them to take on more loans for their college tuition. in addition, it makes cuts of the program of the national science foundation that would lead to elimination of huge research grants affecting thousands of researchers which can only have a negative impact on opportunities for minorities and all to make contributions in science and technology. i could fill up an hour of debate time all by myself if you were to list all of the terrible impacts that the proposed cuts to the department of energy, nist, nasa, nora and the e.p.a., each of these critical to our future competitiveness and each agency is slated for ill-founded cuts. . unfortunately, our children and grandchildren will ultimately be the up withs to pay the price for this misguided move. thank you and i yield back.

mrs. christensen: thank you. i'd like to yield three minutes to the other gentlelady from texas, congresswoman sheila jackson lee. ms. jackson lee: i thank the gentlelady for yielding and thank fer for leading. as i see my colleagues on the floor, let me just try to focus on one or two points and maybe on this valentine's evening, i think a lot of our colleague whors fortunate enough to have their spouses here rushed off and we're delighted. let me wish everyone a happy value intine's day and let me wish my husband in texas, far away a happy valentine's day. he might not be having such a good valentine's day because he's in higher education. frankly this c.r. is going to put more than a dent, it is going to put a real bite. this is an effort to show you what progress we made. private sector employment has increased for 12 straight months.

private employers added 1.3 million jobs in 2010. but they have to have an educated work force. as you can see, we're going up. the cup is half full, not half empty. but when you have the numbers i'm about to relate to you, where you're seeing pell grants cut 15%, mr. speaker, i met with my university, the university of houston, houston community college, lone star, texas southern university and if there was one thing that they emphasized is the equal opportunity provided to all students through a pell grant. if we are to go with the c.r. as it is, we are talking about a reduction in the middle of a school year of $5,550 to $4,705. dune what that does to a student? it doesn't tell them, let me try to ramp up my extra job. it says, i am dropping out. you know what happens to the work force? it disappears. so i am concerned that we are in this predicament. let me tell you something else. i have been a strong champion

of the cops on the beat program and we have seen evidence of the fact that we have gained in the downsizing or the decreasing of crime. the proposed c.r. will cut $600 million in funding to community-oriented policing and what will happen is 3,000 fewer officers. you can be assured houston, texas who got their first cops grant, just a few months ago, that i worked very hard on, will be one of the victims of that. let me just conclude by suggesting that one of the points my good friend, the assistant leader, made, community health clinics is not a partisan issue. it is to give access to all communities and particularly rural communities. i'm from texas. one of the reasons i fought so hard for community health clinics, particularly urn the bush ad mrg, when i actually talked to former president bush and one of our encounters to challenge and to encourage how we could in fact secure if you will, more funding for texas

for community health centers. in the rural areas. i'm glad we worked together. and actually, we've seen a ramp up and we have seen a ramp up with the affordable care act which helps to provide the kind of, if you will, health care for those in faraway communities where there are not enough doctors. finally, may i say to you that to cut the national science foundation is terrible. it doesn't make any sense. i would offer to say that this is about work. health care, copses to make it -- cops to make it safe, pell grants to train the 21st century work force. i know there are colleagues on the other side of the aisle who will work for us -- work with us to get the c.r. where it needs to be. we did it in years past, we balanced the budget in 1997, we can do it again. i frankly believe we should not cut into the very quality of life that is so needed.

let me thank my good friend and the condition gregsal black caucus for working with my other colleagues to ensure that we stand for job creation, investing in job creation. unfortunately, the c.r. as it stands today, continuing resolution for those who are not assured of what that is, is not going to work. let's invest in america. i yield back. ms. kris -- ms. kristen ensouth carolina spaung -- thank you -- mrs. christensensen: thank you, ms. jackson lee. i'm not sure you're aware, but there are jobs programs that will be cut at a time when they're so badly needed. i yield to hank johnson, who joined me the last time we had a special order. thanks for joining us again this evening. mr. johnson: i thank the gentlewoman from the virgin islands. i appreciate how much you care about people.

