>> this morning on "washington journal." a preview of president obama's fiscal 2012 budget. with merrill goozner. and the effectiveness of school choice programs in the u.s. with andrew campanella, senior advisor for the alliance for school choice. and the role the government plays of the mortgage market with john taylor, president of the national community reinvestment coalition. "washington journal" is next. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] host: today is budget day, the official white house roll out of the president's spending plan for next fiscal year, fy 2012, which begins in october. $3.70 trillion is the number this year. we are also reading the plan would trim or terminate more than 200 federal programs next

year. as the budget plan goes to capitol hill, i want to let you know we will be covering lots of briefings today as folks up there picked apart the budget. we will have it live and taped throughout the day for you today. the deficit figure here in this budget -- $1.10 trillion over 10 years is what would be cut, according to this budget plan. and we want to get your thoughts on that this morning. the president's budget, doesn't cut enough, for what you heard so far? here are the numbers to call -- here it is laurie montgomery's story in "the washington post." here is the $3.70 trillion number for this year. making the point of the president's budget --

they repeat. the plan would reduce deficits by more than $1.10 trillion over the next decade -- that is in "the washington post". "the new york times" writes --

before we get to calls, a quick look at the white house budget director. he was on the sunday morning programs yesterday. >> our budget will get us over the next several years to the point where we can look at the american people in the eye and say we are not adding to the debts anymore. a we are spending money that we have each year. and then we can work on bringing down our national debt. the notion that we can do this painlessly, it is not possible.

we are going to make tough choices. the question is, do we do it in a way that while we are making the tough trade that we are making critical investment so we have a feature that creates jobs for the american people so we can compete in the world of the 21st century? host: a quote in "the new york times." senator kent conrad, democrat of north dakota. john boehner of the budget from

yesterday. >> what is really dangerous it is if we continue to do nothing and allow the status quo to stay increase. when are we going to get serious about cutting spending? our members want to take this leap forward because it has to happen and it needs to start now. >> mr. speaker, if you are serious about cutting spending, would you deal with the biggest culprits in the budget? because you are not doing that. military, not deal with entitlements -- dealing with a small portion, about 16% of the budget. >> this is the first. as i said, there are many steps to follow. there are some defense spending cuts in this package. there are meant -- mandatory spending cuts that you will see brought to the floor here in the coming weeks. you will see our budget, where i got the lead, it will have to deal with the entitlement problems. the president asks us to increase the debt limit, and yet

he will present a budget tomorrow that will continue to destroy jobs by spending too much, bar went to much, and taxing too much. host: and one of the team is making news this monday morning on budget day -- critics blast obama budget for ignoring deficit panel brazil -- proposals. does one headline -- just one headline from "the washington post." on our line for democrats, what do you think of the president's budget? caller: i had a point i wanted to make. $875.29, that represents month late to subsidize health care every congressman in the congress gets. if they are on the family planned, almost $200,000 a year of -- salary and health care is subsidized by the taxpayers by $875.

guys like paul ryan, to stand up there and wanted -- they keep calling it obamacare. instead of saying health care they keep ramming home obamacare. at the he's a muslim. it is tied into the racist slant. i say if they want to do something for the budget, their $875 monthly subsidize health care. host: got the point, john committed several times in the first thought. republican from lake charles, louisiana. what do you make of what you heard about the president's budget? does it do it for you? caller: not at all. $1.10 trillion cut and he has already tripled our debt by more than that. he added twice as much to the debt as we had when he began. it is going to take 10 years under his plan to cut it down to $1.10 trillion?

not nearly good enough. we all have to be willing to tighten up our belts a little bit. i think that applies to every citizen. i think the tea party can do a good job. i happen to be a member. i am also a very staunch an active republican. we need to become involved, all of us, on selling the public on the fact that the pig is dead, as erskine bowles said not long ago. that means not focusing on bringing home the bacon or dividing up the port -- pork. "the baltimore sun" yesterday -- we are asking if the budget cuts are enough and what you can gather so far. dennis, thanks for waiting. upper marlboro, maryland. democrats' line but caller: thank you for the opportunity. let me say, i agree with your

very first caller, my fellow democrat, john, -- he still a little bit of my thunder. i totally agree with john. i think the president's cuts are just about right for this time. i f he cuts too much deeper, it could risk us going right back into this recession. over the weekend, the holding market -- housing market is very precarious right now. it is teetering. the job numbers are not coming down. i think the president and his people -- i really think they are just about right on time

with their proposals as i understand it at this point. host: laurie montgomery writes with more detail in this "washington post" piece.

sanford, north carolina. richard, republican. good morning. caller: how were you doing, c- span? host: what do you think of these cuts? caller: he is spending too much money. he is just like running into a building. i am on social security, lower income. and he is just spending. the more he gets, the more he has to spend. a high-speed rail? we don't need high-speed rail. you know? he is just spending. it's all right but let us move on to youngstown, ohio. on the line for democrats. caller: i think he is cutting too much. like your last caller -- he says he is on a social program, social security. a lot of people out here are just flat out hurting.

and any more cuts by the federal government's -- for example, the home heating proposal -- these things are going to hurt people that are low income people. yet, still -- it is almost like you are watching jerry springer. people coming out of the woodwork in favor of making these cuts that republicans did not want to own up to the fact that these cuts but not all of a sudden appear out of the globe. -- blue. they had a 30 or 40 years of off shoring jobs and sending industry overseas. now all of a sudden they are deficit hawks? it makes no sense. host: the lead story in "usa today." budget, a battle of words and numbers.

that is from "usa today." budget committee chairman of the house, paul ryan, also on the sunday morning shows yesterday. all about spending. here it is. >> i am not worried about washington cutting too much spending too fast. the kind of spending cuts we are talking about right now are $100 billion out of $3.70 trillion budget. i an not concerned about that. what i and concerned about it is endless bar wing that would

compromise our economy, not only today but the future. because we know the decisions we make right now dramatically impact as in the future and the debt is clearly getting out of our control. if we bring a budget that brings the debt out of control, that hurts the economy. spending cuts, yes, in fact, help us with jobs today. host: the next call. kevin, democrat. baltimore. good morning. caller: good morning, c-span. host: is the president's budget cuts enough? caller: i think it is a very balanced approach. i don't think there is anything this president can do that will satisfy his critics. i think he is moving in the right direction. if you callers ago talk about the deficit being tripled since obama has taken the reins. one thing that they very seldom talk about is putting the defense budget back in the normal budget as opposed to an emergency fund. that was a pretty significant

addition to the bottom line. what i think is going on right now is, there is going to be an interesting debate about where the budget will be cut and what programs will be on the table and i think that will be the top of the town the next few weeks. earl from waldorf, maryland. republican pettitte caller: how are you doing today? host: fine. how're you? caller: wonderful. i believe he is not cutting enough. but the last caller talked about the defense budget -- when you are in a friday do not ask yourself why by five bullets are 10, you take care what you need to to win the fight. we need to leave these guys alone and give the what they need to take care of what comes ahead. so, when it comes to the defense budget -- or when it comes to the budget in general, i think,

yes, we can cut a lot of programs that aren't being used. they are being used but being taken advantage of. i think that is the biggest problem -- greed, and people not doing what they are supposed to. unemployment benefits. people sitting home on vacation is not doing anything. to lazy, will not go out and actually look for a job. what are we going to do about that? you have to go in and prove you are looking for a job and people do not even do that. host: virgin islands. you are on the independent line. caller: good morning. and i on the air? host: yes, sir. what are your thoughts on the budget? caller: i think it cuts way to what -- let me put it that way. as a recent college grad, i am scared to death about the economy and afraid that president obama is really choking us off at the neck right

now. i would suggest we start spending more money on things like infrastructure, education, social aid programs. maybe we can create a real single payer system that would be fair to all americans. the only way to get out of a whole is create new things and not go back. republicans want to decrease revenues and also decrease spending. so they just don't like the government but a lot of people in need the government. it goes both ways. host: words from ken from the virgin islands. from "the washington times."

the 2011 bill, they will continue debate on that this week in a house, we think beginning tomorrow. that is the spending that will go from now until october with the new fiscal year starting in october. that is what we are talking about this morning, the new budget for this next year. back to "the washington post" and lori montgomery. one of the themes here --

here is the white house budget director once again. >> i think if you look at the entitlements, we have some important policy in this budget. there is a provision that for the last number of years congress has passed on a bipartisan basis to make sure that the payment to doctors under medicare don't get cut. the problem is, the payments are cut their willingness to treat medicare patients will go down. when you put it on the national credit card and you say we are not going to let those changes take effect, it increases the deficit. >> the same kind of thing they talked about in the debt commission -- nothing about social security. >> $62 billion of savings to pay to deal with that provision in medicaid the next two years. that is real money. >> it is -- >> social security. let's also be clear that social security is not contributing to

the short-term debt. it is a separate issue it is something where we have an obligation to the american people to make sure that social security is sound for this generation and the next. the president said he wants to work and a bipartisan basis to deal with social security. host: some more reaction -- mike is on the line for democrats from restaurant -- reston, virginia. caller: all the entitlements, i guess i feel a little bit upset still with wall street. you talk about entitlements.

the government pushes us to put our savings and retirement into wall street and they deregulate wall street and wall street steals everybody's money and nobody goes to jail and yet they are willing to take people's gas money away, heating oil. it is ridiculous. give me a break. i think what he is doing is probably just right. host: north lake, illinois. independent color. -- caller. caller: i would like to talk but two things, if you don't mind. no. 1 -- if we all take our pensions from the state and government and have them start paying for their own pension, what is the total of modeled money that we will save -- which i did not know and i would like to see cs then tell me that down the road. maybe the third guy before that -- i worked for 40 years and this is the first time i am off. i am not lazy. i am getting heavier.

you get higher medical bills. i am working guy. i have been outside my whole life for 40 years. one more thing -- housing. it was not caused by the people. it was caused by the people who wanted to lower housing -- and all of us are paying for it. they are the problems that caused all of this, not us. but the middle-class is paying for its. we all got to understand that if government will make big mistakes they are going to have to be accountable. host: let's hear from st. louis where bill is on the line for democrats. is the president's budget cutting enough? caller: a trillion dollars in afghanistan and iraq. based on a george bush and exchange. and we are still there.

what did we accomplish? nothing. we have been pouring billions of dollars down a rat hole for these to fake wars that we were lied to about. and have not heard what republicans stand up and say anything. but during the bush years every six months when he won another $80 billion or $90 billion the republicans stood up like sheep and gave him everything he wants. until we stop these fake wars in afghanistan and iraq we are going to stay in debt. look at all of the new bases we are building or run russia? what is that about? our government is insane. host: c-spanwj is our twitter address and we have a few messages. here is one of them this morning. one viewer writes -- we will start getting reaction today from members of the house and senate.

