives to secure the freedom of the people of the united states of america and the freedom-loving people around the world. he is an inspiration to us all. certainerify. i yield back -- semper fi. i yield back. the speaker pro tempore: mr. higgins is recognized for five minutes. mr. higgins: thank you, mr. speaker. last night the president spoke to congress and to the nation about the need for increased funding for biomedical research. both to improve the quality of

life of our nation's citizens, but also to generate new economic investment. he is right and we must heed his call on this initiative. cancer research is a vital part of our nation's biomedical research enterprise. but our federal commitment to this promising field has not kept up with the rapid pace of scientific innovation. in fact, when you take into account medical inplation -- inflation, our funding commitment to the national cancer institute and the national institutes of health have actually been cut over the past seven years. we can and must do better. we will only see new, promising cancer therapies that increase survival and life quality through a sustained, multiyear commitment of federal funding for cancer research. there is only one failure in cancer research, it's when you quit or you're forced to quit because of lack of funding. when federal cancer fund something cut or not sustained

over the long-term, we lose not only promising cancer research, but we also lose talented cancer researchers. president nixon recognized this 40 years ago when he signed the national cancer act. at that time, less than 50% of cancer patients lived five years beyond their diagnosis. today with advances in early detection, healthy lifetiles -- lifestyles and new cancer therapy, the survival rate is 65% for adults and 80% for kids. that would not have happened without a significant investment in federal research funding. the national cancer act led to a continued sustained investment in cancer research that funded the research community to develop a new generation of smart drugs that helped thousands of cancer patients every single day. smart drugs are highly targeted to attack fast-growing cancer cells without damaging healthy cells. drugs like breast cancer and for lung cancer and gastrointestinal

block or inhibit cancer cell growth. less than 10% of cancer death are attributed to the regular tumor. the cancer grows and advances to a vital organ, the cancer becomes lethal. all this could not be more important to the community that i serve in west new york. buffalo, new york, gave the nation and the world cancer research from the new york cancer state laboratory first established in 1897. roswell park cancer institute continues that mission today and the research put out by doctors has led to many breakthroughs that alleviate suffering due to cancer every single day. roswell park is one of 40 national cancer institute designated cancer centers around the country that are the engine for our nation's war on cancer. an important part of buffalo in western new york's future relies upon the success of research completed at roswell and companies at the buffalo niagara

medical campus, coming to market, creating new small businesses and high quality jobs. if we don't have a sustained investment in cancer research moving forward, the promise of that research and the jobs that there create will be lost. -- that it will create will be lost. the time to act is now. cancer is estimated to cost our nation $263 billion in 2010 alone, according to the national institutes of health. mr. speaker, i urge my colleagues to support a renewed commitment to cancer research because there is no better time than now. alleviating suffering and death due to cancer in our lifetime should not only be congress', it should be america's goal and we should insist on a huge federal investment toward that goal. i yield back the balance of my time. the speaker pro tempore: the gentleman's time has expired. without objection, the gentlelady from california is recognized for five minutes.

ms. chu: mr. speaker, i rise today to pay tribute to city of hope, a renowned biomedical research and treatment center in my district. on january 13, city of hope reached a milestone few in the world have ever achieved. doctors performed their 10,000th bone marrow transplant 34 years after they completed one of the most successful transplants ever and it was the first. but this is more than just another milestone. this is a time to remember the thousands of children and adults who have benefited from city of hope. patients like rodrigo nunes, a mexican immigrant, who at the age of 17 became ill. after a transplant and the kindness of the community, he graduated from college. he has proudly spent over two decades as a nurse at city of hope. please join me in congratulating city of hope for their achievement and wish them luck

on the next 10,000. thank you very much. ms. chu: mr. speaker, concurrent to senate concurrent resolution 1 112th congress, i move that the house do now adjourn. the speaker pro tempore: the question is on the motion to adjourn. those in favor say aye. those opposed, no. the ayes have it. the motion is agreed to. pursuant to senate concurrent resolution 1 112th congress, the house stands adjourned until 2:00 p.m. on tuesday,÷???ñ?

all these projections. this is an hour. >> www.cbo.o rmbs g.

if you would be kind enough to please remember to identify yourself by both your name and your news organizations, we would appreciate that. thank you. >> good morning. as we say in our report, the united states faces daunting economic and budgetary challenges. the economy has struggled to recover from the recent recession. the pace of growth and output has been anemic compared with that in past recoveries and unemployment rates remain quite high. federal budget deficits and debt have surged in the past few years, owing to a combination of the severe drop in economic activity, the policies enacted in response to the crisis and recession and an imbalance between revenues and spending that predated the recession. unfortunately, it is likely

reversing this economic position will take years and even after the economy is fully recovered a recurrent, sustainable budget condition will require significant changes in tax and spending policies. let me discuss the economic outlook first and then turn to the budget outlook. c.b.o. expects that budget and production will expand in coming years but only at a moderate pace, leaving the economy well below its potential for some time. there will be modest increases in consumer spending. but we have a long way to go. this slide is taken from the report itself. you can focus just on the line in the center, the c.b.o. projection.

payroll employment, which declined by $7.3 million in the recent resession, rose by only $70,000 between june 2009 and june 2010. the recovery in employment has been slowed not only by slow growth in output but also by changes in the labor market, such as a mismatch between jobs in the available markets and the job seekers. we estimate the economy will add roughly 2.5 million jobs per year over the next six years, similar to the average pace in the late 1990's. even so, we expect the unemployment rate, shown in this next picture, will fall only to 9.2% in the fourth quarter of this year and 8.2% in the fourth quarter of 2012. only by 2016 in our forecast will the unemployment rate reach 5.3%, close to our estimate of the natural rate of unemployment.

c.b.o. projects inflation will remain low this year and next, reflecting the large amount of un-- of unused resources in the economy and will average no more than 2% a year between 2013 and 2016. economic development and the government's responses to them have of course had a big impact on the budget. we estimate that if current laws remain unchanged, the budget deficit this year will be close to 1.5 -- will be close to $1.5 trillion or 9.8% of g.d.p. that will follow deficits of 10% of g.d.p. and 8.9% of g.d.p. in the last two year the three largest deficits since 1945. as a result, the debt held by the public will probably jump from 40% of g.d.p. at the end of fiscal year 2008 to nearly 70% at the end of fiscal year 2011. if current laws remain unchanged as we assume for c.b.o.'s baseline projections,

budget deficits would drop markedly as a share of g.d.p. over the next few years. deficits would average 3.6% of g.d.p. from 2012 through 2021, totaling $7 trillion over that decade. that's the falling line in that picture. as a result, the debt held by the public would keep rise, reaching 77% of g.d.p. in 2021. however, that projection is based on the assumption that tax and spending policies unfold as specified in current law. consequently, it understates the budget deficits that would occur if many policies currently in place were continued rather than allowed to expire as scheduled under current law. for example, suppose instead that three major aspects of current policy were continued in the coming decade. first, that the higher 2011 exemption amount for the alternative minimum tax is

extended and along with the a.m.e. tax bracket is extended for inflation. second that the major tax provisions in the recently enacted tax legislation affect ing individual taxes and estate and gift tacks were extended rather than allowed to expire in 2013, and third that medicare payment rates for physicians were held constant rather than dropping sharply as scheduled under current law. all of those policies have in fact recently been extended for one or two years. if they were extended permanently, deficits from 2012 through 2021 would average about 6% of g.d.p., rather than the 3.6% in the baseline. cumulative deficits over that decade would total nearly $12 trillion. debt held by the public in 2021 would rise to almost 100% --

debts held by the public in 2021 would rise to almost 100% of g.d.p., the highest level since 1946. beyond the 10-year projection period, further increases in federal debt relative to the nation's output almost certainly lie ahead if current policies remain in place. spending on social security and the government's major mandatory health care program, medicare, medicaid, the children's health insurance program and insurance subsidies provided through exchanges, will increase from roughly 10% of g.d.p. to about 16% over the next 25 years. to prevent debt from becomingable, the congress will have to -- from becoming unsupportable, the congress will have to restrain spending, raise levels significantly above historical levels of g.d.p. or pursue some combination of those approaches.