indeed, mr. speaker, the federal government touches all of us, every single person who lives in america. the federal budget touches each one of us. in some way or another. whether or not it would be when we call 911 for police help or whether or not we call 911 for the fire department, or even when we are sending our children to school, the teachers, they are touched by the federal budget. what we now have, which has been introduced on friday by

the folks on the other side of the aisle, my republican brothers and sisters, is an assault on each one of us. it's an extremist position that they have taken to cut things that are so important to americans' quality of life. i just simply don't believe that the majority of the american people are in favor of eliminating the positions of thousands of police officers across this land. of leaving fire departments high and dry with not enough personnel. and we certainly don't want our

schools to have hundreds of kids in one classroom because we don't pay for teachers. those positions are going to be hurt and severely impacted with these extremist budget cuts that are being recommended by the republicans. now, certainly they want to break the backs of the unions that represent these employees because they know that the federal government -- they know that the -- that these workers are protected by moneys that the federal government transfers to the states and local governments.

in fact, with the recovery bill that was passed out of this very body back in 2009, $800- something billion, it was the greatest transfer of federal dollars to the states in the history of this nation. and what it did, mr. speaker, was to save the jobs of police officers, firefighters, municipal workers, teachers, across this land. but we are now at the point where there is no understanding, no admission that that recovery package actually helped when in fact it did. lots of people would not be working right now if it had not been for that recanry package. what we want to do now is exactly the opposite.

we want to cut the budget, we want to cut aid and assistance to states and local governments to such a degree that it will force those governments to stop laying off workers in -- en masse. and it's not good for america. it's not good for americans. and certainly, there's a better way, especially when you think about, we can pay for it if we eliminate some of these tax breaks for the wealthy and people who don't need them. take the oil companies, for example. take the oil companies. can they afford to lose some of their multibillion dollar tax breaks in that great, big, unwieldy tax code in sure they

can. that's going to help us. but there's nothing like that coming from my friends on the other side of the aisle. they just simply want to plans this budget on the backs of the working people of this country. they want to turn this country into a pink slip nation. and they want to plans the budget on the backs of working people and i'm going to do everything i can to speak on behalf of the shrinking middle class and those are the people that i serve. and with that, i yield back to my good friend from the virgin islands. thank you, congresswoman. mrs. christensen: thank you, congressman johnson. thank you for your passion on maff on the middle class and the poor. as congressman scott said, throughout this recession, it's been the working people and the

poor who have borne the brunt of the recession an now they're being asked to give more while those who were wealthier and the corporations did very well and they're being asked nothing. so we do need to, you know, make sure that our voices are heard and that we do everything we can to make sure that the programs that are so important to this country and to the future of this country, if we're going to win the future are not lost, beginning with the c.r. now i'd like to yield three minutes to the gentleman from new jersey, mr. donald payne, also a former chair of the congressional black caucus, who has been a leader on education as well as in international affairs, but education, a senior member of the education and labor committee.

mr. payne: thank you very much, mr. speaker. let me begin by thanking the yealt from the vir-in islands, congresswoman donna christensen. our distinguished chair of the c.b.c. brain trust for anchoring this special order on the budget. her leadership and continued dill yens in addressing the issues that confront our nation in general but african-americans in particular is imperative to our nation. recently, the republican house introduced a continuing resolution containing the largest spending cuts in history. president obama unveiled his f. y-2005 budget to support the nation's growth while making difficult decisions to support our economic deficit. i urge my colleagues to consider as we consider these spending proposals that in addition to our spending deficit, we have a job deficit which continues to worsen in

part by an educational deficit. they work together. while we must work to rein in spend, we must not cut funding to extend the development and growth in areas of education and employment will be hampered if we do that. one of the challenges in addressing unemployment has been the rapid decline in certain occupations and industries that our -- and our labor market's inability to meet the demand of new ockpages and industries. more than 2/3 of workers in occupations and industries that are grow having at least some post-secondary education, compared to one third of workers in occupation and tri-that are declining. with post-secondary education and rapid increase in baby boom recruitment is predicted to result in a shortage of college graduates by 2020 in this cupry. military recruiters are likely to experience a shortage in