we will give you a rundown a little bit later in the program. the here is the focus -- here is the focus of "the wall street journal" this morning. they write --

new york. gary, independent. caller: i am a 15-year veteran -- i don't believe putting our cola checks and putting it on lousy baby boomers. people on welfare produce all of these babies. that is where most of our medicaid and medicare and all of that is going. the ones who do not have kids should not have to pay school taxes. it is their parents' problems. they should pay for their own kids. host: dayton, ohio. democrat. caller: thank you for c-span. i think the president is good for what he has. my republican people forgot we had a $3.70 trillion surplus on

top of giving tax breaks for 10 years and extending another two years. how is their claim legit? you are giving it away. if people do not see that i pray for my fellow americans citizens. i hope somebody -- how much has the tax cut -- 12-year tax break cost us? host: asking for to this morning about the president's new budget being rolled out today. we will see the official arrival on the hill and little but later this morning. one of the figures is $1.10 trillion over 10 years, the projected cuts by the white house. we are asking you if that is enough. here is a little bit of analysis from clive coke in "the financial times."

falls church, virginia, jack on the independent line. caller: the deficit cuts -- the budget he puts through cut a bit but without touching the war of machine budget no way they can cut it. the have to slash the war machine budget. you have to get out of the wars and reduce foreign aid and reduce the defense budget drastically. host: bethesda, maryland. mary, on the line for democrats.

caller: this will make for some interesting figure in the house. i would like to -- a couple months ago, when gates said we don't need the giant defense communications center. we have electronic communications, we have computers. we don't it made the big defense communications center that cost 300 million i think a year. but it is in eric cantor's district and, surprise, we still got it. here is another twitter message this morning on all of this -- paul coleman writes in "the new york times -- paul krugman

writes in "the new york times" --

we will read a little bit more in a minute but let us get more of the calls. magowan, new jersey. caller: thank you for c-span. i saw this coming when i attended the first tea party meeting here in new jersey. i live in a relatively poor community but i it seemed to be doing better than some. this is like reaganomics 101. you have to get some talk about poor people going on. you talk about the middle class, the middle-class. the dirt bag middle-class the next town over complains about the tax on wine in new jersey. there's got to be some focus on what is really happening to some people's lives. it's got a little bit more from paul krugman.

jefferson, new york. veronica, a democrat. good morning. caller: thank you for taking my call. i believe that the president is trying to cut the budget the right amount. the only thing that is concerning me is the wrong programs are being looked at and the wrong things are being cut. i really feel low income and working people are being hurt the most out of these proposals. misses obama is talking about nutrition and better food. you cannot buy better food and

eat nutritious lee on the low income. it sounds ridiculous. somebody in that position -- i would love to eat that way. but we can't. taxes are outrageous. upstate new york, real-estate taxes and school taxes that will knock your brains out. but yet, we are having hard enough time now trying to manage -- at least i am. i am 56 years old. on a very fixed income. i and bidding by it by the skin of my teeth and raising things -- i'm getting by by the skin of my teeth and you are raising things. i do not understand why it is happening. i have not have health care since 1992 and i just received health care this year. i certainly have not been

getting anything from the system. i know what it is like to be on the other side. it is not a luxury. i just wish that they would look -- you know, the tax breaks were given for the very wealthy, and i don't think anybody look down the line on the other things. i thank you for your time. i just wish people would look at everything and what is actually going on. it's got a couple of other viewpoints by e-mail on the president's budget -- host: thank you. a couple of other viewpoints by e-mail on the president's budget.

brendan is on the line from carolina beach, carolina -- north carolina. caller: i wanted to echo another sentiment. at the oil subsidies, a no- brainer. correct me if i am wrong, subsidies were meant for family farms and many of them signed deals with a big corporate farming outfits. they are taking those subsidies. if that is the case, they should be cutting those subsidies as well. host: defense, of course, one of the biggies -- one big target of certain folks around this town. here is a story in "usa today." they talk about the challenge of belt-tightening. the pentagon has tried for years to drop the alternative engine for the f-35, the story has been out here awhile, yet lawmakers

refused to cancel the program. the challenge of belt- tightening, they write in this "usa today" story. you are on the air. caller: thank you for my call. this deficit was not treated in two years and it is not going to be solved with one cut. this is something that has to be did overtime. we have a consumer-driven economy and unless you need -- you get jobs that is the only way you can improve the deficit. if they do what republicans say, we will be right back in a depression.

and then, thank you. one other thing -- these people calling in about single payer. yes, i would like to of single payer but remember what president obama said first of, if he was going to start from scratch he would do single payer, but with all of our pensions and things tied into it insurance, if you do single payer right off the bat you would create a worse economy than what we already have now. thank you. host: danny from alabama. jim on the line from the vancouver, washington. caller: sure, is due host: has the president's budget cut enough? caller: i do not think a cut enough but i do not believe a cut in the right places. it is simple economics, really. george bush, cutting taxes and went to war for 10 years. if you go to war and are spending that kind of money,

that you have to look at the military industrial complex. when i was over there i met a whole bunch of people who were from no big contract places and they were not talking about when the war, but just talking about how much money they were making. that is the reality. i have a mother. she is in her 60s. not in good health. work hard all of her life. she's barely got enough money to live. i send her money. it would be really nice if the money i center was tax- deductible. it would be really nice if people could -- more in their savings account. i think our savings should be tax deductible and i think if the government started working on things like that, things will get a lot better a lot quicker. host: earlier paul was mentioned infrastructure. here is a "washington story -- "the washington post" story on a pole. -- poll.

that is in "the washington post ." back to "the wall street journal" today. public unions steeling themselves for budget fights.

you can read more, page a4 of "the wall street journal" today. thanks for waiting. you are on the republican line. caller: for social security -- the government is supposed to put in 40% and we are supposed to put in the other 60. so, i think the president is doing right. have a nice day. host: ok. frazier, a democrat. trenton, new jersey. caller: i think the president is doing the best he can. if he puts more, they did say he should put less and if he cuts less, they say he should cut more. all he can do is do what he can do.

there is nothing more we can do. everybody is out there -- has their own ideas. host: earlier in the program we brought up this piece from "the new york times." a cautious approach of seeking bipartisan appeal. a little bit more in this piece about whether the two parties are serious or not about getting down to business on some of the bigger items right now, which is the tenor of this step. not just republicans not ready yet --

south carolina -- you are on the line for independents. caller: i unthinking of defense cutting, foreign aid, getting the illegals out of the country,. you cannot even buy a job -- you go to construction sites and they are full of them. you cannot get a job of the construction world and i have been a year since 1982 -- it has been a struggle day after day.

highway and building. not just down around the borders. joanne online for democrats from tennessee. what you make of the president's budget? caller: it is ok. it is better than what the -- whatever his name is recommending. but i have two points that i think everybody is overlooking. i did not know if they are scared or what. first of all, on the illegals, they don't pay social security, they don't pay for their insurance. us people, we pay for all of that stuff for them. that should not be allowed. the second point is us older people. i am in my eighties.

we paid into social security all of our lives. we are the ones bother going to be heard. who do they think of the nation in that respect going except in the older people -- i barely get by from month to month and i am not complaining about that. but i do think it is people on both sides of that forget -- the color of the president's skin -- we would have a much easier transition. thank you so much for your time. host: hanover, maryland, will be our last call for this segment. but stick around, lots more budget talk coming up. david from hanover. independent line. caller: as a sovereign nation we do not need to borrow from anyone. abraham lincoln did it with the greenbacks. we could do it again. we can print our own money and not far from anyone. we need a constitutional

amendments to prevent us from borrowing from anyone. host: a little later in the program we will take a look at the issue of school choice -- what it is all about and how things are going in that area. alliance for school choice gas will be on, senior advisor named andrew campanella at 8:30 eastern time. but we will take a short break and talk more about the budget that would get unveiled. our guest will be merrill goozner, senior correspondent for the "fiscal times." and like i said, a lot more of your calls. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> my concern is to be an agent for change, whether i would be a vehicle or not is totally immaterial. that is not the issue. the issue is the system by which the people have a right to choose whoever they think is the right person for that job. >> that is from a book 2010 conversation with mohamed elbaradei. now nearly a year later,

egyptian president of bard stepped down as egypt undergoes a major change in government. see how it happened on the c- span video library. searchable on your computer any time. >> 4 mcafee, we are focused where the threat is and to protect whatever consumers employees use. but tonight, mcafee president and ceo. "the communicators" on c-span2. >> on television, radio, and online, c-span, bringing public affairs to you, created by cable it is washington your way. >> "washington journal" continues. host: more about the budget. merrill goozner is a senior correspondent for "the fiscal times." we sit here on this one day a year, the budget comes up to the hill. what happens next once we see

the release, see the large numbers, what happens? guest: the budget is the president's proposal for fiscal year 2012. it actually does not begin until next october. under the theory of how our government operates, the proposal then goes to capitol hill and the various congressional committees evaluates that budget and eventually hold hearings and eventually passed the budget by october 1. which is when the fiscal year starts. what is interesting, of course, we still don't have a budget for this fiscal year, fiscal year 11, because the president made a proposal year ago and it never really was considered can we continue operating with what we call continuing resolutions under the fiscal year 2010 budget. this budget is really almost like an administration talking points. and there will be lots of discussions about where the administration would like to see the budget going. and of course, there will be a lot of push back now that the

republicans control the house. host: i and glad you brought the current year's budget because as you mentioned are not done yet and house will take up the spending package for fiscal year 2011 tomorrow and for much of the week. where are the battle lines drawn for this year's budget? guest: fiscal year 11 budget has been operating on continuing resolution and the government's continues to do this every point in time of where they set the next day. the next date is march 4. that continuing resolution, which was passed i believe in december, will expire march 4 and the government will literally run out of authority to spend money. we will see a huge debate over what the spending court -- cuts ought to be in this year's budget leading up to that point in time. host: how does one connected the other? guest: whatever happens next

year, there will be a continuing resolution. beyond that, sometime in april perhaps where we will have to raise the debt ceiling, which will be another break point. depending on what they do on the continuing resolution, there may be other votes on that. at some point we reach the end of the fiscal year and the current budget being proposed today will go into effect, depending on what congress does with it. host: our guest is merrill goozner, senior correspondent for "the fiscal times." he spent 25 years and the news business as a foreign correspondent, economics right to an investigative reporter. a university of cincinnati, columbia graduate school of journalism. he will be here for about 40 minutes to take your calls. all numbers at the bottom of the screen. the budget officially comes out from the white house today. we may very well see some pictures. the actual pictures of the big budget stacks coming out for folks on the hill to see. before we go to calls, one of

the story lines says the budget proposal doesn't really touched the big entitlements and big spending programs in any significant way. do you see it that way, and what does it all mean? guest: absolutely. we have about $3.70 trillion budget. the so-called domestic discretionary budget, which dominate the headlines day after day, is a small fraction, about 10% of that budget. the vast majority goes to three very large programs. four, if you include aid to the states in health care -- medicaid. but the other three are deede in order of size -- the defense budget, social security, and medicare. these are the mainstays of the budget and are basically off the table for discussions up on capitol hill, either for political reasons -- the defense budget -- or just the law is called an entitlement.