the longer this is delayed, the greater the amount of debt and the more uncertain individuals will be about future government policies and the more drastic ultimate adjustments will need to be. however, changes of the magnitude that will ultimately be required could be disruptive. therefore congress may wish to implement them gradually so as to avoid a sudden negative impact on the economy, particularly as it recovers from the severe recession. and so as to give families, businesses and other levels of government time to plan and adjustment. allowing for such gradual implementation would take longer and therefore major policy changes would need to be enacted soon in order to limit the further increase in federal debt. thank you. my colleagues and i are happy to take your questions. >> back in 2009, the recession,

lower tax revenue, along with the extra spending from bailouts helped fuel these large deficits, what's fueling it now? now that we're in recovery? >> there are several factors that have meant that the budget deficit has not started to improve in the way that the economic news might suggest. i think the most important one is simply that the economy is recovering slowly. that although output has been growing, it has not been growing at the rate that one might have expected based on past experiences with the recession. in fact, the slow recovery is consistent with international experience follow regular sessions caused by financial crises, but it's been a slow recovery by the standards of our past. the labor market in particular has been coming back slowly.

incomes have been coming back slowly. so it will take some time, it will take further recovery, before we see the rebound in tax revenues. that comes with an expanding economy. i think a second factor to note, this is one important difference in our current projection for 2011, relative to the projection we had last august, is the legislation enacted in december, that pushed off for another two years many of the scheduled increases in tax rates and also in particular implemented a payroll tax cut that was not in place in last year. that also is providing some boost to the economy, as we say in the report, but it means that less revenue is being checked and would have been collected otherwise. i think -- the third thing to emphasize is that there's an underlying dynamic affecting

the government budget which is that spending on the large entitlement programs, social security and medicare in particular, is moving up over time inextricably under current policy and on top of that, we've had a numb of entitlement programs that focus on people in economic trouble, unemployment insurance payments, what we know as food stamp, now the supplemental nutrition assistance program. they're laying out a lot of money right now because despite the slow improvement in the economy, many family, many people are out of work and many families remain short of income. so it's the combination, i think, of the slow recovery and legislation keeping tax revenues from growing rapidly with spending growth that continues to be strong, both because the underlying dynamic and because of the particular economic conditions.

>> can you tell us a little bit about the interest payments, those are expected to rise, what the impact of that is on the deficit and debt? >> so we say in the -- in our report that interest payments in nominal dollar terms will more than triple over the coming decade and even relative to gross domestic product will double. that is a consequence both of the increase in debt and of increases in interest rates that we project. interest rates are very low right now by historical standards and we don't expect that to persist throughout the decade. in fact, our forecast is looking for rates to begin to rise at the very end of this year and into the following year. and if one applies noticeably higher interest rates to debt as large as ours is, and will

be becoming larger, the service for that debt becomes very large. i think our projected net interest payments is more than $5 trillion over the next decade. and that is one of the consequences, of course, of accumulating debt. we have written a number of pieces over the past year, years of course, but a few last year, that talked about some of the consequences of rising debt. one, of course, is the traditional argument that by directing savings into government borrowing, rather than into productive capital, one is holding down the growth of productive capital and thus holding down future incomes relative to what would otherwise occur. an effective consequence we have talked about is the more one borrowed, the more one has to pay in interest. it crowds out other government

activities or requires more tax increases. the third problem we talked about is that as debt rises, it reduces the flexibility that the government has to respond to unexpected problems, either domestic, financial, economic problems as we've just seen or international security problems, as we are also living through. and the more debt one has, the less room one has -- the government has to respond to that. an important consequence we've talked about of rising debt this relates back to your question of interest payments, is the risk of a fiscal crisis, by which we mean a situation in which investors lose confidence in the government's ability to manage its budget and the government loses the ability to borrow at affordable interest rates. as we've said before, there's no analytic basis we know of

for judging whether there's a tipping point or where it might be. but the risk does rise as debt rises and we think will also rise to some extent as the investors' confidence in the global economy and global financial system rebound and there is more willingness on investors to invest in other assets and not just in u.s. treasury securities. and the more we have to borrow, obviously the more important it is to be able to continue to borrow at reasonable interest rates. >> the president last night proposed a five-year spending freeze, the republicans are proposing scaling back spending to 2008 levels or $100 billion in cuts. in the greater scheme of things, even if these proposals were enacted, what kind of impact would it have on the larger debt problem you're describing? >> well, i'm not sure exactly

what the proposals are that are on the table. to start with what the president has said, nondefense spending is a well-defined budget category you find it in that report. homeland security spending is not well-defined budget category. the money that goes for homeland security goes through a number of existing, pre-existing budget functions, so you have to look for home -- so if you look for homeland security, you won't find that specified in our table and different people mean different things by it. if you look at, we did an exercise of freezing nondefense discress nation spending. apart from that, it goes through the homeland security appropriations committee. if one freezes that for five years and maintains -- then starts to grow again at the rates we use in the baseline but from that lower level, so you have a lower level throughout the entire decade, the savings are about $400

billion over the decade. that is a large amount of money , no doubt, but it is also clearly less than 10% of baseline budget deficit that we project for the coming decade and only a few percent of the budget deficit we project assuming the continued extension of those policies i listed that have been extended in the past. i think -- i want to say, though, i don't think there's a single policy change that will eliminate the fiscal imbalance. so i wouldn't want my comments to be interpreted as, you can't do it all, it's not worth doing anything, nor am i endorsing any particular proposal. but i think, as one can see in the work of the fiscal commission appointed by the president and in the work of

other groups that have offered their own proposals, addressing a problem of this magnitude requires a number of -- a number of different pieces of policy working together. >> to follow up on that, you looked at what the impact on the deficit would be, what about the impact on the economic recovery if those cuts were made now? have you looked at that? >> we've not studied that specific -- the economic effects specifically of any of these changes in appropriations. but i can make a few observations. one is that in analysis we presented last january, about reviewing a set of policies that were under consideration for spurring economic growth and employment growth, we looked at some changes in tax policy and some changes in spending policy. for example, we looked at the effects of increasing spending

on infrastructure or increasing spending going to state and local governments. one can roughly, not precisely, but roughly reverse the signs of those effects and think about the consequences of reducing spending of those sorts and i say roughly because those estimates are sensitive underlying economic conditions, it's not an all-time estimate, it's an estimate for the economic context. we do some with different estimates today. but you can see some of the effects, i think, there. beyond that, we're -- we have a very large economy. g.d.p. is about $15 trillion. and that makes it hard to move for good and for ill. that's one of the reasons that despite the large increases in spending and reductions in taxes over the past few year the economy has not leapt upward, though we think it's been supported by this action. it also means that cutbacks in

spending may or may not have dramatic effects depending on the size of the cutbacks. in this particular example that we were talking about, the calculation we did of freezing nondiscretionary spending, except for the homeland security subcommittee, the savings are fairly small to start with and grow over time. we have a baseline, which is growing at some rate and we're coming off that at a slower rate and then turning up. so the effect on the budget in 2012 is single digit billions of dollars. that proposal. the effect in 2013 is about $15 billion. the $400 billion, much of that comes in the back half of the decade. i think what is important, and i think highlighted in my opening remarks about gradual implementation, it's important in judging the economic effects of policies being considered is partly the magnitude, partly the timing and partly the

specifics of what policies are being undertaken. as you saw in our report from last january, not every dollar of higher spending or lower taxes or lower spending or higher taxes has the same sort of effect on the economy. it depends a lot in our judgment on the nature of the policies. >> laura montgomery from "the washington post." with your new deficit projection for 2011 is about half a trillion bigger than you projected for this year in august. is it fair to say given the cost of the tax bill at around $400 billion that the tax bill is largely responsible for switching the trajectory? >> yes, that's right. one caveat i would note is that the numbers that we provide in here, the numbers with taxation and revenue estimates hold macroeconomics.

the baseline projection we incorporate the various effects of the various policies. so the effect of that tax change, as we report, was to provide -- support more economic growth this year than we otherwise would have had, that had a little effect on revenue. but not much in that sense. it is still a very, as you're noting, a very large share of the increase in the deficit is from the tax legislation. >> $400 billion is that a number we can pin to the tax -- >> there is a number. >> page 405, 118, gives the economic and technical changes. >> for fiscal year 2011, the deficit we estimate to be $414 billion larger, worse, than we had in august. you can see the breakdown of that.