high school recruiting due to law school dropouts and low student proficiency levels. among high school graduates, one in five don't meet minimum standards to enlist in the army today. these facts highlight the real -- reality that our growing educational deficit is a greater long-term threat to our nation's well being than any channel we face today. the 2009 program for international student assessment, which inclauds south korea, finland, singapore, continues to fuel our dropouts in our high school and college level. nearly 7,000 student dropouts -- -- students drop out of school in our nation daily. the first year of american colleges students are required to take at least one remedial course. unfortunately, a disproportionate amount of these students are

underrepresented minorities, further threatening our progress against countries like singapore, finland, canada and others doing a better job in this. . the national septemberer for statistics report of 2009, only 33% of our nation's fourth graders are pro efficient readers. these low levels continue to fuel the dropout crisis on the high school and college level. nearly 7,000 students drop out of high school and this presents a real problem, further threatening our global standing is the higher education deficit in science and technology. in 2000, asian universities produced 1.2 million students. the united states produced 500,000. in an economy dependent upon

innovative work force in addition to addressing our nation's high school and college graduation rates, we must increase the level of science, technology, engineering and math stem field graduates. to do so, we must meet an innovative agenda to develop the potential of all students especially underrepresented minorities in the country for too long. as i conclude, i commend the president for his proposed investments in education to support early learning, improve school teachers and leaders, improve science and technology, engineering and math education and to promote college access and competition. however, i stongly oppose the nearly $5 billion reduction in areas of reduction, cuts to teachers and school leadership programs as well as head start, pell grants, 21st century

learning and efforts to strengthen our nation. i'm concerned about the proposed cuts to programs that stimulate programs that address health disparities and increase i diversity and cuts to the w.i.c. program, community health centers, low-income home energy assistance programs and neighborhood development programs. these cuts disproportionately impact on our most vulnerable impact. our economic crisis calls for difficult budgeting constraints. this should be a shared responsibility not an overhaul of the nation's economic crisis at the expense of the most vulnerable population in our global competition as well as a nation. thank you very much. and i yield back. mrs. christensen: thank you, congressman payne for joining us this evening and pointing out those very important issues that could be lost if this c.r. is

passed as proposed. i want to talk about a few issues. i'm -- on the first day of this congress, the leadership took away the vote of the committee of the whole from the district of columbia and the territories. apparently that wasn't enough. last week, they imposed their will on the people of our nation's capital and now in the continuing resolution, the assault continues because the office of consular affairs that support our territories moving towards self-sufficiency is slated to get a cut of almost $7 million. my district had a major flood disaster late last year, something that hasn't happened in distant memory. a member of our community drowned and many lost property and suffered damage to property.

the proposed c.r. would cut funding for flood emergencies. i'm sure that places like tennessee and new orleans and other places that have had floods recently or potential flood areas of our nation would not want to have the flood disaster funding cut. my district also has the highest concentration of greenhouse gases per square mile and we are fully dependent on diesel for our power. the cost of electricity in the virgin islands is crushing families and closing businesses and hurting our elderly. but in the republican proposed c.r., they are planning to cut almost every e.p.a. program that we need to protect the health and safety of communities like mine and every program that supports the development of renewable energy. after the bush administration

turned us into the deficit we are now trying to close, communities across this country experienced a continuing increase in violent crime because of the economic distress that they faced. and so what do my republican colleagues want to do? in the c.r., cut funding for police programs, for substance abuse and mental health administration and other programs, for juvenile delinquency prevention and community block grant and community programs. programs that our communities need to address the rising gun violence that this economic crisis is exacerbating. for years, the republican caucus has been trying to get their hands on the national endowment for the arts and national endowment for the how mants and smithsonian funding, these

important programs that are needed more than ever because there is so much pain and suffering across this country, they are also on the chopping block. w.i.c. has been cut twice last year and yet it's being cut -- it's proposed to be cut over $600 million and if that weren't enough, over $200 million is proposed to be cut from maternal and child health programs. where is the justice and love for our country's children. at this time, i would like to yield once again to the remaining time to the congresswoman from texas, congresswoman sheila jackson lee to speak on some of the other areas that the c.r. would cut and hurt our effort to win the future. ms. jackson lee: you don't know how difficult it is for many of us to accept the assignment or