social security, depends on how many people are retired or are on disability. medicare is an entitlement we spend on cd -- senior citizens and disabled for health care. health care costs go up, and therefore the amount of money we pay for those budgets go up with them -- unless something is done to decrease that. there is debate with health care reform law to try to hold health care spending in check, as well as expanding coverage. but that right now -- and the discussions we have had so far in the last couple of weeks -- really none of those have been put on the table. and from what we are hearing about what we will see from the president's budget tomorrow, none of those will be on the table again on his budget, either. host: 3 $4 trillion is the larger figure but another figure of what to throw your weight. here is a story, your story, pulling it off the web. $1.10 trillion of deficit cuts. 10-year figure. how significant is that number?

guest: in the larger scheme, fairly small. we will probably add somewhere around close to $7 trillion in additional data sets of the next decade. the reason for that is we are primarily -- we are in a deep recession still as far as employment is concerned. a when you are at 9% unemployment, you are not generating the payroll taxes, you are not generating income taxes, that you need it in order to bring the budget into a more or less balanced situation. so, until unemployment becomes -- begins to come down significantly, we will not see reductions in back. the president's budget is going to project a decline over the next three or four years in the budget deficit, down to around 500, or 600 billion or so, and that is largely because economic growth this year should be fairly healthy -- between 3%

and 4%. if we begin at that -- continue at that rate the next four or five years, which is true generally would we, the recession, then the budget deficit of to be cut -- the trillion-plus deficit, actually is going to be $1.60 trillion is the project andion the current year -- it should come down to $600 billion. when you are out to about 2015. that is actually about 3% or so of total gdp, which is about the rate at which the economy is growing. at that point you are adding that at the same level at which to the economy is growing -- some economists would say, well, that is a steady state situation. others, of course, would like to see the deficit come down so you would like to reduce it substantially below that. host: let us get to calls from our guest. tulsa, oklahoma. phil on the independent line.

you are on with merrill goozner from "the fiscal times." caller: did not see military cuts or nasa cuts. after 30 years of the military establishment having a blank check, -- host: let me stop you for a quick second. what can you say over all about the military? guest: the military budget will actually continue to grow while domestic spending is going to be flat over the next 5-10 years under president obama's budget. there was a much ballyhooed announcement they were cutting $70 billion over the next five years at the pentagon. but in fact, that was a reduction from a previous projections for growth. so, the total amount -- which is a famous budget tricky here in washington -- so the total amount will continue to increase. i think as we discussed earlier, the major programs are continuing on. some of them slightly scaled

back but the budget is still projecting a second engine for the f-35 although the president opposes that. congress continues to spend on that. it should be noted the factory where it will be billed is next to john vander's district in ohio. and at other military programs. where there may be reductions in military spending may be supplemental authorization as we wind down the wars in iraq and afghanistan, presuming the political situation in those countries go well. the caller mentioned nasa. nasa was slated for cuts in the house republican plans, along with a lot of science budget. we have not seen the president's budget yet, what he is projecting. i do know that he is saying he wants to do and investment budget, and he has made a huge emphasis on science. in fact, later this morning the will go out to baltimore, a middle school, where they are going to be talking about

science education. i suspect the president will continue investing in science areas like nasa and the national institutes of health -- again, where that goes on capitol hill is a separate question. host: we will have live coverage of the president's remarks on c- span live. he will be in baltimore parkville school. pennsylvania. good morning. caller: i am calling for a solution rather than just a comment. it has to do with farm subsidies. my thoughts is this -- instead of giving subsidies away and giving money away, why not start giving no interest loans? that could work for students going to college. i will leave you with this -- there is a enough for all as long as it is not wasted. thank you very much.

guest: the idea that a no interest loan is not a subsidy is not exactly right if the federal government has to borrow money to make that loan and it pays any interest at all -- and of course, it does on treasury bills even if low -- that is not about -- that amounts to a subsidy. one of the proposals the president will make today in his budget, and he made it every year, is to remove the subsidies that are in the tax code that go to the oil and gas industry for drilling and oil depletion allowances and the kinds of things that subsidize the very profitable industry -- especially when you see gas prices over $3 a gallon. yet every year in capital they continue in this budget to continue the subsidies. actually over a trillion dollars a year in what is called tax expenditures. if you levy the tax on all

income, you would collect an extra trillion dollars a year but then we give out things out of the consumer side, home mortgage deduction, health care insurance, of the business side of an oil depletion allowance, not taxing overseas income. so, what we end up doing is enacted tax code and then punched huge loopholes in it that's really undercuts the ability of the federal government to run a balanced budget. host: over 200 programs trimmed or eliminated. any other biggies you have your eye on? guest: from my vantage point, the fiscal commission back last year made a proposal in order to cut spending. they cut $2 in spending for every $1 tax increase. their proposal would reduce the deficit by about $4 trillion over the next 10 years. what was notable about the spending cuts is for every dollar of domestic discretionary

spending, it was a dollar of defense cuts -- defense spending but was cut in their proposal. what we are seeing both from the the president and republicans on capitol hill and the house and even the democrats in the senate that control the senate, we are seeing no cuts in defense spending while there are some freeze is going on in domestic spending. on the taxing side -- one of the reasons why the deficit this year is going from $1.10 trillion to $1.60 trillion, is because we did a massive tax break back in december in order to keep the economy going. if people look at their paychecks, they will notice the amount of money going out in payroll taxes for social security is reduced by two percentage points. would you do that, hundreds of billions of dollars of revenue did not come into the government and it means the budget deficit is that much larger. we are not seeing -- if the

budget deficit reduction is the goal, we are not seeing, as paul krugman put it, not seen an adult conversation. host: the budget director at the white house talking about some of those biggies, he was on one of the sunday morning shows. >> i think if you look at the entitlements, we have some important policy in this budget. there is a provision that for the last couple of years, congress has passed on a bipartisan basis, to make sure that the payment to doctors under medicare don't get caught. the problem is, if the patientse doctors' and is to treat medicare patients goes down. it could increase the deficit. >> this is the kind of thing they talked about on the debt commission. >> we have savings to deal with that provision in medicare over the next two years.

$53 million is real money. but also be clear that social security is not contributing to the short-term debt. it is a separate issue. it is something where we have an obligation to the american people to make sure that social security is sound for this generation and the next. the president has said he wants to work on a bipartisan basis to deal with social security. host: the idea of that commission -- how much will we hear about that for the weeks and months ahead? guest: that is a good question. i wish i had a better crystal ball. the reality is that the president's budget, when it goes up there, given the tenor of the debate with the house, with the republicans in control -- they refused to use the words "dead on arrival," but there are a few parts of the budget that are actually dead on arrival. if the republican party is intent on getting a lower budget

deficit, the what the president is proposing -- lower budget deficit and what the president is proposing, they will have to talk about other things. social security does not really deal with the problem, but medicare is huge. proposed that they would do this so-called "doc-fix" -- they proposed that they would do this so-called "doc-fix." $52 billion is not a huge amount of money over three years in a budget that is about $450 billion and growing by about 4% to 6% per year. but, it is a start, so there needs to be more discussion. i mentioned earlier, if there is going to be real discussion about reducing the budget deficit, we have to take on the defense department budget. historically, after wars, there are build-downs.

one of the most rapid came after the end of the cold war and was initiated by president bush -- the first president bush. a continued throughout the clinton -- it continued throughout the clinton years. that was a time of peace and prosperity. at the end of that time, we had a balanced budget. there is no way we can balance the budget if we continue to grow the defense department budget. host: back to the calls. a democratic caller. caller: good morning to you and your guest. i think the president is doing the best it can under the circumstances he was left with. why doesn't congress freeze their salaries? cut out some of their perks? cut back on the loopholes on the upper-2% of the income earners, and please do not mess with

social security and medicare. thank you. host: not an uncommon set of concerns. guest: yes. i think the congress may well have voted and to reduce their salaries or at least hold and constant. to be honest, i do not pay too close attention because there is not much involved. you could probably in live in the congress and would not do much to the budget deficit or the -- eliminate congress and you would not do much to the budget the opposite or the debt. i put social security in another category. it is a long-term problem. so security is content -- social security is continuing. it is generating surpluses for the overall budget deficit to this day. it is several years away before it goes into a deficit. the real biggie is medicare.

until we get health care costs under control in this country -- that is really, along with the defense department are going to be the two areas that we need to focus on like a laser beam to get a long-term budget deficit under control. host: what are republicans angrily about those two programs as relative to the budget -- what are republicans currently saying about those two programs as relative to the budget? guest: they bilbies as cuts to medicare. democrats like to call those -- they build those -- billed those as cuts to medicare. democrats like to call them something else. it could be a better health care system. the other side of the argument, if the republicans are calling them "cuts," we are not having

the right discussion about where we're going to be in terms of getting a long-term budget deficit under control, especially with regard to health care spending. host: north carolina, ray, an independent. good morning. caller: good morning. i see healthy individuals. i work seven days a week. i see healthy individuals who get checks, government assistance, food stamps, rent reductions. they are healthier than me and they do not do anything. number two -- illegal immigrants. i am not talking about just the ones who crossed the border, but those who come on visas. why did they not do programs like they do with juvenile or probation officers, so they cannot stay here? my biggest concern is my competition with illegal

immigrants. i do my own service on rainy days. i go to restaurants, all kinds of businesses. latinos -- how can people get off of government assistance if we do not make them get jobs? thank you. host: mr. goozner? guest: the first response is that there is 9% unemployment all across the economy from white-collar to blue caller to construction. it is in other sections of the economy. it has been the worst recession we have had in terms of employment since the great depression. there are people who get food stamps, unemployment insurance, who probably, even under good economy, would not be overly motivated to go out and work. there was welfare reform back in the 1990's. in fact, when we got down to it in the late 1990's -- back down

to 4% unemployment, you saw less complaining about waste, fraud, and abuse. with unemployment high, people often end up on those programs who, under normal circumstances, would never consider showing up for food stamps, showing up for unemployment insurance. it is really not in their makeup. i have a tremendous amount of empathy for people who cannot find work. host: some of the most recent budget figures from the wall street journal poll -- "the wall street journal." that was 2010. last year, the proposal called for 3.8 trillion dollars in spending -- three. dollars trillion in spending, with the $1.60llion deficit projected.