>> can you talk about the actual effects of that piece of legislation? >> so you can see there's a minus $390 -- a minus 390, that's in the box on page 9, minus $390 billion. that minus $390 billion is part of the legislative table on page 1-5. almost all of that legislative box. >> are you saying you haven't done any analysis of this republican proposal to bring this year's spend do you think to 2008 levels? is there any number you can give on what that cut would look like? i guess you could do homeland security subcommittee plus defense? >> so, again, there's this question about exactly what the policy is that's being proposed and i don't know what proposal chairman ryan will introduce or

that the house will adopt. we did look up a couple of numbers we thought might interest you. this is for the -- let me start with the number for the 2008 regular appropriations act. this excludes defense, homeland security and military construction in the v.a. which are categories often discussed in this context. the total 2008 appropriations were $378 billion. that's category, for the total excluding those categories. the regular nonemergency appropriations. the continuing resolution for 2011, on an annualized basis for the same categories would be $461 billion, a difference of $82 billion. so if one proposed to go back

to 2008 levels as defined in my table, that would be $82 billion reduction relative to an annualized version of the continuing resolution. >> we talk about congress may want to do some of these gradually are you saying that a cut such as this could injure the economic recovery? >> i think pomcymakers face a difficult tradeoff -- policymakers face a difficult tradeoff. the longer they wait to address the fiscal imbalance, the worse the consequences of the rising debt are. on the other hand, moving tax and spending policies very quickly can be disruptive to that overall economy and to the households and businesses and governments whose individual situations would be affected by those changes. that's a difficult tradeoff, how to balance those

considerations is for policymakers to decide, not for analysts. we have found, as you know, from reading our work in the past few years, our analysis is that reductions in taxes, increases in government spending, provide short-term boosts to the economy, even though over time the extra debt that's incurred represents a drain on the economy. you can see that in the testimony we did for the senate finance and budget committee in september, the different ways of extending the expiring tax commissions. you can see what we've done -- in the analysis of the recovery act, you can see it in the analysis we do in other contexts. but the amount of any given change in policy depends, as i said, on the magnitude of the change in vision, the timing, and the nature of the change.

so we try not to make any -- try not to make too many generalizations about the effects of different policies. >> is there much change in the outlook for social security? since the last report? >> there is some change. i don't think it's particularly large. the payroll tax cut by itself reduces the flow of money into the trust fund. that's offset in the legislation by money from direct revenue, money from nondedicated revenue sources. then revisions we make to the economic assumptions, technical assumptions do affect the flow of money into the social security trust fund. i believe the change this time was a little adverse to the trust funds. the most important thing happening, i think, in the decade in a sense, in social security, is that we expect the disability insurance trust fund will run out of money in 2017,

i believe, and under the rules that we follow for constructing the baseline, we assume payments are -- continue to be made to disability beneficiaries after that, but in fact there's no legal authority for that to happen. the last time that the disability insurance trust fund was running out of money, money was moved over from the old age survivors' insurance trust fund. >> that requires congress to act, right? >> yes. >> i have one and a half question, one technical, one more over-arching. the score on the u.a.i. bill was 374 last year, so it seems to have picked up $16 billion in cost, i'm wondering what that was about and also kind of, we've had at least two stimulus packages in 2008 and 2009 and arguably a third one with the tax cut u.i. program,

what, if anything, have you guys learned about what works or doesn't work in terms of stimulus from these experiences the past couple of years? >> from the technical i believe, the answer is the change this is payroll tax withholding happened more quickly than the staff assumed in forming their estimate, a little more revenue is lost in 2011, a little less is lost in 2012. that's a tightening shift, not a fundamental reassessment. it's a very good question, what we've learned from the experience of the past few years. i think that the right answer is, we haven't learned much yet. i mean this in the following way. when you look at the past of an economy, it's very dangerous to attribute any particular movement to some single factor affects the -- affecting the

economy because there are a lot of factors affecting the economy at the same time. and i think the best -- i think some of the best evidence about the effects of fiscal policy have come not from individual episodes looking at an aggregate, the aggregate data that comes either from looking at levels of individual households in particular episodes, so for example, careful analysis of how individual households that received tax changes at different times in the previous recession does inform, has informed the estimates we've made that affect tax changes today but that was a granular look that it often takes some time to get to. there's been some work on that -- of that sort but it's not as fully developed as it will be. other research that's been important is sets in cycles, which one to try to control for various other factors that

affect the economy. for that sort of work, every extra recession is one more important set of data points but won't in general return the results based on a large number of previous recessions. we are watching closely what happens and there are people who have looked at the timing of the economic recovery and the composition of it and concluded that that's -- that that supports the view that the recovery legislation was important. other people have looked at the overall very slow recovery of the economy and even slower recovery of employment and concluded that that shows that the recovery act didn't work. our consistent view has been that we don't want to draw too much conclusion from that sort of look, that we really rely on the economic research that unfortunately takes some time and only alters course slowly.

if you look at the back of the report that we released on the effects of the recovery act which we're required by statute to do four times a year, you can see a list, just a tiny bit of discussion of literature we're reading. that list is a good deal longer than it was two years ago because there's work being done that we're following closely but that has not at this point changed our views fundamentally. >> on the projection of 2.7% economic growth, real g.d.p. for this year, and really rapid growth until 2014 or 2015, how does that compare to private sector economists and how do you justify the differences, if they are different? >> it certainly is well within the range of private sector economists. it is a little less optimistic in the near term.

it's a good lesson if you will, in the difficulties of economic forecasting. if we could today we would change our estimate of economic growth in 2010 because the fourth quarter turned out a little stronger than we and most analysts were expecting in early september when we closed this forecast. so part of what's happening is we had a little better economic news in the past month and a half and that led other forecasters to mark up their forecast a bit and if we were doing this again today, we would lightly increase the near-term growth we project. but i also would add that when i sat here in august, and said, well we closed our forecast in early june and the economic news since then has been worse than we were expect, it's a reminder that this is a complicated business and that especially in the economy which we and most private forecasters think are basically on a slow recovery, there will be periods when things will look stronger for a few months and periods

when things will look like they've leveled out a few months. we'll be trying to extract a signal from that and not just get caught up on the -- in the regular volatility of high frequency economic data. i think in broad terms, though, our view that the recovery will take some time is widely shared. we are today about 10 million jobs short of full employment. the pace of increase in employment that we have, 2.5 million jobs a year on average in the coming few years, is about 200,000 jobs a month a lot better than we've been seeing so far. we are looking for a pickup in employment growth but to make up those 10 million job shortfall takes some time, moreover the population is growing, someone has to find jobs to be crow ated for those

people as well. that's why it takes us until 2016 to have the labor market back to normal conditions. i think on inflation, our forecast is a little below the consensus of private forecasters. we've been below that consensus for the past couple of years and that has turned out, so far, to be correct. i think those are the crucial aspects. again, we give -- we certainly pay attention to what other forecasters are thinking, just as with all the work we do at c.b.o., we watch what outside experts are doing. i think that we are, as i say, have the same qualitative teachers, certainly different numbers and some of the details. >> have you factored in anything from the states in terms of state budget deficits

and the problems that could come from that for the recovery? >> so, yeah, so our economic forecast includes the effects of state behavior. as you know, decline in incomes, sharp drop in house prices and reduced property tax receipts, together with extra demand for services provided by state governments has put them in a tremendous financial squeeze and they are required, as you know, to take actions to move back toward budget balance in certain ways. by doing that, their actions are essentially undoing some of the automatic stabilizing effect that would have occurred and that occurs at the federal level. so we incorporate our anticipation of that behavior in the forecast. i want to direct your attention, we wrote a nice issue brief, i think in december, about fiscal problems

of local governments and it is, i think it's an interesting brief about a large and very serious problem. >> you know -- note that there's a mismatch in skills and jobs available. is part of the problem -- there's some dispute among other economists who disagree with that. i'm wondering how much of the unemployment difficulties you ascribe to the mismatch and sort of where you fall in that debate. >> we think that most of the elevation in the unemployment rate is due to the shortfall in demand for goods and services in the economy and thus the employers need for fewer workers. but in addition to those -- that cyclical factor, we think there is some role being played by structural factors and we talk in the report about some structural mismatch, in other