the lack of assignment that this present majority leadership gave to the territories. and i want to thank you for placing this squarely on the record, frankly. we harked with the district of columbia and the -- we worked with the district of columbia and virgin islands, guam and puerto rico, because it was important to have the insight and constructive input on these legislative issues and more importantly on the floor of the house. let me re-emphasize in joining you to say that the territories should not suffer and in the c.r. they do. i want to hold up -- this is a letter to my colleagues, a letter to americans, a letter to the citizens of houston. this is the long list of cuts and let me cite to you very quickly so you understand what we are talking about.

we have to cut, but can we do it in a manner that is constructive? everybody is running from social security, medicare and medicaid and we frankly understand that. so they put the pressure on 16%. but you're cutting in the middle of the year when people are dependent on this funding. juvenile justice, $2.3 million. cops program, many cops will be laid off. nasa, $379 million. literally stopping nasa, in its tracks, forgetting about human exploration and science. the legal services corporation, no one without counsel can speak for a person who is desperate and cannot act as counsel. so if you have counsel, you cannot speak for someone who does not. legal services corporation is the wedge between justice and being thrown out. e.p.a., $1.6 billion.

women and infants and children, job training, i just mentioned. $2 billion and community health centers, $1.3 billion. high-peed rail, $1 billion and all of that is about jobs. as a member of the congressional black caucus and member of the larger body of members, republicans and democrats, this c.r. is going toe be the bite that is so stiff and so tough, and i hope some will view it not as a political prize, not as i did it, they told me to go here and do it. when you come inside this august body, you drop your partisan politics and ask the question, what is good for america? you're not a partisan democrat, a partisan republican or partisan tea party. can we come together. i don't agree with all these cuts. i know some of -- i didn't

mention g.s.a., i think we are cutting them too much, but we have common ground. how can you cut pell grants? students are in school and you are cutting them. let me say to the gentlelady, thank you. let's come together as americans and thank you for leading this hour on behalf of the congressional black caucus. mrs. christensen: thank you, mr. speaker. i assure you that the congressional black caucus will work with our colleagues to craft a budget that is fair and reduces the deficit as we have done every year. thank you, mr. speaker. the speaker pro tempore: under the speaker's announced policy of january 5, 2011, the chair recognizes the gentleman from missouri, mr. aiken, for 30 minutes. mr. akin: thank you, mr. speaker. it's a treat to be able to join my colleagues here this evening

and to consider this great discussion and debate that is taking place over the past months, but particularly during this week as we approach the question about what are we going to do with funding the remainder of this year. there was no budget decided on last year so they do a sthing called the continuing resolution. and there is a discussion about how much can we be afford ink to spend of the taxpayer dollar. and it might be appropriate this evening to take a look at that, not so much in a lot of detail, but at the magnitude of the overall question that's before us and how the math just doesn't work. i will also try as we have a chance to get into a discussion this evening to connect it to the problem of unemployment, because all of these things are connected. and still, i think it's helpful

to look from an overall perspective. so what i have here is one of those -- you always have these pie charts. i particularly like pie. and this particular pie chart here shows some different areas of the federal budget. now, this is the total of federal spending here. and the pieces of pie are roughlyly proportional. what i would like to start this evening, so we have a big picture of how serious the excessive spending in the federal government is is to start by making a distinction between a couple of types of spending. the first kind of spending and maybe to some people, it sounds like sort of washington, d.c. talk, but it's called -- they call it mandatory spending or entitlements. and mandatory spending, not necessarily mandatory, but what that means is, legislators as much as 50 years ago, passed a

series of laws and those laws, then, spit out dollar bills out of the treasury. any time somebody who happens to be the right person weaves their hand in front -- waives their hand in front of the machine, out comes a dollar bill. these are places where the federal government is spending money. and some of them that are familiar with most people. social security here, medicare and medicaid. those are the three big, as they call it entitlements or mandatory spending. and there is other -- there are other tifmentse that are smaller and that's in this category over here, the other, quote, mandatory spending, so these aren't medicare, medicaid, social security but the other mandatory and there is another thing that acts like mandatory spending and that is the