the actual deficit was about $1.30 trillion. we're reading about $7 trillion for the budget proposal. "the wall street journal." they are talking about a $1.60 trillion deficit. a lot of numbers. how do we get our heads around these things? try toit's difficult to bring about a household budget. the increase in the budget deficit from about $1.30 trillion projected to $1.60 trillion projected is almost entirely due to what tax cut was passed in december to keep the economic recovery going. as i mentioned earlier, if people look inside their paychecks, they will notice that payroll taxes have been decreased. it is less than it was at the end of last year. when you do not collect those payroll taxes, that means you do

not collect as much revenue. that means your budget deficit is going to go up unless you reduce spending along the same lines. if the government stops spending, you would not get the fiscal stimulus you get from giving up the tax credits. economists are saying that the economic recovery is weak. the administration and the republicans agreed that they needed to go for the tax break. they extended the tax cuts for another two years that the bush administration passed in 2001, 2003. if he were removed -- if you removed all of those tax breaks, that would, in fact, eliminate $4 trillion from the deficit. that would take a lot of money out of the economy that is currently going out to everybody. that would, perhaps, send the

economy back into recession. host: let's hear from fairfax, virginia. jim -- jim, you there? go ahead. caller: i am coming from new jersey. host: go ahead. caller: yes, hi. my question is this. i am a moderate on both sides of the fence, republican and democrat. the thing is this -- why do wall street get dollars with the tax bonuses? and everything else, and the poor in this country get almost nothing. we have not had a social

security raise in three years. like what happened -- i am a moderate. i knew president george bush personally. i know some other people on the democrat side as well, personally. i can not -- cannot figure out why this country wants to give wall street so much money and give us, the poor, who cannot work, nothing. host: let's hear from our guest bang. guest : one of the things that has angered millions of americans is the bailout of wall street. the secretary of the treasury, hank paulson, under president bush, asked for $700 billion to stop a financial crisis in its tracks. they succeeded. a lot of that money went to shore up the balance sheets of

the banks. by march, 2009, when now president obama was in office, the stock market had gone down to around 6500. i cannot remember the exact number. businesses all over the country were panicked that they could not get any of their banks to loan them a dime. as the money filtered out. as the fed took emergency action to pump money into the economy and loosen credit conditions, it put a brake to the downward spiral and has allowed the current economic recovery, weak as it is, to begin to emerge. in the process of doing that, it engendered a tremendous amount of anger in the economy, precisely along the lines of what the caller just expressed. my social security is frozen. nobody is bailing me out. my neighbors are losing their jobs. they can read in the newspaper

that the banks are returning to health and wall street is once again declaring bonuses for top executives. there is a popular street in the american people that does not like that. probably for good reason, although we must remember where we were. i think the head of the federal reserve ben bernanke has said that we were on the cusp of another great depression. he was a student of the great depression. what government needs to do when you are in that kind of situation is pump money into the economy. he succeeded in doing that. it stopped us from having a truly cataclysmic economic event, but it has left this aftertaste in the public's mouth against anything the government does to try to redraw and -- regrow and stimulate the economy. host: we have about 20 minutes left with our guest. he is merrill goozner of "the

fiscal times." caller: good morning. thank you for taking my call. i would like to preface my comments by noting that the tea baggers seemed to be the uncle tom's of our day, working for their corporate masters, in contrast to the demonstrators of the 1960's, who, if you believe the so-called liberal media, or financed by the soviet union -- were financed by the soviet union. ha, ha. i consider paying taxes my patriotic duty. i do not go along with most of these tax cuts, even the ones that affect me, because they are relatively meaningless. most of the money goes to the giant corporations. also, the -- the capitalist

system has -- we are told has this rational, economic system. i have not seen any evidence of that. it has got these boom-and-bust cycles. it's things that unemployment should be at a non-0% rate for optimal circumstances. host: we have the points. derogatory terms aside -- we asked folks to keep it as civil as they can -- what do you think about the points he is making? guest: i think it is interesting to hear him talk about being willing to pay higher taxes and that ted tea party people are somehow disingenuous -- the tea party people are somehow

disingenuous. most people oppose cuts in most things. a very large majority of americans do not realize they are getting benefits from federal spending. for instance -- i think a popular cry last year was the government should keep its hands off my medicare, as if the government was not paying for medicare. people are busy. they do not pay close attention to how a $3.7 budget works. in many ways, you could say, why should they? when you get into a crisis or a political stalemate like we have now, then people sort of run with half-information. i think that is unfortunate, because it really does lower the level of discourse here in washington, because they can appeal to people with slogans -- the politicians can -- without

educating the public about what the realities are. if you're really interested in long-term solutions to our problems, that isn't an effective way to run democracy. host: here is our right up in "the washington post -- a write- up in "the washington post" about a poll. they talk about private investment being the key. they do not want higher taxes or tolls. what private industry to pay -- they want private industry to pay. is that realistic? guest: those are the ways that we build roads, historically, either from government spending or from tolls. there was a huge debate in the 20th century over whether or not

this great idea that, eventually, president eisenhower put in place, are interstate highway system, about whether it should be private-toll roads or whether it should be government funded. the government said this would be a free highway system. it is fascinating to talk about infrastructure spending, because the president would like to see the high speed rail system -- high-speed rail system in this country. i have been around the world. i lived in japan for four years. their high-speed rail system unites the country. it is truly a technological marvel. they are fun. they would change the way that are spatial relationship in the united states exists -- our spatial relationship in the united states exists. the interstate highway system promoted sprawl.

everyone understands that. there were new restaurants, new motels, new industrial parks, new office buildings. it promoted that. if we were to build a high-speed rail system in this country, it would have the opposite effect. you could say it does not pay for itself now. there was a column in the washington post that articulated that view. this does not pay for itself. it is an expensive way to go. that would of been true about the interstate highway system if you look at it as a budget item in the 1950's. what you found is that there was a tremendous upsurge in the amount of the automobile use, which generated the taxes in order to pay for it. this is traditionally what infrastructure spending has done in this country, whether you go back to the erie canal, the transcontinental railroad,

highway system. people would argue that is what the high-speed rail -- it would create more housing closer to cities, create density, create new economic development. it would generate new jobs and new taxes. however, you cannot do something like that unless you're willing to pay for it on the front ian end. should that mean a higher gasoline tax? perhaps. should that mean higher fees on something else? it asked to be one or the other -- has to be one or the other. host: hey there. caller: we're seeing lower taxes on paychecks, which is wrong. my ssi went from $40 per week to $50 per week. they are taking 1/7 of my

paycheck just aren't being fica -- just on the fica. people do not pay taxes. i agree with arizona. they ought to be taken and put out. i lost my job recently. he hired a mexican to take my place. that may be bad to say -- but he does not pay taxes and he does not pay taxes on him. there is nothing i can do about it. then he is fighting unemployment. i have been working since i was 13 years old. i am 57 years old. it does not make sense that i could lose my job to it an illegal and the government does nothing about it. host: mike from missouri there. guest: it is interesting to talk about illegal immigrants and what they contributed the economy. if you give a false social security number to an employer, which is the way most immigrants find employment, they

have a payroll tax is deducted and it goes into a number that they never collect benefits on unless they become a citizen. it is a mystery -- a question to me, rather than an answer about what the net benefit of an adult -- illegal immigration is. the larger question that the caller raises, and i think this is serious, it is, when you have 9% unemployment, is this a time when we can have as many people flowing across the borders who take our jobs back and not too long ago, americans would not have wanted to take? you see that the plants are filled with illegal immigrants who were willing to take minimum-wage jobs to make sure we have meet on our tables. it is a serious question about who does what work in the society for how much pay.

people who look solely at the illegal immigration question as somehow stealing something from other people have not looked at the complexity of the question. host: let's step back and look at this week's house debate on the current budget year. we have been talking about future years, but the current year is still up for grabs. here is a little bit from speaker boehner on spending. >> we are broke. what is really dangerous is if we continue to do nothing and allow the status quo to stay in place. when are we going to get serious about cutting spending? our members want to take this leap forward because it has to happen. it needs to start now. >> but, mr. speaker, if you work and as -- serious about cutting onnding, wouldn't you focus cutting the defense spending? you are not dealing with the military or entitlements.

you are dealing with a small portion, about 16%, of the budget. >> this is the first step. as i have said, there are many cuts to follow. there are some defense spending cuts. there are mandatory spending cuts that he will seek brought to the floor in the coming weeks. you will see our -- that you will see brought to the floor in the coming weeks. the president has asked us to increase the debt limit, get he will present a budget tomorrow that will continue to destroy jobs -- yet he will present the budget tomorrow that will continue to destroy jobs by borrowing too much and taxing too much. host: for most of this week, the house will take up the current year's budget. what are they proposing to do? guest: the big noise today will be the president's proposed 2012 budget. we will see lots of charts and graphs in tomorrow's newspapers about what he has proposed.

then, i think the discussion will immediately turn to this year's budget, which we have not passed yet. we have to figure out where we're going to go in terms of spending this year. the continuing-resolution approach is essentially a freeze in spending, not just for domestic spending, but also for pentagon spending. we have seen some articles recently where the pentagon said this could have some serious repercussions. they continue to spend as if they were going to get the increases they were expecting all along. this is a two-sided sword on the hill for the republicans and democrats. i think the democrats might go along with the continuing resolution to the end of the year. after all, that is a freeze on domestic spending, which is what president obama is proposing in his budget. it is the republicans who have so far refused to let defense spending cuts on the table.

the democrats have also refused to put serious defense-spending cuts on the table. if we move through the current fiscal year -- as we move through the current fiscal year, this will be where the debate plays out. what will be the mix of spending cuts that will enable us to get through to the end of the fiscal year? los >> when you were asked by a twitter -- host: one viewer asked via twitter -- guest: that is spending at 2010 levels. year in fiscal year 2011 now. the president is about to propose 2012 now. this would be like saying we're going to spend in 2011 what we spent in 2010. host: we have the potential for government shut down if there is no continuing resolution passed.