words, certain sorts of jobs, construction, would be a good example, are not there in the numbers they were and workers who have experience and skills for those jobs will not necessarily move quickly to other jobs as they open up. we also talked in the report about the possible hindrance to the labor market that comes from the difficulty in moving people who are under water in their mortgages. there's some actually disagreements in professional literature about whether being under water affects one's propensity to move. we talked about that in the report. we talk about the role of unemployment -- the extension of unemployment insurance benefits and so on. those things are important. but again, to emphasis, we think, and this is consistent, i believe work most analysts,

that most of the shortfall in jobs comes from the shortfall in demand for goods and services from firms and not from firms' demand for workers and that the principal reason we have slow recovery and employment is because we have a slow recovery in output. >> do you sort of try to portion it out? >> i'm not sure we quantify that precis lie in the -- precisely in the report. >> do you factor in all possible shocks from abroad, dramatic changes, you know, the usual culprits, do you account for that in any way and what is the order of magnitude? >> i don't think i can quantify it. we -- in thinking about all the pieces of the forecast, we bring a probablistic

perspective so we recognize that we don't know what's going to happen and we're trying to pick an economic forecast and pick budget projections that are in the middle of the distribution of possible outcomes as we see that distribution. so we try to take account of the possibility of low probability, but very consequential, events. but i don't think we do it in a way that we can readily quantify for you. i would say on one of those issues, if you think about the problems in europe, the financial system problems, the problems of sovereign debt, there are a numb of challenges -- channels we thought about and discussed with our panel of economic advisors to which further unraveling might affect the u.s. economy. one obvious one but actually we think a small one is through the trade balance, in terms of

the net exports, probably a more important one, would be the financial system. as best we can tell from conversations with expert, most u.s. financial institutions don't have a lot of direct liability to some of the country debt and some of the bank debt that's been the source of the greatest concern in europe but one thing we learned in the financial crisis is that there are indirect connections in the financial system that are hard to keep track of and how our institutions may have liabilities to some firms that do have liabilities related to this those problems, we think it's a risk but i would not say that it's a very large risk at this point in time. >> joust on interest rates for a minute, you assume interest rates slide to 5.5%.

is that where they normally would be? you're not assuming -- you're assuming that everything goes back to norm ral rather than people get nervous and raise rates. >> our interest rate forecast comes from a combination of our reading of the financial market practice and our own modeling of what interest rates we think would even out the supply at once. our own model suggests interest rates should be higher than current market interest rates for the second half of the decade, in other words, you can look at the term structure, well skill people -- skilled people can look at the interest rays and back out what interest rates financial markets expect to prevail in 2016, 2017, 2021,

so on. those rates are currently below the rates our own modeling suggests would be the most likely outcome and our own modeling takes account of the federal fiscal policy. so we have picked a forecast that puts some weight on the current financial market quotes and puts some weight on our own modeling. but the patterns that we're seeing, that we're showing in the report, are not unusually historical standards. intrerpting history is tricky. we had much higher rates in the 1970's and 1980's when inflation was high. we don't think that's the right benchmark for nominal rates, most people expect it to be much lower, but when looks at inflation adjusted rates we're

looking for not dramatically different from the past but our own modeling does have higher rates from the growing level of federal debt. but other factors, again, one of the changes we made in this forecast that we note in the report is to put a little more weight on what we expect to be foreigners' willingness to buy u.s. assets and in particular to buy and hold u.s. treasury securities. that's a very difficult piece of behavior for us to get a clear fix on. there's a lot of treasury debt held overseas. on the other hand, there are a lot of -- there's a lot of wealth held overseas and treasury debt would be part of that. so we think we have a reasonable forecast. but it is a piece of uncertainty. i think it is a piece that in -- that is subject to disruption in financial crisis, in fiscal crises, as we've seen in other countries that encountered fiscal crises.

it is investors' willingness to hold that, it can shift quickly and unexpectedly. >> do you have an estimate in terms of when the statutory debt ceiling will be reached? >> what we said in the report, i'll direct you to a-- appendix c, you probably want to make sure you read all the pages of the report, page 124, we talk about debt subject to limits an we note here that we think, maybe it isn't here we note it. we say the spring is when we expect that the debt ceiling will be reached and we don't try to pin it down, here it is, in the middle of the right hand column on page 124. the c.b.o. estimates the ceiling will be reached in the spring. we have not tried to pin it down more carefully than that. as we say here, by reached, we mean reached under the

treasury's normal behavior then, as you know, there's a set of things that previous treasury secretaries have done, that secretary geithner noted in his letter to congress he could do involving some pulling some bonds out of various government account and other things that would put off the day of reckoning a little. it's worth recognizing that the government is running a deficit this year of about $1.5 trillion. on average. that's more than $100 billion a month. of course the months are not made equal, some have cash inflows, many have outflows but at the rate of $100 billion or so a month, even if there are a set of actions that the treasury could take that opens up a few hundred billion dollars under the debt ceiling, that's just buying a fairly short amount of extra time. >> is there in law right now

any prioritization of how things get paid out? i mean, would congress have to act in order for treasury to prioritize interest on the debt? >> i think there's not existing prioritization. the policy of treasury is to honor all of the government's legal obligations. and that includes payments to holders of debt and payments to people who have delivered goods or services under contract and so on. so the bills get paid when they come up. i think it is possible for the treasury secretary to decide which obligations would not be honored if there were not enough money available to honor all of them. that is default. it may not be default to the debt holders, it may be default to the suppliers of goods and

services to the government. i don't know and obviously we're not the experts in the mechanics of how that works and how reliably that could be done or what the consequences would be in terms of the operation of the government, but it would be default if the government could not meet all of the legal obligations that it faces. >> another technical question. what are the most important assumptions that made you conclude the deficit will start to shrink dramatically after 2012? >> there are a number of factors there. part is the improvement in the economy. but very important part also is the expiration of certain provisions under current law. if one turns to chapt every 4 -- chapter 4 where we talk about revenues, turn to page 85

, on the top right column, we see multiple provisions of tax law enacted over the last decade are scheduled to expire over the next two years. in addition, new tax provisions are scheduled to take effect. the net effect of those scheduled changes is to boost revenues of the shared g.d.p. above the 2011 level by about one percentage point in 2012. that's in the right-hand column. another .2% in 2012. so comparing 2014 to 2011, there's nearly four percentage points in revenues relative to g.d.p. from those provisions of law. if you go back and look at the difference in the deficit between 2011 and 2014, that is about 6.5% of g.d.p. system of nearly 4% of that 6.5% is just the scheduled provisions in the

changes in provisions scheduled in current tax law. there's some, medicare payments to physicians would fall back. but importantly, the improvement to the economy that will increase the tax base for the individual income tax the corporate income tax, payroll tax and so on and also improving an economy that will start to pull in on some of the programs. >> you're doing the middle class tax cuts don't get extended in election year. >> our baseline follows certain assumptions set in law in 1985 that law actually has expired but we followed the same rules, and those rules are for us to follow current law. it's not appropriate for us as an agency of the congress to predict what the congress will

do. what we do try to do in this report and others is to illustrate the consequences of alternative policies. that's why in this report we talk about what would happen if certain policies were extended. i mentioned a few, there actually is a table on page 22, table 1-7, which has the budgetary effects of selected policy alternatives not included in our baseline and we run through here alternative assumptions -- assumptions about defense spending, about nondefense appropriations, about medicare payments and a number of alternative tax policies. none of those, nor the baseline projections, are intended as a prediction of what the congress will do. they are just there to -- the alternatives are there to illustrate the effects of changing policies. the baseline, current law, is a natural benchmark for considering actions that congress might take, just to say what happens if actions are not taken?