interest on our debt. when the treasury decides to sell a treasury bill, the reason people buy them is because the treasury will pay interest. we have to pay interest on our debt. in that sense, when we spend money that we don't have, we are creating a little machine that spits out dollar bills. let's say that you take all of this mandatory spending or entitlement spending and add it to the interest on the debt, how much does that add up to? well, it adds up to $2.3 trillion for this year. now what in the world is $2.3 trillion mean? most of us don't have a good sense of perspective. $2.3 trillion happens to be the revenue that the federal government collects this year. so, in other words, what we're saying is, if you take this purple and this aqua color and gold and light blue, you add

this all together, this is equal to the revenue that comes in for the federal government. well, what, then, does that leave out? well, it leaves out these other two pieces of pie, one is defense and one is nondefense. they are called discretionary because each year we decide how much money you are going to spend in those categories. . so in other words, what we're saying, it's a little chilling to say it, but the entitlement and debt service equll our revenue. to balance the budget, we have to get rid of all defense, not one soldier, not one plane, not one tank, not one ship, nothing, there would be nothing in defense and nothing in the nondefense discretionary no department of energy, no department of commerce, no department of education.

there would be no park services there would be no prisons. there would be -- homeland security. so there's all kinds of things that the federal government does that we fund every year which would be gone. so there would be no defense and no nondefense discretionary. well, the country wouldn't survive very well under those conditions. so that's the problem. these entitlements have grown so much that they've eaten up the whole budget, and so now this week, we'll be debating how we're going to cut this nondefense discretionary, cutting a little bit from defense, but mostly nondefense discretionary and we're talking about $100 billion. is that a lot of money? sure it's a lot of money. is it a lot of money, compared to the fact that we're about $1.3 trillion or $1.5 trillion over? not so much then when you compare $100 billion to $1.5 trillion. i'm joined tonight by a good

friend of mine from arizona, freshman congressman, paul gosar. let me get that pronunciation right. correct me, please. i yield to you, my friend. mr. gosar: thank you, my good friend from missouri, it's gosar. mr. akin: we had a chance to talk about this last week. i invite you to jump in, i hope people are starting to understand here that we have got a big financial problem down here. our entitlement and debt service is equal to how much revenue we take in, that's assuming you have zero for defense an zero for other nondiscretionary, there's no money to run the government with. that's a fairly significant problem. let's talk about it, my friend. mr. gosar: that's right, my good friend from missouri. when we're talking about making cuts, we can't legislate from c.r. what we have to do is just make

the plain cuts thatst why in the budgetary process, that's the second step in which we have to address the entitlements is looking at how we legislate directing, redirecting an making cuts. i think that's an important thing the american people need to share. mr. akin: so i think your point is, paul, that in our debate this week, first of all, almost all of the discussion is centered right over in this, looks like campbell's tomato soup here on my chart, in this section. mr. gosar: it is. mr. akin: and it's ignoring all of this, which is equal to the entire revenue of the federal government. so you can see that you could cut this to zero and you still aren't going to fix the problem. on the other hand, it doesn't mean we shouldn't be looking for savings and cutting everything we can but you're putting in perspective this whole week, i think that's tremendously helpful. i think, as i recall, there's about $16 billion being taken out of defense, which is not as deep a cut as what nondefense

discretionary is getting, is that correct? mr. gosar: that's correct. and the savings we're making here extrapolates over the next 10 years at a great discount to the american people in our budget and what we have to come up with in the in the future. that's what is so wonderful at least for the first five weeks of this congress, zero implications on raising debt. mr. akin: what we're doing, what you're seeing is a very serious attempt to get into reducing the size of the government. and i mean, we're stepping on all kinds of political toes, just saying, hey, it may be a nice program but we're in trouble. i was asked my a reporter, i believe it was earlier today, whether or not you know, the position that i was taking on these cuts and everything was like a tea party position. i said, you know, i guess we all reflect to a degree our training. i was trained as an engineer.