is that possible? guest: it certainly is. you just have to remember back to 1995 when president clinton and republicans, in control both houses, had a showdown -- in control both houses, had a showdown. republicans have tried to be very quiet about that option. they remember what happened in the wake of that option. that rebounded to the president and a bit, not to congress's -- to the president's benefit, not to congress's. host: last caller. caller: i am in boehner's district, taking care of my aging parents. right down the street from their own is aplant -- their home is a plant being torn down, which thousands of people had worked

in. we're also write down the road from the air force base where kasich -- right down the road from the air force base where kasich turn down money that would have brought jobs into the area. where is the money that boehner is talking about? i would like you to address the $1 trillion that he said would come in from overseas accounts. i would like c-span to actually do a program on that. someone called in and mentioned our progress people freezing their incomes or reducing them. i would love to see c-span2 program -- most of our reps are millionaires. the good symbolically freeze or reduce their incomes -- they could symbolically freeze or reduce their incomes. i wonder if this gentleman knows of many wealthy people doing

that. host: let me get an answer. guest: there are a number of things she has tied into that question. i'm a graduate of the university of cincinnati, so it is fun to talk about southwest ohio. it sounds like she is from the dayton area. i know many of the facilities she is referring to. john boehner's district is an extremely conservative district and has been since i went to college many years ago. that has not changed much over the years. i mentioned this earlier and it bears repeating. one of the great military programs we have is the second engine, which would be built in the eden vale -- edendale plant next to his district. when you talk about congress, millionaires, cutting salaries -- yes, there is the millionaire club, but the reality is, if you eliminated congress, he would

barely be putting a dent in the overall budget -- you would barely be putting a dent in the overall budget. that might be the populist cry people could make, but as a budgetary mechanism is not that effective. as far as john kasich, a former congressman, who ran for governor in ohio, canceling the high-speed rail system -- states are very hard-pressed. to turn down federal money with even small matches is a serious question. the president needs to deal with that when he talks of art high- speed rail. a final thing she talked about was eliminating their use of medicare on the hill. that is -- there is some discussion about means testing for benefits like medicare.

i'd think that is a huge issue. those on the left would say this undercuts political support for the program. it is important for to be universal. there are those on the right who simply want to cut the program across the board, as opposed to focusing in and saying, if you are well-to-do, this is a narrow strata of our population, 10%, 15%, who could probably pay for their own health insurance in retirement and not have to take medicare. if we were to cut benefits for those people, would it be the end of the world? probably not. i think those on the left would argue that this might undercut political support for the program, which means it might be taken away from the people who really do need it. host: our guest has been merrill goozner. thank you for your time and insight. we will take a short time out

and then talk about school choice and voucher programs. first, an update from c-span radio. >> it is 32 past the hour. white house budget director jacob lew, in remarks on abc's good morning america, says that the budget is a balance of spending cuts and shared sacrifice. he said that any thoughts of a budget surplus anytime soon are unrealistic. he added that "it's enough to break your heart." you can hear his comments live at 10:20 this morning. more on egypt's ambassador. he says the 82-year-old former president, hosni mubarak, may be in bad health. two cairo newspapers are reporting that mr. mubarak is refusing to take medication, is depressed, and is -- there is no

immediate confirmation of those reports. in an netanyahu, israel's prime minister, says there isn't -- benjamin -- benjamin netanyahu, israel's prime minister, says there is an earthquake happening throughout the region. he says that he remains prepared for any possibilities. those are some of the latest headlines on c-span radio. >> the patriot act passed after the 9/11 attacks made it easier to conduct surveillance on some suspects. all the history of that bill through today online with c- span's congressional chronicled. -- chronicle. find the full archive for every member at c-span -- c-span.org/ congress. "washington journal" continues. host: our guest now is andrew

campanella, senior adviser for the alliance for school choice. this is titled "hope for america's children." what were the main takeaways? guest: we talk about the success stories of america's 20 private school choice programs. they serve 200,000 children in 12 states, including the district of columbia. we're seeing a record number of students enrolled in school choice programs, school voucher and school tax credit programs, with an overwhelming success. higher graduation rates, higher student achievement, higher parental satisfaction, and taxpayer savings. school choice is working, but we need more of it. host: why is it working? what is special about the program? guest: when the parents the opportunity to is choose the best school for their children -- when you give parents the

opportunity to choose the best school for their children, parents are empowered to make a difference in their children's education. they can send their child to a great school. frankly, when you look at some of the options out there, private schools -- you put a low-income tout in a private school and they are three more low-income child into a private school and their three-times more likely to get a college education. host: what is the message to policymakers? guest: when we drain $670 billion and our economy every year because of the achievement gap between -- otu of our economy -- out of our economy every year because of the achievement gap, that is a huge amount of money. that is not the america that we hope to be -- an america where we except failing schools? we should not have a failing schools. we should have schools that succeed.

host: the message to policymakers is, enough of the draining of the money. guest: enough of the millions of dropouts. it is time to give parents options or hope for their children. host: our guest is andrew campanella. the website is allianceforschoolchoice.org. we'll take calls from republicans, democrats, and independents on the topic of school choice and education- water programs -- education- voucher programs. guest: we are seeing president obama is recommending an additional $3 billion for domestic spending on education programs. at the same time, the president and head is a -- and his administration have tried to cut a certain program that has served as a lifeline to help lower-and some children go to

better private schools in the district -- lower-income children go to better private schools in the district. we hope that, within that $3 billion, the president could find a few million dollars to provide scholarships to the kids who need it most. host: have you heard rationed out on that? guest: robert gibbs tried to give a rationale, but we did not get much. we have heard from education secretary arne duncan now we cannot have school choice, because, if we do, it will not save every child. that is like saying if there are not enough lifeboats, nobody gets one. we need to try to save as many children as possible and school choice provides that option immediately. host: what exactly are we talking about? guest: school choice means a lot of things to a lot of people. to those of us with the alliance for school choice, what we focus on is school vouchers and tax- credit programs.

we also support charter schools, virtual schools, magnet schools, and improving public schools. host: let's hear from sarasota, fla., peter. caller: thank you for taking my call. mr. campanella, the state of florida had about your program under gov. jeb bush. i was wondering whether you would be able to comment on your thoughts on how it went here in florida. i am a hungarian-american who is a product of both public and private schools. my mother is a retired schoolteacher from new jersey. i would also like to ask you one other point, then i will hang up and listen to your response, and that is in reference to a topic that was a thorny one with someone like myself, a simi retired educator and small- business owners -- semi-retired educator and small business owner.

i would like to possibly comment a bit about stafford loan fraud, which is relative to the budget issue that mr. goozner and our host discussed earlier. i think that is a topic that is a vital and that the american public is not aware of. there is a great deal of stafford loan fraud. we have a program which was attending to investigate as a journalist, where there was undue loan fraud perpetrated. i will let you respond. guest: thank you for your call. your mother was a former schoolteacher in new jersey. my mother is the current school teacher in new jersey. she is doing a great job, as are many of our public school teachers. we need to salute them. in terms of florida school choice programs, we have two of them. there is the corporate-tax credit program and a scholarship program for students with

disabilities. florida has provided a success story for the nation. the scholarship tax-credit program has yielded student achievement increases that puts students in the program -- these are significantly-disadvantaged students -- on par with their peers nationally. they are doing a lot better than they would have had they stayed in many public schools. the other program has incentivized public schools to improve and by providing innovation and healthy competition. people should look to florida as a success story for the nation. you talked about student loans. i am not sure about this dapper issue you are talking about. in the president's budget, he proposed billions of dollars for pell grants, which are nothing more than vouchers for higher education. they were on higher ed. why not catered well? -- why not k-12?

host: santa cruz, california. go ahead. caller: you did not mention home schooling at all. i think that is important because it gets children out of the indoctrination. who funds your alliance? we cannot do anything in the schools unless we get rid of the unions. it is counterproductive to the children. obama is just -- he is -- they are the reason they got rid of the doctors in d.c., which desperately needed them. host: who funds your organization? guest: thousands of people who make donations to support school choice. who funds the anti-out campaigns? i think -- anti-voucher

campaigns? i think susan hit on that. it is the school -- it is the unions. the teachers' unions are on the wrong side of history. there are certain to get school choice programs eliminated. the people paying the bill are the hard-working teachers having money taken out in dues, in many cases without any choice, and they do support school choice. it is unfortunate. host: home schooling -- guest: homeschooling is a good option. i love that out when i was mentioning other options -- left that out when i was mentioning other options do we need to have all options on the table for parents. to reach equality, we need quality. host: we have a separate line for educators and students. here are the first three.

the fourth line as well. we assume we can get those calls on any lines, but we wanted a separate one as well. andrew campanella. it is dan on the democrats' line. go ahead. caller: hello? host: where are you calling from? caller: orlando. the florida supreme court decided that vouchers were unconstitutional. the divert money from public schools -- they dead bird money from public schools. many of them can go to religious -- they divert money from public schools. many of them can go to religious schools. jeb bush was a partner with a group that opened the first

charter school in miami. bush said he wanted to destroy the department of education. what better way than to divert money from our public schools into private schools? republicans want to privatize the entire government, and they want taxpayers to pay for it. guest: i think it is interesting that we live in a country where we have millions of children trapped in failing inner-city schools and people are up in arms because we might want to save a few of those children and put them into schools where -- when you take a low-income to out and put them into private schools, they are -- low-income child and put them into private schools, they are three times more likely to go to college. people are so upset about the specter that these children might go to private schools, but yet i heard nothing about the children.

look at the numbers. there are 54,000 kids in florida's school choice programs. it is alive and well. it is a model for the nation. host: we have a republican caller for mr. campanella. caller: hi. how are you? host: we are good. you're on the air. caller: i lived in d.c. and i worked with the opportunity scholarship program. i cannot tell you what benefit this program has. it is about saving as many kids as we can. i totally agree with everything mr. campanella has said about the positive affect about your programs have an educational program -- the voucher programs have on educational programs. i am a schoolteacher. when parents have options,

education get better and better and better. i want to say that i totally support the voucher program, school choice, and the scholarship program. host: let me ask you more about the district of columbia. we saw the story about speaker boehner, who endorsed a bill to expand the voucher program in the district. what kind of lift does this kind of endorsement give to your effort? guest: the d.c. opportunity scholarship program that. -- that harrieta called about has yielded a 21% increase in graduation rates over kids in the traditional schools. i have met many kids to participate in this program. their lives have truly been changed. one mother who sent her child to private school using the program recently wrote a letter to "the

washington post." she said that a voucher bought her so much more in terms of her child's future than $7,500. i do not know what could say it better. in our 50 biggest cities, 40% of our kids never make it out of school with diplomas. 91% graduation rate in washington, d.c. this program needs to be saved, restored, or expanded. host: how does the program work? guest: the parent makes the decision on where they want to send their kid. they have accountability. there is strict accountability for school choice programs. the parent makes a decision. the government, in this case the federal or state, writes the check to the school. perron, as the taxpayer, as the czech and turns of -- the parent, as the taxpayer, is the

check and turns it over to the school. the amount is far less than we pay per child. host: what about available spots for kids in voucher programs? guest: there are about 1 million and the seats in private schools across the country. what is a huge sin is that kids are confined to a failing schools. their families are told they have to wait five years for the district's plan to be implemented to get their child into a better situation. blocks away, there is a private school willing and able to take that student, it there was a tax-credit scholarship -- if there was a tax-credit score ship or other program. we have to help these kids right now. we cannot tell them five years from now. what kind of country does not make us? host: we have a caller on the

line. good morning. caller: i am amazed about the discussion about how poorly schools have been run. it isn't the schools. it is the parenting. i have taught in schools around florida. you have students who are willing to work and study. the school does fine. where you have parents who do not get engaged in the education of the child, all schools fail -- i do not care if it is about your school or whatever kind of school. there must be printed before we are going to educate our children -- parentage before we're going to educate our children. host: what would you say about the role of parents? guest: we have to give parents an incentive to get involved in their children's education, which is through school choice. the failures in our education system are not because people do not have money and cannot send

their kids to better schools or because they do not care about their children. i have met many low-income families who cared desperately about their children's futures pit to say they are not good parents and that is the reason our inner-city schools are failing is a travesty. there are parents who, on the first day the programs open up, lined up around the block before dawn to get their children in. low-income parents cared deeply about their children. they want what is best for them. what is a cop out is to say that -- education is hard. of course. why would you get into the profession if it was not? it is the single-most important thing we have to do as a nation. we have to do a better job. host: a democratic caller from indianapolis. good morning. caller: my wife, her sister, and most of our friends are school teachers, from public schools to private.