>> i was trying to track on table 1-4 on page 115, the mandatory spending line, which sort of ends up in the same place at the end of the 10 years a of where it's going to be this year, 14% of g.d.p. so there's a sharp falloff. is that having to do with physician payments? >> physician payments are part of that. i think more generally, if you're comparing mandatory spending sort of now, the near-term, with the end of the decade, i think it's pushing a different direction. so social security, medicare, medicaid are growing over time relative to g.d.p. but other programs, especially those that are larger because of the weak economy, shrink relative to g.d.p. over time. and if you read through chapter three, where we talk about the different complements of

spending and the different complements of mandatory spending, you can see some of those effects. so there's a table if you go to page 58, a table that summarizing our projections of mandatory outlays, an even better table, page 56, go to table 3-2, these are annual rates of growth. these are annual rates of growth and if you look over the 2013 to 2021 period, you can see the growth rate of social security and medicare and medicaid at 5.8%, 6.8% and 9.3%, much higher than the nominal g.d.p., 4.7%. but the other monday tear -- mandatory spending is changing very little over most of the coming decades. that -- decade. that reflects improving economic conditions. so i think the fact that it

doesn't change much the share of g.d.p., it's the net fact of two different factors that are pushing in different directions. once the economy is back to full employment and the effects of these other programs have stabilized in a way, then it really is patterns of social security and the health programs that drive the longer term outlook. if that growth rate that has been the most important factor in our longer term projections in the past and will be again this year. >> under discretionary spending line, where it's basically cut by a third between now and 2021, from 9.3% of g.d.p. to 6.7% is your assumption the continuing resolution, that we have freeze in spending? >> no, i don't think so, fi understand you right. our baseline assumptions for

discretionary spending take the latest levels appropriated by the congress and inflate those with growth in the employment cost index for the parts that involve payments to federal workers and so on and the g.d.p. parts index for purchases of outside good and services. we always grow the latest level of appropriations with those inflation rates. but those inflation rates are below the growth rate of g.d.p. because they're capturing really mostly just price changes, not capturing the growth of real output. so it's always the case if you look at c.b.o. projections of this sort, discretionary spending tends to decline as a share of g.d.p. in this particular case, the starting point for that is the level of funding in the continuing resolution. but it is not -- we don't freeze it at the nominal level, that's the starting point for the growth rate.

if that makes sense. >> the problematic level, the legal level, the continuing resolution as current law in other words? >> yes, that's the current law from which we are starting. also, as we note, i didn't talk about it in my opening remarks but we note in the report that the history of discretionary spending over the decade or more leading up to the recession, in other words, leaving aside what's happened in the past two years but the decade or so leading up to that point is that discretionary spending has on average kept pace with g.d.p., not just with inflation, so that the pattern in the baseline projection is shrinkage of discretionary spending relative to g.d.p. would be rather different from what we observed in the few decades leading up to thery session. >> did you projection a decade

ago it would keep pace with g.d.p.? >> we follow the same rules that we follow now. it's not our place to guess what congress will do with appropriations and starting with at least 1985, maybe before that, we projected discretionary spending to keep pace with inflation. not a higher number, not a lower number. if one wants to look at alternatives this table of alternatives i referred you to show what is would happen if discretionary spending grew with g.d.p. or if they were frozen in nominal terms. >> is there an updated tarp final expenditure number or expectation given some of the paybacks or so on? >> we have not updated our estimate since we published in november in which we thought

the overall cost would be about $25 billion. we have not redone the analysis since then. we are required by law to report on the tarp after o.m.b. reports on the tarp, we'll do that again later in the spring, may or -- >> i think that's the schedule. >> the budgetary effects are not much different. the biggest source of change has been just the economic picture not turning out quite the way we exped. some aspects, especially the unemployment benefits, turned out more expensive than we thought. but that changed less this time. any other questions? ok, thank you all very much. if you have further questions give us a ring, ok. [captioning performed by national captioning institute] any use of the closed-captioned coverage of the house

proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.] [captions copyright national cable satellite corp. 2011] >> on "book tv" on c-span2, on "afterwords" almost 10 years after the attacks on the world trade center and pentagon, analyst peter bergen looks at "the longest war," interviewed by columnist max boot. also this sunday, the continuing growth of the military industrial complex and ian mcclellan on president obama's first campaign for the senate? illinois. >> living standards are going down in america based on the future we have now. we created two new open-ended entitlements on top of what we have. we owe it to the americans to show them a different path.

>> find out more about paul ryan and his more than 300 c-span apeerns online at the c-span video library. search, watch and share all free, it's washington your way. the c-span network, we provide coverage of politics, public affairs, nonfiction books and history. it's all available to you on television, online, radio and find our content any time through c-span's video library. and we take c-span on the road with our digital bus local content vehicle. it's washington your way, the c-span network. now available in more than 100 million homes. created by cable, provided as a public service. >> earlier today, president obama continued his push for renewable energy resources and manufacturing. he echoed a theme from his

state of the union in wisconsin at o'ryan energy systems which makes heating equipment. this is 25 minutes. >> ladies and gentlemen. the president of the united states. [cheers and applause] >> hello everybody. [cheers and applause] >> hello wisconsin. [cheers and applause] >> thank you. >> everybody have a seat.

have a seat. it is wonderful to be here. sort of reminds me of home, all that snow out there. [laughter] >> let me begin by acknowledging some of the special guests who are here, governor scott walker. where is he? there he is. [cheers and applause] he says he is the mayor of manitowoc. i'm looking at the guy and i don't think it's true, but i'm going to introduce him any way, justin nick ols is here. -- nichols is here. [cheers and applause] >> i look at a kid like that -- [laughter] >> i'm way behind. the mayor of green bay is here. [cheers and applause] and gus

frank is here, mr. chairman, thank you so much. let me start by clearing something up. i'm not here because i lost a bet. [laughter] i just want to be clear about that. i have already gotten three green bay jersies. [cheers and applause] i mean. i have only been on the ground for an hour. [laughter] i have three jersies, and one of them is from woodson and he just said, see ya at the

white house. [cheers and applause] >> so let me just get it out of the way. sunday was a tough day for bears' fans. i see one guy with a bears' hat here. he's got a lot of guts. [laughter] even if it didn't go the way i wanted, i'm glad to see one of the greatest rivalries in sports is still there and we will get you next year. i'm just letting you know. congratulations in the spirit of sportsmanship. i wish you good luck in the super bowl. last night, i gave this little speech that i have to do once in a while. [laughter] and what i said was in this new and challenging time, when

america is facing tougher competition from countries around the world than ever before, we have to up our game. we're going to need to go all in. we are going to have to get serious about winning the future. now the words of the man that the super bowl trophy is named after has something to say about winning. he said, there is no room for second place. there is only one place in my game, and that's first place. that's the kind of determination to win that america needs to show right now. that's what we need to show. [cheers and applause] we need to win the future. and that means making sure that all of our kids are getting the

best education possible, not only because we need to give every child a chance to fulfill their god-given potential, but we need to make sure that american workers can go head-to-head with any country on earth. we have to be more productive, more capable, more skilled than any others on earth. it means that our infrastructure can meet the demands of the 21st century, rebuilding our crumbling roads and bridges, connecting america and the american people with high-speed rail and internet. it means doing what we try to do in our own lives, by taking responsibility for our deficits, by cutting wasteful, excessive spending wherever we find them. and it means reforming the way our government does business so it's efficient and responsive to the needs of americans.