to me, this is just plain math. it isn't liberal math, isn't conservative math, it's just flat out, this is how much money the entitlements are taking and this is how much money is coming in. the two are equal and we don't have money for these things. i don't know if that's politically liberal or conservative or anything else. it's just the reality of the federal deficit. now the one thing we haven't added here, this is just this year, we haven't aed the perspective of time. i think it's helpful if we take a look at what time does to this in several regards. the first thing is, one thing that's happening to those pieces of the pie is, it's growing. this has medicare, medicaid, social security, it shows what's going on without the other entitlements, without the debt service. you see that those of us, i hate to admit my age, but some of us baby boomers, as we get older, we'll be leaning on

medicare, social security, medicaid more, there are more people there so that makes the numbers go up. what we've seen is the revenue the federal government collects seems to hover in here at 18%. there's times, historically when we raised the tax rate tremendously and yet it seems like it's still 18% of g.d.p. if this 18% is not that flexible, whether you raise or lower taxes, then when you get down to this problem, you say, uh-oh, because before you could say our revenue was equal to all these entitlements. well, raise taxes, no problem. there is a problem. you raise it, you won't collect any more money, you crash the economy and the entitlements are still growing. over time the entitlements are growing. this picture here, as scary as it is, is not as scary as it really is because it doesn't take into effect that these entitlement pieces are growing rapidly.

here's the other piece from a time point of view. that is, this red line is the growth of entitlements. this is 1965 and we're going over here to 2010. you notice the entitlements are 2.5% in 1965. this is just medicare, medicaid, social security. gets up to 9.9%. but really it's actually when you add the other entitlements and debt service, you're closer to 18%. what's happened is the entitlements are going out of control, even if you assume the other entitlements, roughly 12% or something, you're at 500% growth in entitlements yet here's defense spending. it's 7.4% here. up as high as over 9% here. drops all way down to 4.9% system of defense spending is going down, entitlement is going up and now we get to the point where you can cut defense to zero and cannot compensate with this incredible growth of

entitlements. i want to let you jump in, paul, because i think the people now can start to see what it is and why it is, there's a whole lot of americans, not just republicans or democrats, but plain old americans, are saying, hey, we've got to pay attention to what's going on because these numbers are very scary. please join us. mr. gosar: everybody knows how when you put bank into an -- money into a bank and compounding interest, you go to a bigger fund. this is reverse compounding interest. more and more people on the rolls with fewer and fewer helping support it. the last part is, we have an economy that is way behind. we're still over 9% for how many months now? in order to create a better economy, that's what's going to help us service these programs and get people involved. it's an intricate equation we have to work by. mr. akin: what you're saying

is, one of the things that's affecting this, that is just the condition of the economy. i was planning on getting into this with you because when we started, i wanted to talk and work in the problem of unemployment. and how do we deal with the level of unemployment in our economy today we've got the government saying it's .-- nine-point something percent unemployment. that's an optimistic number because if you're unemployeed for more than a rear, they drop your name off the list. you may still be looking for a job. the real level of unemployment is well beyond 10%. one of the ways you can, i guess this may be a backwards way of looking at it, what are the things creating that unemployment? i went to, believe it or not, to a main street in my district. i got a whole bunch of businesses here and i said what is it that's causing this unemployment? i asked all these different people. i was encouraged because they

told me the very same things that my common sense told me an everybody else was saying. anybody who has run a business knows what makes the unemployment. the fist thing is, they have, when you start taxing the owners of small businesses heavily, they can't put money back into their businesses because they're busy paying taxes. i believe, gentlemen, is it true you were a doctor? did you have a clinic of your own? mr. gosar: yes, i did. mr. akin: if you get taxed a lot, are you going to put money into new equipment and expanding the clinic or does it go to paying taxs? mr. gosar: it's not and you're not going to hire somebody when you don't know the rules. we have beset the american people with a set of rules that they don't understand. mr. akin: the first point is, if you want to kill jobs take the money away from the owners of small businesses. you can say, that guy is making over $250,000, obviously having too much money. we're going to tax him into the