the most complaints i hear about our parents who do not care about their children's educations -- are parents who do not care about their children's educations. the thing -- the charter schools take away the best students and money from the costumes, especially inner-city schools. -- classrooms, especially inner- city schools. it would be so nice if the kids that had to go to charter schools were elected by the teachers, the students who do not get help from home and really need help. i do not know the answer is. i'm depending on somebody like this young man who was talking about education. he is well-educated. we need your help. students who not -- do not get enough help from home need your

help. the parents are not helping. thank you very much. please help our inner-city kids, the poor children who have good intelligence and do not even have parents who care where they go to school. host: i have to -- guest: i have to stand up for the parents again. this is not an easy issue. education is not easy. people are not called educate because they think they're going into an easy job. they know it is challenging, difficult. they know it requires being in your feet all day, working hard, and, unfortunately, working with a wage that is not commensurate with the impact they make on kids pick it is not easy. we have to except things. do we have party -- we have to accept things. do we have poverty?

yes. i went to public schools my whole life. we cannot use what happens at home as an excuse for what happens in the classroom. it just will not cut it anymore. we're 35th in the world in terms of matt and -- math and literacy. we cannot make excuses. host: here is a question from twitter. guest: charter schools are held to extremely high standards. they get less money than traditional public schools did they are doing a great job. look in harlem at the schools there. look at seed schools. charter schools are educating students at high levels and they are giving kids hope. that is why you see lotteries where parents go to get their kids into charter schools. these parents are lining up by the thousands to get their kids

into a great charter schools. people who do not like charter schools are people who think they threaten the funding stream for traditional public schools. there would not be a threat if parents were truly satisfied with their public schools. host: here is another one. guest: i completely agree. just because teachers are in unions does not say much about the teachers themselves, other than the fact they are having money, in many cases, automatically and unfairly deducted from their salary. they cannot negotiate for their own salaries. i think teachers are great. we have a lot of wonderful teachers. we increased spending by 216%. educators who are doing a great job are not seeing any of that money. that is not fair. host: "the baltimore sun" shows

that the city is offering a buyout for teachers. what goes through your mind? guest: we have such a screwed up system when it comes to hiring and eliminating teachers. you either eliminate the people who do not have tenure of or you try to buy out the people who are making the most money. maybe it should dawn on the bureaucrats that we should let the best teachers day in and eliminate or terminate the bad teachers -- teachers stay in and eliminate or terminate the bad teachers. your salary is commensurate with your performance. if you aren't doing a good job, you can move on and do other things. host: springfield, bernard, an educator. go ahead. caller: i am of four full-time school teacher and currently a schoolteacher -- a former full-

time school teacher and currently a substitute teacher. i heard some words regarding low-income neighborhoods. these children "might" go to a private school. low-income neighborhoods cannot even get grocery stores now. it is meaning -- having to subsidize or incentivize in the charter school into the low- income, high-islands neighborhoods. -- high-violence neighborhoods. there are many great public schools. in knoxville, tennessee, a gentleman started a program that shared information between public schools. i work for someone -- work for someone in dallas, who said no employee took a job designing to fail. i do not believe there is one schoolteacher who has taken a job in the public school system

who desires to fail. we need to exchange information on what the excellent public schools are doing. what is the difference between them? i have seen statistics that charter schools haven't necessarily produce that much better results on standardized testing ban public schools -- than public schools. you are attacking the system because you're anti-union. when i hear that an individual should be able to negotiate for their wages -- the reason unions are in existence is because it does not work when you are one-on-one negotiating with a big machine. you can only negotiate and mass -- en masse. i take exception to your desire to destroy, if you can, the public-school system. guest: trust me. do not worry. i am not destroying the public- school system. in many cases, they are destroying themselves. we have a moral obligation to

get the children out. it isn't about the school building or about adult jobs. it is about the kids who need immediate options right now. they cannot wait for teachers to get together and talk about what is working and what is not. i'm sure you could do that. i'm sure schools are doing that. where kids have no hope, where they are scared to go to school, where they are not learning, where school is basically a prison, let's get them out and into a better environment. it has nothing to do with privatization. it has nothing to do with destroying unions. i think unions are doing a great job of painting a picture for what they stand for, totally aside from the great work their members are doing. this is about helping kids. host: st. augustine, fla., scott, an independent caller. caller: i'm going to have calm you down on the florida

situation. jacksonville has gone a long way into vouchers and even privatized their school bus system. their system is a complete disaster. for instance, they opened a charter school in jacksonville. halfway through the school, they took the money and left. property owner -- those children did not get an education. they did not even get books. you are taking our tax money and lending your books with it. guest: money never gets to teachers. it stays in the central office for multiple layers of bureaucracy. it is outrageous when people examplest one or two advantag of bad schools.

$607 billion a year is drained out of our economy because of an achievement gap. at is averages. -- that is our rages. -- that is outrageous. 30% of our eighth graders can read at grade levels. i will talk about a system that is failing and the way out for kids who need help right now. host: by the numbers. private school choice programs around the country, 12 plus the district of columbia.

host: what has economic conditions meant to these types of programs? guest: that is a good point. we started analyzing all the programs. we expected to see a decrease and a decrease in the amount of students given the terrible economic situation. " we found is that thanks to democrats and republicans working together, all these school choice programs were protected. it is a bipartisan movement. we have seen corpse stepping up and making donations to these tax credit -- we're seeing corporations staking -- stepping up and making donations. 2010 was a good year. we're hoping 2011 will be even better. host: we have a student on the line.

caller: how are you doing? i am a student in florida. i heard three people say, florida has the worst, the worst voucher program. the public -- they get the public schools money. the regular schools, private schools -- public schools do have to take that kid. we have the worst dropout rate in florida. guest: those are not the facts. flores tunes do take tests. they are usually -- florida students do take tests. the usually rigorous. they funded scholarships. 54,000 students are benefiting for them. they are low-income kids and

they are getting a good education. this has been one of the most studied issues in the state. this event students are outperforming their peers nationwide -- disadvantaged students are outperforming their peers nationwide. i appreciate your passion. i disagree with your facts ho. host: we have a twitter message from milwaukee. guest: the milwaukee program has been a huge success story. a study came out last year that showed that students in the milwaukee choice program, despite it has been a legislative it pinata by people trying to herded, has a student graduation rate that is 80 percentage points higher than that for kids in traditional

public schools. that program should be improved and expanded this year. host: what would be the knocked it? on guest: i do not know. there has been a little bit of legislative beating on the program in the last few years, which we're hoping will be resolved. host: cindy from missouri. good morning. caller: the you hear me -- do you hear me? my kids transferred from public- school to private school. there are now young adults. i have a policy question going forward, here in mo. last year we voted not to accept the race to the top funding.

this year, the big, big concern is a new program that is being instituted by the department of education. it is not going through the legislator. it is called a common core standards. my concern is my understanding of the program is the common core standards is set to implement the standards in all schools including private schools so that if a person wants to go to a private school, they can, but they still get the federal curriculum. that is a big problem as far as i'm concerned. part of the problem with the public schools is the federal curriculum. can you comment on the danger of the common core standards? where do we go forward on that? guest: our organization does not have an official standing.

what we hope is that students who go to private schools and participate in school choice programs go to schools that work for them and work for their families. we hope programs that are passed are accountable. the programs are trip -- so the programs are transparent to taxpayers. that is important to us. what they teach, i don't think that will go over well in the private school community. private schools are doing a heck of a good job. we do not want to change a good thing. changing private schools into government-run entities. host: bonnie from new jersey. caller: i am a graduate from new york city public schools. we had more effective schooling with a whole lot of funding.

40% of minority is where i grew up. i was in a position when i looked for a home, i shopped for a school district. middletown, new jersey, it is very well funded. our schools do quite well. the disparity in how our schools are funded is the big deal. you think it is a good idea where we should hold for charity. if the corporations were paying their fair share in taxes without the loopholes allow all the write-offs, those schools could be nicely funded. children will not have to take classes in janitor closets because there is no room for them to learn. there would be dignity in those schools. they would get a good education. there is the disparity of wealth in our nation. a child goes to school hungry,

there's no good chance for them to learn. a single mother raising children. she has to worry about working three jobs to keep a roof over their heads. there is not much time to sit down and to help them with their homework. the other thing is the charter schools you are trying to bring into -- lester, there was a study. the testing, the national standard testing did not show any significant differences. they did not do any better than public schools did. do not leave the money from the public school systems. guest: the reality any switch to a talking point. the reality is the scholarship program that has been proposed in new jersey is a corporate- funded program. it would impact 130 schools that

are failing. the state senator said these are school districts that spent more money per pupil than anyplace else on the planet. the school choice program being proposed in new jersey would only impact 13 pilot districts. the lowest amount of results are being achieved. i think it is an idea whose time has come in new jersey. it is time to go with this scholarship proposal. it is being carried by democrats and supported by the governor. listing to the calls, everybody has a study. -- listening to the calls, everybody has a steady. what works is giving parents options. a private school, any of the other options that they can have. i sat next to a student a few

weeks ago. the student sat next to me he was telling me how he went to school that was not in his district. the investigators found him out and they kicked him out of the school. he's a sophomore in high school. his brother is a junior. his brother cannot read. he was told he was lucky because he gets a private scholarship to go to a private school. the kid turned and said, if this bill passes, maybe there will be 100 in the millions instead of just one in a million. it is better to save some kids than none at all. we do this for kids like that. kids whose brothers cannot read and hope one day there will be able to achieve more than their siblings have. that is what this bill is about. it is about helping. host: which states are launching similar programs? guest: we're hopeful that the