instead of being responsive to the needs of lobbyists. now, as important as these urgent prioritiesr we have also got to make sure that the breakthroughs, the technological breakthruse that come to define the 21st sent century, that they take route here in america. we have to lead the world in innovation. i spend a lot of time talking about this last night. that's how well's create the jobs of the future. that's how we're going to build the industries of the future, because we make smarter products, using better technology than anybody else. that's how well's win the future in the 21st century. [cheers and applause] so i came here to manitowoc to glims that

future. -- glimpse that future. almost right here, 50 years ago, it wasn't until i was on my way here that i found out that a chunk of metal came crashing down to the earth right here. i promise you, we did not plan this originally. press won't believe me. it turns out it was part of the satellite called sputnik that landed right here and that set the space race into motion. so i want to say to you today that it is here, more than 50 years later that the race for the 21st century will be won. this is the place -- [cheers and applause] this is a place that has been

doing what america has always done throughout its history. you have re-invented yourselves. back in 2003, one of the largest employers around, moved their operations abroad and that must have been a tough time for this town and this community. jobs were lost, families were hurting, community was shaken up. and i know from illinois, my home state, when a town loses its major employer, it is hard to bounce back. a lot of the young people start moving away. they're looking for opportunities someplace else. but you fast forward to 2011, and new manufacturing plants and new hope are now taking root. part of the reason the unemployment rate here is four points lower than it was at the

beginning of last year. that's good news. [applause] we have plants like tower tech, one of the largest wind tower manufacturers in north america, a company that has grown by several workers in recent years. plants like the aluminum plant that has hired 70 workers that has taken over the old plant and has plans to reach 100 workers by the end of this year. i'm looking forward to visiting those folks, and paying a visit to those folks later today. but first i wanted to come to orion. [cheers and applause] that's right, i wanted to come to

orion. orion is a leader in solar power and energy-efficient technology. plus the plant is just very cool. [laughter] so i just took a tour with neal and got a feel of what you are doing. i saw where the metal is cut and the supplies are assembled and met outstanding workers like you who have made the company a success it has become. in 2004 when orion moved its manufacturing operations here, i'm told that you just had one employee to oversee the development of the manufacturing floor. one employee. today you've got more than 250. and i understand you are hoping

to have more than 300 by the end of this year. that's good news right here at orion. [applause] and these aren't just good jobs that can help you pay the bills and support your families, these jobs are good for all of us, because they make everybody's energy bills cheaper, they make the planet safer. what you do is sharpening america's competitive edge all around the world. the jobs you're creating here, the growth you've achieved has come, i know, through hard work and ingenuity and single-minded focus on being the best at what you do. but i think it's important, because this is what i talked about last night when i said that all of us as a country, that america, that our government has to invest in

innovation and it's important to remember that this plant, this company has also been supported over the years, not just by the department of agriculture and the small business administration, but by tax credits and awards we created to give a leg up to renewable energy companies. [applause] so it's one thing to have a good idea, but as neal and i were talking, a lot of times wall street doesn't want to take a chance on a good idea until they have seen it proven. sometimes the research that's required, nobody wants to pay for it, and that's where we have to step in. america needs to get behind entrepreneurs like neal. [cheers and applause]

we need to get behind clean energy companies like orion and we need to get behind innovation. that's how we meet the goal i set last night and make sure that 80% of americans' electricity comes from clean energy resources by 2035. that's a goal we can meet. that is a goal we must meet. [cheers and applause] that's how well's make america the first country to have one million electric vehicles on the road by 2015. [applause] in five years, one million electric cars on the road. that's how america will lead the world in clean energy. i have said before, the nation that leads the world in clean energy will lead the global economy in the 21st century.

this is not something that i'm making up to just fill up time in a speech. china's making these investments. i mean, they have already captured a big chunk of the solar market partly because we fell down on the job. we weren't moving as fast as we should have. those are jobs that could be created right here. getting ship overseas. but orion tells a different story. this is the model for the future. the story of orion began a few decades. neal was switching jobs and decided to start with clean energy and clean energy seemed far fetched to people back then, but neal thought there might be something to it.

he bought solar distributors and they went under. he kept at it. he started orion, a company that would not only distribute, but manufacture its own lights. and then about 10 years ago, neal had an idea. you have probably heard this story, but i'm going to tell it for everybody else. it was around 2 fisme 30 in the morning, -- 2:30 in the morning, and neal hopped in his car and drove to the factory in plymouth, where the fack -- future couldn't wait. is this true, neal? [laughter] he says it's true. he started tinkering around until an engineer showed up. and what neal had come up with is one of orion's signature innovations, a light that would

produce twice the light at half the energy. neal had to work to apply for loans, find investors, find customers who would believe his improbable pitch. and doing all of that took time, patience and most of all, it took persistence. it took determination to succeed. fortunately that's not something neal has a shortage of, determination. as he said himself, the difference between orion and other companies is and i'm quoting now, the difference between playing to win and playing not to lose and he says that orion, we play to win. [cheers and applause] we play to win.

[applause] so that's what sets neal apart and/orion apart, but that's what sets america apart. that's what sets america apart. here in america, we play to win. we don't play to not lose. part of what i communicated last night, having gone through a tough time, having gone through a recession, having seen so many jobs lost, having seen the financial markets take a swoon, you get a sense a lot of folks are feeling like, we have to play not to lose. if we are on defense, if we are playing not to lose, somebody else is going to laugh at us, because there are a lot of hungry folks out there, a lot of

countries that are gunning for us. so we've got to play to win. we have to play to win the future and if entrepreneurs like neal keep sticking with it and small businesses like orion keep breaking new ground and we as a country continue to invest in you, the american people, then i'm absolutely confident america will win the future in this century as we did in the last. so keep it up, orion. keep it up, neal. god bless you and god bless the united states of america. [cheers and applause] ♪

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♪ [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> hear more now about the u.s. economy and recent c.b.o. projections that show a nearly 1.5 trillion deficit this year. the lead democrats on the house and senate budget committees held a briefing and also discussed the c.b.o.'s prediction that the national debt could reach $18 trillion in 10 years. from the capitol, this is half an hour. >> is this from a previous -- actually, i'm the one that's got something, so i don't want to inflict this on someone else.

congressman van hollen is going to be here in a short period, but he's detained by house business for the moment. we have agreed that i'll begin and he'll address you when he arrives. i'm here to discuss c.b.o.'s new budget economic outlook, which was released this morning. c.b.o.'s report should be another wakeup call to all of us and the need to get deficits and debt under control. this first depicts c.b.o.'s new 10-year baseline predictions with additional policies added in. it shows due to passage of the tax extension package and slow pace of the economic recovery, c.b.o. is now expecting to see deficits of more than $1 trillion a year continuing through at least 2012. it shows the deficits will briefly fall before rising again as the bulk of the baby boom

generation begins to retire and health care costs continue to climb. under the same scenario, gross federal debt is expected to reach 100% of g.d.p. this year and continue rising. i should emphasize that publicly-held debt which is 69% of g.d.p. many economists regard anything above a 90% threshold on the gross debt as entering a danger zone affecting future economic growth. and as disturbing as those near-term deficits and debtr the long-term outlook is even more serious. it is the deteriorating long-term outlook that is the biggest threat to the country's economic security. the warning signs are clear. earl career this month, two of the credit rating agencies,

moody's and s&p that rising debt that america could lose its a.a.a. rating. if such a thing were to happen, it would be extremely serious to the united states and set off more global tensions. in his recent testimony, federal chairman bernanke called for political will to address the long-term fiscal imbalanceance. he stated, and i quote, nobody doubts that the united states has the economic capacity to pay its bills. it's really a question, do we have the political will to do that. and demonstration of political will, that's what the markets are watching. is the congress, the public and the administration, are they able to demonstrate that they are serious and that they have enough willingness to work together to make progress? at the point where confidence is lost, that is where you could see a relatively quick

deterioration in financial conditions. i very much hope that the people of our country and the people of the congress and the administration are listening to chairman bernanke. i believe he has got it just right. we can't afford to wait until the markets lose confidence in us. we need to act and we need to act this year. now let me be very clear. that does not mean we need to impose deep and draconian cuts this year. every bipartisan commission that has worked on this problem, including the president's fiscal commission, the commission that was put together by the magazine -- "es quire" magazine commission, all of them bipartisan, all of them concluded that what is

imperative is that we adopt a plan now that is credible and will lead us to stronger financial footing for the future. i believe the deficit and the debt reduction plan that was assembled by the president's fiscal commission provides one way forward. i was a member of that commission, as many of you know. i was one of the 11 that voted for it. 11 out of 18 did support it, five democrats, five republicans, one independent. but i recognize that it could be improved on. so it doesn't have to be precisely that. but i think the elements of that plan were really very good. tax reform to broaden the base, bring down rates, help america be more competitive, much in line with what the president said last night. entitlement reform, recognizing that we are going to have to

adjust medicare and social security and medicaid in light of our current financial realities. and also domestic discretionary spending. i must say, when i see some of our colleagues in the house talk about $2.5 trillion of cuts to domestic discretionary spending, i don't see anything about reforming entitlements or the revenue side of the equation. i don't think that's the way to solve this problem. frankly, the domestic discretionary spending has not been the part of the federal budget that's been growing in relationship to the size of our economy over the last decade. the part of spending that has been growing dramatically as a share of our economy are the entitlement accounts. and we are going to have to deal with those as the commission indicated. importantly, the commission plan

had bipartisan support, five democrats, five republicans and one independent voting for the plan. i think we proved that democrats and republicans and independents can come together to solve this challenge. under the fiscal commission plan, as you can see, instead of seeing the debt's rising share of the economy, we stabilize the economy and brought it down to a publicly-held debt of 30% of g.d.p. of 2040. looking at the alternative fiscal scenario, the course we're on, we're headed for a debt that would be 233% of the size of our economy in 2040. that is a stunning, stunning projection. we cannot permit that to happen. those who lend us the money to float this boat will not allow it to happen. so the consequences to our economy would be enormous if we

stay on that course. it simply cannot be permitted to happen. let me just close by saying we can't continue to put this off. i believe strongly that we need to adopt a plan this year that is a long-term plan, not just a budget resolution five-year plan. as you know, all the budget resolutions have been five years and we understand the reasons for that, the uncertainty of projections. but we really need a plan that goes way beyond five years. we're talking about making relatively modest changes now that will pay big dividends as time passes. and that way, time is our friend. but for time to be our friend, we've got to use it. we've got to make decisions. i am very hopeful that we will choose to do that this year. i'll stop there and be happy to answer any questions that people

have. why don't we start right here and we'll go right around. >> what's your take on rand paul's plan who says he doesn't want draconian cuts? >> i have not seen his plan, to be direct. i have not seen his plan, so it wouldn't be fair for me to comment on. >> were you disappointed that the president didn't talk about discussing reform in a little more detail? >> i think the president did a good job in saying to the american people, these are the things that we've got to do as a nation to be competitive and grow the economy. we have to do the best job of educating our kids. we've got to continue american innovation and got to do everything we can to improve our infrastructure if we are going to be competitive in this world economy. at the same time, we've got to deal with our deficits and debt

in a responsible way and that requires that refundamentally reform the way our federal government performs. this is a new age and we have to recognize that. i would have liked very much if the president would have spent a bit more time helping the american people understand how really big this problem is. we are borrowing 40 cents of every dollar that we spend. you cannot continue that much longer. on top of that, if you look at the revenue and the expenditures, in 2009, the revenue was the lowest it has been in 60 years as a share of the economy. spending in that same year is the highest it has been in 60 years as a share of the economy. that tells me that you have to work both sides of the equation. you've got to do hard work on the revenue side. and that's what the commission

called for, tax reform, broaden the base, lower rates, to make us more competitive, and to reduce the deficit. and we have to work on the spending side of the equation and it just can't be limited to nondefense domestic discretionary spending. that is a tiny fraction of the budget. that can't be the piggy bank to get our deficits and debt under control. it's too small. yes, sir? >> you just mentioned the fraction but that is one proposal he came up with, five-year nondefense spending. would that accomplish anything in terms of these longer terms? yeah. it would help a considerable amount. five-year freeze would have big dividends down the road. but, again, he was careful to point out and i would be careful to point out, that is just one part of a plan.

you need much more. you have to deal with the entitlements and that side of the equation. >> a number of republicans came this and introduced a balanced budget amendment. is that something you are ready to support? >> i don't support a constitutional balanced budget amendment that are raids the social security trust fund. >> you keep talking about the need to focus on entitlements but haven't heard the president weigh in very much on what he would like to do with things like social security and medicare. would you like to see more leadership out of the white house and take the lead on these things? >> he made it clear that has to be part of the consideration. he mentioned specifically the entitlement programs, and especially the medical accounts, the health care accounts. that's where the spending is growing most rapidly, that and

interest on the debt. >> are you part of the bipartisan effort to put recommendations into legislation and do you know what the time line is on that? corporate tax, do you think that could be tackled outside of the bigger tax code overhaul? >> i personally believe it has to be done together. senator gregg fastened on this idea of a commission and we did so after hours and hours and hours of discussion. one of the conclusions we reached, it has to be a grand compromise. you have to have all the elements of a package together. that's the only way it's going to be big enough to address the problems that we confront. second, we believe everything had to be on the table. third, we believe everyone had to be at the table, including the administration. you'll recall in our design of the commission, the secretary of

the treasury and head of o.m.b. were two of the 18 commissioners. when we lost the vote in the senate, we didn't get a super majority that was required to advance that proposal. we got 53 votes, which was a majority, but not a super majority, we were left with the option of being a presidential commission, which we convinced the administration to form. when it was formed, the secretary of treasury and head of o.m.b. were not included. i think to reach conclusion h.r., it's imperative you have the leadership of the house and senate and representatives of the white house at the table negotiating. >> talk about the bipartisan effort to translate some of those recommendations into legislation this year? >> i'm not aware of a time line. that work is very much under way. it's a fairly large group of senators, republicans and democrats. >>

[inaudible] what do you see as realistic changes and are you going to bring democrats and republicans to pass a bipartisan budget resolution which have been partisan documents, which would be symbolic since the house is republican. is this the vehicle for maybe getting some bipartisanship early on in the process? >> it may be. i personally believe what i said personally and publicly, that there needs to be a summit involving the white house, house and senate to agree on a long-term plan that goes way beyond a five-year budget outline. i personally never thought the budget resolution was the place to do the long-term plan that's required because almost always congress does a five-year

budget. what's required here is much longer term than five years. >> you clearly stated that there is a need for this, but looking at the political situation you are facing, how likely is there going to be any action? >> extraordinarily difficult. and let's be very, very clear. when the american people are asked what they want done and to prioritize what they want, they want the deficits and debt dealt with. but when they are asked very specifically will they support changes in social security? the polls say no. changes in medicare? the polls say no. changes in defense spending? the polls say no. changes in defense spending? the polls say no. there's got to be leadership to

help persuade the american people this problem is so big that you've got to deal with all of those things. nothing can be excluded. we'll take a break and have congressman van hollen make a statement and then we'll go back to answering questions. >> thank you very much. thank you. and i want to thank the senator for all his leadership on these very important budget matters and issues that are important to our economic growth and jobs and being fiscally responsible. look forward to working with you. i will make a few comments and i obviously look forward to answering questions with the senator. look, what this c.b.o. report says and i just came from the first hearing in the house budget committee today, is a mix

of good news and bad news. the good news is that -- it indicates that the economy seems to be on a sustainable growth path forward, that the double-dip recession that many of us feared is not likely to happen. and i think it's pretty clear that that's the result of a lot of measures that had been taken by the congress and the president over the last two years that helped provide stimulus and support to small businesses and other businesses around the country that helped get the economy moving again. obviously two years ago when the president was sworn in, that first state of the union speech, the economy was in a freefall. the good news is the economy seems to be rebounding and the most important thing we can do in terms of getting ourselves back into at least a little better territory when it comes to deficits is to get economic growth going.

now the bad news. obviously, what it shows is we continue to face a very difficult fiscal situation and the longer term problems are very real and cannot be answered by economic growth alone. and the senator has discussed some of the challenges we face and he served on the commission. so let me just end with this. our number one priority has got to be pursuing two tracks. one is to make sure that we don't do anything to damage the economic recovery, which is in a very fragile state and it would be a big mistake as mark zandi and others have said to take deep cra copian cuts that put the brakes on a fragile recovery and risk putting people out of work. do we need responsible immediate

reductions? yes. and the president talked about that. and second thing and senator conrad has been a leader on this, we need to act now, as soon as possible on a bipartisan basis, to put together a plan that puts this country on a sustainable, fiscal course. i think the president last night indicated that he wanted to work with republicans in a serious fashion. and i have told the new chairman of the house budget committee that democrats look forward to working with him and with the white house and of course with the senate to try and do that as soon as possible. >> thank you. excellent statement. yes, sir. >> a group of republicans put out a bill today to prioritize the debt on the debt ceiling. what do you guys think about that idea and r plans being

made? >> i think it is a dreadful idea. basically what they're saying is pay china first. we're going to forget about the american public and the things that they need. somehow their they're secondary in paying the chinese and jap neice -- japanese. i don't know how to describe that idea except it's a very, very bad one. >> what they're saying essentially is that the full faith and credit of the american government extends to a lot of foreign countries but doesn't extend to the american people themselves. >> other questions? we would be happy to end there. >> you mentioned the short-term deficit how keeping up to some degree for recovery.