program may pass soon in new jersey. pennsylvania has a voucher program for low-income program. we're looking at new mexico where a scholarship tax credit program may be passed. host: what is the relationship between federal and state money? guest: most of the programs are funded by state governments. host: last couple of calls. for becker, an educator -- rebecca, and educator. caller: i have been a part columbia going into a school that had a high achievement gap and we have been closing it. it is not as severe as kansas

city and st. louis schools. but to save that we're going to accept things the way they are, that we can only reach certain students and leave many behind. with my experience in turning the school around, i cannot buy that. we can do that in all schools. guest: i think it is great that you work in a school that is turning itself around. we need to look at success stories and duplicate them. it won't happen overnight. we do need to save some kids. we are 35th in the world. we're being beaned by korea. there are some statistics that show -- we're being beaten by courier. our school system is not accomplishing what it set out to do, to educate every child at the highest level so kids can

get good jobs so their families can be stronger. these are the hopes and dreams that parents have for their children. these are not the hopes and dreams that are being fulfilled in many of our inner-city public schools. host: gaithersburg, md., an independent caller. caller: i have heard people: saying that involvement is needed. then i heard the support that parents want to be involved and march for school choice. every parent wants to be involved. we're sending our kids into total drug zones where promiscuity rates are high. the help correct -- the health curriculum wants to push

contraceptives education. kids want to look like each other. they did not want to look too geeky or two square -- or too square. foul language is pervasive. they have clear guidelines. students know where to -- students know it. there can be a better use of funds. we have teachers pulled at of classrooms because of infringements against students. whether it be sexual harassment or things like that. we have to provide work. we cannot fire them even though they were found guilty in courts of law. host: lots of passion.

guest: we need to provide every student to access of education. we need quality. the best way to do that is to give parents the opportunity to send their kids to the best schools possible. there are 20 successful school choice programs server nearly 200,000 kids in 12 states and the district of columbia. the studies have come back extremely positive. kids are graduate at higher levels. parents are overwhelmingly satisfied. taxpayers are save big money. there is a glimmer of hope in places where there was not. the alternative is we cannot keep doing things the same ways we have been doing them. here is an option. host: alia lianceforschoolchoice.org is

the website. we of one segment left. we will focus on the future of fannie mae and freddie mac, what the administration has put out. john taylor will be our guest. + we will take some of your calls. >> a new communicate this hour from egypt's ruling military council. the statement read by a military spokesperson comes as thousands of state employees from ambulance drivers to police and transport workers continued to protest today demanding better pay and better conditions. protests are continuing in the region. more than 1000 people are protesting in the capitol of yemen for a fourth straight day. they are calling for the regime to step down.

animal mike mullins is traveling in the mideast. he discussed the instability in egypt with shimon peres today, telling him the american-israeli alliance is something we both depend on. he also met with benjamin netanyahu and travel to jordan for a meeting with king abdallah. this brief trip is to reassure american alice of u.s. commitments to the region's instability. those of some of the latest headlines on c-span radio. >> you are watching c-span. every morning, it is "washington journal," our live call-in program. wheaties, watched live coverage of the u.s. house. also, the supreme court oral arguments. on the weekends, you can see our signature interview programs. on sunday, "newsmakers."

you can also watch our programming anytime at c- span.org. it is all searchable at our c- span video library. >> "washington journal" continues. >> john taylor is back to the table, president and ceo of the national community reinvestment coalition. we have had headlines about the future of fannie and freddie. here is a headline from "usa today." what are you hearing? guest: they are saying that we have heard from all the stakeholders, from wall street, from banks, from consumers, think tanks, members of congress. rather than saying we know

exactly the right way to do it, there are benefits to several options. we will present those options to you and open up a dialogue on what the best track to take is in terms of mortgage finance so that we continue this robust system so home ownership is maintained. we want a safe and sound economy. host: what is your best hope and biggest worry? guest: the biggest concern is the exceptions that fannie and freddie play to major replayed a major role in the downturn or mortgage finance fraud. which to be recognized is they entered the space of the subprime much later than the private sector. it was investment banks, big banks who were creating

pipelines of product that basically was low documentation or no documentation, adjustable rate mortgages, interest-only, all these hybrid products which drew a lot of people in with teaser rates into homes and mortgages that were not sustainable. the problem is that the new system, the new options from the president shift the primary responsibility for mortgage finance to the private sector. the ones to lead us and let fannie and freddie down the subprime of thabyss. what is important is that it protect consumers from the kind of abuse we have seen. the fact is the free market brought us here. the proposal from the president is the free market will rescue us. hopefully that will be true.

we need a regulatory oversight and transparency. host: our guest will be next -- will be with us for the next 35 or 40 minutes. our guest is the president and ceo of a national community reinvestment coalition. you have a special background on all of these -- guest: i was not a shareholder. i got to see how they operated. yes, i am personally and professionally committed to making sure the system of mortgage finance is democratic with a small d. homeownership is still the number one ticket into the middle class. the key is to make sure that people who become homeowners are ones who can sustain the mortgage. that is what we need to clean up in our system of finance. the government has a role to play.

the private sector is where the money is when the money comes back eventually. tt and mixture of healthy private sector working in concert to making sure loans that are sustainable or the borrowers can show they can pay back for safe and sound loans. host: the administration is putting forth its plan to look at various proposals -- what are the steps here? guest: the president has proposed three options. the first one is free market with the exception of keep fha. the second is free market but we step in in a big quake should there be a -- shared the private sector stop making money available for mortgages and start lending. we step been. we create and bolster up the system of mortgage finance. the third option is a private-

sector option. we require mortgage insurance companies to collect fees the buildup the fund to insulate against losses. the government is behind that. i suspect loans that are low or maybe they are plain vanilla, 30-year fixed. the government plays a secondary role. it is more of an ongoing role. host: fannie and freddie -- freddie mac was established in 1970. how significant is that figure to you? guest: we would not have a mortgage market if we do not

have fannie mae, and the va. what has happened is investors are skittish about coming back into the american economy and investing hundreds of millions of dollars. without those zero government- sponsored enterprises, we probably would not have a mortgage market at all. host: there is that figure on the screen. a number that is sure to get some phone calls. let's take that number and put it into perspective as far as how to move forward. guest: consider the number of nearly 14 trillion. that should not have happened. have the government been ahead, the previous administrations have been ahead of this, come they would have limited the size of fannie and freddie in terms of how much market they could

capture. the would have required adequate capitalization. there would have limited the kind of risks they would be taking. fannie and freddie stayed out of the subprime market through 2004. they got in with both feet. they were able to get in in a big way. it is a dead argument. the president and people in congress will abolish fannie and freddie and want them down. i suspect the hope is that the $150 billion would be less then fannie and freddie take little risk and take a segment of the market in terms of securitization which is highly profitable. hopefully when they do wind down, that figure will be dramatically reduced. the system will be replaced by something that guarantees the

continuing flow of mortgage finance in america. host: our first call, louisiana. caller: when i was young, i could not afford a house. i needed 10% or 20%. this was in the 1970's. i had to rent for years. i found it bought a home -- not a home that i wanted or desire, but a home that i could afford. chris dodd and barney frank caused this debacle. bush tried to fix this. the congress said no. i am sick and tired of bailing out all these people who made these bad decisions. i think they should go to prison for making these bad decisions. they should be prosecuted. the shakira fannie mae and freddie mac. it has been a burden on the

people and the public that are trying to do the right thing. host: we have heard that a lot. guest: the president agrees with you, that we should carry of fannie and freddie. the justice department is working to put people in jail who committed fraud and abuse. they are trying to clean up the system of how these things get securitized and how things get invented, particularly on wall street. that means create a council that is able to look at the rating agencies and creating more transparency. i don't think it is fair to blame barney frank or chris dodd because both of those judgment proposed legislation several times and it passed in the house, to end the abuse of the kind of loans that were

being made solely for the purpose of collecting the feet, knowing the borrowers would not be able to sustain these loans. that was defeated unfortunately. i have to say that the biggest culprit for me in all this is phil gramm who stood in the way of all efforts to try to end predatory lending. i think we would not be looking at 100th $50 billion in losses -- would not be looking happen $150 billion in losses. host: explain some rules and place in terms of fannie and freddie. they want to reduce conforming loan limits. what is the amount they are looking at? guest: $729,000. those of the maximum mer

mortgages that they can purchase. pushing back into the finance market. the suspicion is that it will reduce considerably the amount of market share of fannie and freddie and fha. host: first goal to make a 10% down payment. guest: it is and increase per if you were to get and fha loan, you can get a standard fha loan if you had 3%, so that would raise that figure presumably. i believe that skin in the game applies to everybody. you need a homeowner, a banker, a wall street person per everybody has something to lose. when you have nothing to lose, you take whatever risk you want. whether 10% is the level, you

can be assured that there will be people probably are creditworthy who paid their bills on time but if you're buying a house for 250 thousand dollar,000 not a lot of people e that much money, but they could be credit worthy. we do need some kind of a minimum down payment. host: shelley from west virginia. caller: does the gentleman belief regulation on the financial markets -- banks especially? guest: absolutely. dodd-frank went along way in expanding that regulation. there is some 700 new

regulations that apply to the industry. whether they are effective enough to make sure that we keep this industry out of the business of doing unsavory lending remains to be seen. i think the notion of someone owning a home should be something which -- it is the biggest investment for most people. we should not allow the private sector to be in a position where they are able to abuse produce things that are untoward. people like to talked and point to the risk that private enterprise created. anybody who is to deepen this issue knows the role of wall street and the securitized and the with the whole subprime business was driven by profit and greed that took no concern for what happened to homeowners or what happened to the

sustainability of the mortgage. that has to end. without inhibiting the ability for them to compete and operate in the free market. we need to make sure they don't get abusive. that is critical. caller: do you believe that the housing market would be in better shape if we would help the home buyers stay in their homes rather than throw them out on the st.? and this happened under bush. thank you. guest: let me say i agree wholeheartedly that our economy is better served by taking those families who basically got into a situation where they had bad loans or maybe their income was reduced slightly, but they are

having a difficult time even though they are still working. we're better off -- every house in that neighborhood is better off not having another for closure. if the person is the working, let's see whether we can refinance or modify those loans into a situation where that family can continue to be a responsible homeowner, but the mortgage matches their ability to pay, which is what should have happened in the first place. as far as president bush, i think there's a lot of folks to blame for this. we did not deal with this problem. we went through successive eras of deregulation. this blind faith that somehow the corporate finance mortgage market is going to be more credible and less abusive and

more professional than any government role. the result is what we got. any analysis of what happened has to point a finger at the incredible role that these on a regulated, non-transparent institutions and wall street played in making this problem happened. host: michigan. welcome to the show, dennis. caller: mr. taylor, i have a couple of points i would like to comment on. saw onlinew if you that there were a lot of areas within the united states that were previously untouched by the for closure problem that are now facing possible possible for closures. do you see a bottom to this

housing dilemma? on my second point, i had seen some more than initially fanny or freddie have a program that was like the program that was a leased to own to keep people in the for closure homes. that either failed or they did not succeed in going forward to implement that followed. i think that would have definitely been a way to go to keep the tax base intact. and also to stops the blade moving from the neighborhoods. host: this is the headline the caller was referring to in "the new york times." guest: last year with a nationwide drop in housing values of 5.5%.