at what point does it become a problem? when do we have to make an immediate cut? >> you know, most economists that have come before the commission and if you listen to chairman bernanke, he has been quite clear on this as well. we need another 18 months to two years before we start imposing the really tough medicine that is going to have to be imposed if we're going to deal with this long-term debt threat. and it's interesting, if you look at all the bipartisan commissions, that is what they have concluded. da men chi commission, which has some of the most distinguished people on it, came to that conclusion. don't endanger this growing recovery, but adopt a plan now that is credible and gets us back on track. that is what the president's fiscal commission concluded.

that is what thes quire commission concluded. all of them bipartisan and all of them said, do not impose draconian cuts, the economy is weak where one out of six americans are unemployed or underemployed, but adopt a credible plan that you enact that in 18 months or two years pivots and begins to bring the debt down. you know, we have a level of debt now at the end of this year, it will be about 69% of g.d.p., publicly-held debt that we can manage. what we cannot manage is where we're headed. and we're headed, as i indicated earlier, by 2040 with a debt that would be over 230% of the gross domestic product of the country. so we have to make decisions now that affect that long-term outlook but does not endanger

this recovery. yeah. >> mr. van hollen, republicans rolled out a balanced budget amendment earlier today. how do you -- what's your take on them announcing that? >> well, obviously within our caucus, we have a mix of views. the consensus position is that if you can balance your budget, let's do it right here, right now. one of the things we know as a result of the last election is our republican colleagues share responsibility for governing. let's show by their actions with the budget and appropriations how you put together a long-term plan to do it. i think we all know from the past and there may have been different views on the balanced budget amendment but they were filled with loopholes and gimmicks and the most serious approach is to get together on a bipartisan basis and put together a long-term plan rather

than presentp tending these other things that are filled with all kinds of loopholes will do the job. >> let's go back to what i said earlier because congressman van hollen wasn't here. so often in the past and i have not study yesterday what they have just introduced, the balanced budget amendments define a balanced budget as one that raided the social security cookie jar in order to balance. they were claiming balance bases on the use of social security trust fund money. now if that's what we adopt around here as a definition of balanced budget, god help us all. >> from long-term to the short-term, what is the democrats game plan after march 4? waiting for republicans or are you going to be proactive and come up with your own?

>> comment on the house situation. yesterday, we passed what was termed a budget resolution in the house with no number in it. there is no number on it. not $60 billion. we don't know what it is. we were told we had to wait until c.b.o. came out with the numbers. today they did. and maybe later today, we'll have some idea what they are. the speaker of the house was asked a few weeks ago to identify any specific cut he would make. he didn't come up with one. now senator conrad has pointed out for fiscal year 2011, the commission that was tasked with reducing the deficit and the debt assumed in their

projections a number that -- in terms of fiscal year 2011 spending is where we are currently with the c.r. let's see what the republicans come up with in the house. it's important to stress, they are playing with fire in the immediate term. they are talking about draconian cuts and that's not just -- senator was on the commission, but that's what the commission indicated. >> on that point on the c.r., would you personally agree to any cuts to the current spending levels rather than just proceeding? >> look, i supported the commission plan. it was $30 billion below the president's suggested level. >> the debt limit increase is coming up. the republicans are saying, demanding many reforms on the

budget process and budget cuts. do you think that is an appropriate debate or is there a potential there that you don't raise the debt limit that you will have a catastrophic shutdown situation? >> first of all, we have no choice but to extend the debt limit. to do otherwise would put in jeopardy the full faith and credit of the united states and every economist have said that would be catastrophic. these are debts we have already run up. they have to be paid. like getting your credit card bill and saying, gee, i regret what we did before, so i'm not going to pay it now. that doesn't work. i personally believe we should ask for and insist upon a long-term plan to be agreed to before we have any long-term extension of the debt so that we

keep the pressure on to right the long-term plan that virtually everyone agrees is important to the country. just on a final point on this. mr. bernanke, the head of the federal reserve, has made very clear. he does not believe we ought to impose draconian cuts now. he believes we ought to adopt a plan now that gets america back on track over time. and i believe he's exactly right. that is where is required of us. but that means we need a plan. and it's not a five-year plan. we need a plan that goes well beyond five years to get us back on track. >> i just want to be clear. are both of you saying when the crmple r. comes up on march 4, neither of you would like to see any reduction in spending,

should not go down at all for the remainder of the fiscal year? >> what i said was, in relationship to the president's budget request, the commission supported a $30 billion reduction. >> the republicans aren't reducing current levels. you see it going down? do you think it would be appropriate to go down at all? >> i think what is appropriate is what i've stated. what i support what the commission called for is $30 billion below the president. reductions have been made, very substantial reductions from the president's budget, and i would support the reductions that the commission called for from the president's budget. >> i've got to run. i have two minutes left on a vote. >> thank you.

[captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> the house has gaveled out for the week, but before leaving members passed a bill that ends taxpayer financing of presidential election campaigns and party conventions. all legislative work for the week has been completed. the chamber is out of session until tuesday, february 8, at 2:00 p.m. eastern. follow the house live here on c-span when members return. this week on book tv on c-span 2, 10 years after the attacks on the world trade center and the pentagon, cnn national security looks at the longest war and interviewed by an author and columnist. and continuing growth on the

continuing industrial complex and barack obama's first campaign for the illinois state senate. sign up to get our schedules emailed to your inbox with our book tv alert. >> living standards are going down in america. we just created two new entitlements on top of the other ones we have. we have the opportunity to show them a different path. >> congressman paul ryan, the chair of the house budget committee to respond to the president's state of the qune address. find out about him on his more than 300 c-span appearances on online, search, watch and share, it's washington your way. >> next house majority leader eric cantor lays out the fiscal and economic principles he and house republicans intepped to follow the next two years. this is 20 minutes.

>> thank you very much for joining us. it's a real pleasure to welcome majority leader eric cantor to the heritage foundation the morning after president obama addressed the nation. he is from va's seventh congressional district which he has served since 2001. graduate of george washington university and he received his law degree from william and mary. he is home to james madison, he espouses the principles and a straight constitutionalist and improves government and shall not take the breath he has earned. that is the sum of good government.

he has come here to speak about good government and as he said to david gregory on "meet the press," rapid government spending. representative cantor has been chronicled by the heritage foundation. our index will be discussed later by kim and bill. i will now ask eric cantor to join us and make his remarks. i have the honor of welcome you to the podium, sir. [applause] >> good morning. it's grite to be here. mike, thanks for that warm introduction. kim and bill, thank you for all your efforts here at heritage. it's a pleasure to be here. all of us i know enjoyed the momentous occasion of seeing the president of the united states come to capitol hill. always a treat for the nation

and really a lot of nice words and positive thoughts from the president about going forward and proposing the possibility we all work together, which i'm hopeful of, but in my book, actions speak louder than words. and we will have to, i think, see how it is that this president and his administration are going to carry itself in light of the current situation in this country and the election we have just been through. last year for the first time ever, as mike just indicated, the united states fell from the ranks of the economically free countries of the world as measured by the index of economic freedom. this year, our overall score fell again in large measure because of the increase in government spending. this is a wakeup call for all of

us in our country and for all of us in elected office. in restoring economic freedom and prosperity is a top priority for our new house republican majority. today, i don't hesitate to say that we have arrived at a critical moment in american history. we are a nation at a crossroads. a host of obstacles have been thrust upon us, calling into question our ability to carry out the mantle of global leadership in the 21st century. how we respond is a challenge of a generation. it truly will determine what kind of country we will be. america's always been the land of unparalleled achievement where entrepreneurs and small businesses are the engine of the economy and frankly the envy of all nations. the eagerness on the part of the american people to work and to

pursue their ideas despite the risks they might fail has spawned unprecedented economic growth from which we all benefit. the resulting prosperity and job creation have benefited us for sure in our country, but also has benefited the entire world. it defines who we are as a people. it represents also our best hope for the future. last year, i received a note from a university of michigan graduate who is living in call ma zoo michigan who had -- kalamazoo, michigan. he had spent time working in england and was amazed how differently entrepreneurs are regarded abroad. he said, starting a business, even if you fail in the process, even if you fail in the process, is a badge of