some areas are getting better. but the country continues to seek devaluation of properties. we have another 11 million for closures waiting in the wings to go in one direction or the other, and this will not help the situation. as the paper said and the caller said, places like seattle, which are pretty much immune from the huge devaluation, seattle suffered a greater devaluation that las vegas did in 2010. there should be a note to people about whether we're out of this crisis. he asked if there is a bottom. the bottom is one we deal with these for closure prices. helping as many people stay in their homes as possible who are still working and can be responsible homeowners is the

way to go. the initiative of the program, they have been minimally and tactful -- mainly in pack full -- impactful. we have to find a way to take as many of these foreclosures for families who can be responsible homeowners off the table by getting them into sustainable mortgages if we're to see the bottom. host: georgia on the line, a republican. caller: mr. taylor, right now in detroit, they are using our tax money to buy -- spending one to $25,000 per home and -- spending $125,000 per home and selling a those homes for $1,000. you know that is going on, mr. taylor.

my credit rating is 850. your credit rating is probably not 850, mr. taylor. if the people cannot put down 10% on a mortgage and i'm supposed to tell somebody -- sell some but more property and they cannot put down 10%, people like you guys want to comment and change the rules". you will pay so much unless you cannot pay and then you want to change the amount you pay. elipse change all the rules. three and three is nine. -- let's all change the rules. you guys are destroying america with your crazy ideas. host: let's get a response. guest: we are on destroying

america. the president agrees with you and the 10% down. all the president and the administration is trying to do and what we're trying to do is have a responsible system of mortgage finance, which insures that a hard-working blue-collar americans have access to home ownership as well. that has been a basic tenet of u.s. citizenship for as long as we can remember. that does not mean everybody is qualified to be a homeowner. if you are willing to work hard and you're a safe bar, you should be able to of access to the mortgage market -- if you're a sick borrower. before the 1948 in the early 1930's, if you wanted a mortgage from the private sector, that was the only mortgage you could get. there were five-year loans.

there was another bubble every five years. you had 50% down. that is what we had went fannie and freddie were created. that is what they did until 2004. most people in america could point to home ownership has more to do with fannie and freddie and fha and that is all government -- they all performed pretty well for most of their history. it wasn't until we fall this free-market into the abyss that we got into the problems we got into. whoo the president has a commitment and members of both parties in congress. to do it in a responsible way so we do not open up the avenue for more fraud and abuse.

i have no idea. i think we are on the same page. maybe he is overlying an ideology that makes him see differently. host: we have about 20 minutes with our guests, john taylor, president and ceo of the national community reinvestment coalition. we will continue to take more of your calls. several possibilities put on the table at the white house. tim geithner started this late last week. this was at an event at the brookings institution about how government played too much of a role in the housing market. >> the u.s. government provided too much support for housing, too strong incentives for investment housing. far.ok that too

alongside a basic set of mistakes and the incentives we created, we allowed our financial system to take on too much leverage. we allowed a huge amount of basic mortgage business to shift where there's no regulation and oversight. we allowed the market to build up terrible incentives around underwriting securitization. those things -- they were avoidable mistakes. it is important to recognize that this was not just about what fannie and freddie ultimately did to bring the market downturn it was about a much more comprehensive side of failures and the basic oversights in the system. the government did too much. it did quite poorly in what it did. host: avoidable mistakes, he said. guest: if we had limited -- if

we were clear about what was permissible from an underwriting perspective, for the industry as a whole, that is not to establish what they should be doing but what they could not do if we outlawed predatory lending. we probably -- we must carefully would not be in a situation wherein care if we require adequate capitalization from fannie and freddie so that the increased risk for had -- and that we limited the market share and were clear about what the guarantees or, i think for a lot of things we could have done and should have done that did not occur. finger-pointing at this point, leave it to the historians. what should we be doing to clean up our system of mortgage finance we continue to have the opportunity for home ownership going to people that are wealthy

and those working their way up the economic ladder. we can do it. host: to the editorial page of ""the wall street journal."

guest: they were bringing their normal fare self. there is grains of accuracy in that period -- the normair normr self. there is no question that the president has proposed what i believe to be a bipartisan perspective of people on the left and right who have been suggested what he needs to do. as far as planting on it -- as he has offerednting, different suggestions. "here are the options we're considering. input."people said. inpu's

if they ended friday and fannie tomorrow, it would be a disaster. they are the name of the game. if the war ended tomorrow, it would collapse of the system of mortgage finance in this country. we would be pushed into a recession. the president is saying we will face them out over a point of five to seven years. i think what they are doing is they are taking a sensible approach to, let's work on this together. we are in this together. we do not want to do is narrow the window of opportunity for home ownership to such a degree that we're keeping up qualified people because home ownership is an important aspect of entrance into the middle class, of building equity, of sending your child to college. we do not want the next generation of home buyers and families to have to squeeze

through this tiny sieve in order to get through the reality of home ownership. we can do that by offering a safe product and making sure there is safety and soundness and transparency and they are being put into place. host: warrenton, oregon. caller: i was wondering if the repealed glass-steagall by phil gramm, was that the trigger for all of this when commercial banks and investment banks, the line was erased and basically it was to the rodeo. guest: yeah. i do think that played a significant role. the push to deregulate banks and oversight the financial-services

sector coupled with efforts to not allow their to be laws that prohibited high risk and unsavory lending practices, i think they all contributed to having an industry that and least to do what they wanted. you rent small mortgage companies grow into giants like americaquest and countrywide that grew through their participation in subprime lending and tried to sell that with any terms and conditions to wall street investment firms that were flush with money and looking for a home to invest in. investment banks cut their fees. brokers and their lendings -- brokers and lenders got their fees. this was a ponzi scheme.

people were not getting sustainable loans. people might have known better than to take out these loans. what is ironic is we had more financial literacy programs than ever before during this period of the worst lending in our history. that cannot prohibit -- people did not believe that a letter or broker would make them a loan that they did not think it was sustainable. what a personal loan me money if i could not pay it back? that was a fundamental belief that most people walk into a bank or loan office always held. little did they know that no longer were these banks holding these loans in portfolios. they were selling them to wall street and all they cared about was the fee. if you talked a person into getting a higher mortgage with

an adjustable rate for non-prime rate, even if they qualify, you got a higher fee as a broker or lender. the system was corrupt. all those things did contribute to this. host: raymond, from california, and independent. caller: i have been falling this for a good many years. my first house, i bought when i got out of the service. guest: digit day -- did you get a gi bill? 4% interest, right? caller: yeah. i retired from the department of defense. we were involved in all kinds of things from contract management

and all this. i want to tell you something i experienced the fights. i approve this and many military contractors and their accounting system even though the government has all kinds of accounting people looking at your books. nobody understands the bottom line in the government because there is no bottom line. here is the whole thing. i look at this thing. correct me where i am wrong. i think i have it. what they are going to do today will be devastating. you are not going to find a lot of people who are going to be able to come down with this 10% and 20%. you'll eliminate a lot of young people of ever getting a house. the cost of living is going up. you're going to stop the housing construction, which the majority of our people in this country, blue-collar workers.

guest: i don't disagree. i think he makes some good points. thank you for server and thank you for reminding some money americans who take for granted their own interests are made apparent entrance into the realm of home ownership, it giually was to ththrough the bill. 4.5% interest. i do think you are accurate that as we begin to require a downpayments, as the down payment figure continues to escalate, you'll say new families entering home ownership, families of color, people who don't have the savings because they live from paycheck to paycheck.

they may be worthy borrowers. they may pay off their bills. they may be saving for a home. an earlier caller talked about ing a house. pbuy today, you have to, but $30,000, $40,000 per if it is 20% down, hire been 50,000. not a lot of working-class families have that capacity to enter that. this will cut out what i think are important households that would contribute to our national economy by being homeowners and would be responsible and who would pay their mortgages on time. some down payment is necessary. whether it has to be 10% remains

open to question. i don't see a huge difference between 5% and 10% versus 10% or 50% when it comes to putting down that kind of money. host: this is from "the chicago sun-times > ." there are some figures here. they have a small chart. mortgage amounts loaned to whites -- they published million but i think they mean billion. guest: the private sector is

pretty much abandoned people of color when it comes to mortgage finance. right now 80% of all african- americans have to do go tofha for their -- have to go to fha for their mortgages. that figure in closer to 65 ce% for latinos. we do not want more government involvement behind finance. we do not want to leave behind people of color and low and moderate-income people. all of them could be contributing to our economy. homebuilding could be devastated if we don't have enough buyers and if we continue to add to the vacancy rates of housing.

who will build housing if never its are filled with abandoned houses? we want to support a sustainable, healthy, mortgage system of financing, which includes the broadest base of people possible. with all the safeguards and soundest to make sure they are responsible borrowers. host: south carolina, rudy. caller: i took out a loan seven years ago. my wife and i -- my wife was working. i am on a fixed income. three years ago, she lost her job. i have never missed a payment. i have never been late on a payment. when i go to the bank to try to restructure and everything, they tell me i am approved, but

paperwork comes back and says i don't make enough money. if i have missed a payment or have been laid on payment since my wife lost her job, i cannot understand it. what can i get a 4.5% loan? where should i go? guest: he should go to the hud website in his area. if that is too difficult, call ncrc where i work. ask for a council and they will amount. he is trying to -- there is a program to try to help responsible borrowers get to stay in their homes and to have those loans modified. there are lenders who would like to try to help him in the process. host: michigan, david, a

democrat. caller: -- tell us -- glass- steagall was enacted after the great depression and it worked well for 50, 60 years. phil gramm pushed real hard for its removal. they were able to do what they did, they were not able to do what they did because of glass- steagall. we got stuck with the cost of their bad investments, something the would not have happened if glass-steagall had stayed in effect is that not true? do you think reinstatement of glass-steagall would help pull the please answer these questions. go in more depth. how glass-steagall