dirt and make sure he doesn't have a better time than we do the only trouble is, if you want jobs, you can't destroy businesses. that's the connection that it seems like this administration, the democrats keep missing. if you keep talk about pounding rich people and those bad corporations if you pound them into the dirt, there won't be any jobs. that's where we seem to have this disconnect going on. so first thing is, you do not want to tax those people a whole lot, you want them putting money back into their business. the sec point your making is, all these regulations and red tape. it may not be a tax, but it has the same effect, doesn't it mr. gosar: it does. mr. akin: did you have to fill out a lot of paperwork in your business? mr. gosar: in the medical business we have tons of it. from hipaa, to disclosures, the paperwork is endless. mr. akin: do you have to hire people to fill out paperwork. mr. gosar: we have people that just do insurance filings, just

do our mappeder to paperwork with the federal government. mr. akin: so in a way it's creating a job for people to deal with government red tape but it doesn't create any wealth, does it mr. gosar: no and there's not a service to be provided. it's servicing the public interest within the federal government. mr. akin: in effect, what it's going to the i -- doing to the economy is the government is making you less efficient as a business and that red tape adds to your cost of doing business which teppeds to dry up jobs. mr. gosar: that's exactly right. mr. akin: particularly in manufacturing if you do it in manufacturing, it makes it so expensive to make something in the country, the guy owns a business, he says, i'll take this machine that makes good product, i'll send it to a foreign country where they don't have the red tape and taxes and i'll make the product over there. and so the jobs just disappear from us. bauds of taxes and red tape. now there's another one that

the people on main street in st. charles talked about too. and that is a little bit less tangible. it's the sense of unknown. it's the sense of fear because the government is doing one dumb thing after the next and they're afraid to make a decision because of the instability. the economy is down, it's hard to get loans. and they're not sure what we're going to do, for instance, the big health care bill was pending so what are you going to do? well, because you don't know the environment you tend not to make a decision, don't take risks because it's a very tumultuous type of time and there's too much of a storm brew, you don't want to be out too far from shore when there's a storm pruing. people hunker down and don't hire people. that's another thing. we're doing all those things wrong. even now we're doing those things wrong. we wonder, why do we have unemployment? and of course the big one is government spending.

boy, are we doing that. you've got entitlements that are out of control, who is going to pay the tab? so you put all of these things together and you have almost a perfect storm on business and people wonder, gosh, why do we have over 10% unemployment? it's because we're doing all the things to create unemployment. please jump in, paul. mr. gosar: the federal government also made winners and losers. we don't know in small town u.s.a. if we're one of the winners or losers. mr. akin: oh, the bailout drill. we'll bail this one out but not that one. mr. gosar: and something went wrong. when it's bureaucrats asleep at the wheel, we pass more regulations so the small banks in our communities can't lend. they're the ones who get audited five times in less than a year. what about the same application to the big banks? where is that equal aspect of the law? mr. akin: paul, i don't believe it.

it's like i'm stepping back in time to that main street in st. charles because you're bringing up that fifth point that they always talked about. . you have bernanke at the federal level, he is doing science fiction economics and creating all this money. created a whole lot of money at the top and the funnel got pinched off and the money's not coming down to main street and part of the reason it's not, all of these regulators are all over the banks second-guessing the loan. if the businessman isn't as fearful as he is and wants a loan, he finds that the banker is tough. they are typically five and seven-year loan, is that right, gentleman? mr. gosar: yes. mr. akin: basically, the banking

regulators are looking over the shoulders of the small banks? mr. gosar: in our own district, we have a small bank that has 39% in liquidity versus loans out. mr. akin: 39% liquidity. isn't that high? mr. gosar: that is very high, which would be normally, 8% to 10%. they had three audits in the fiscal year of 2010 and two more scheduled in the first quarter. tell me how that works and especially when we have one bureaucrat disagreeing with another. that's the disruption and fleesing of america. mr. akin: well, now, the question is, if the banker is a businessman and taking risks and wants a loan and as long as the loan is good, he makes money.

if he wants to do that, why do we have a bureaucrat looking over his shoulder, particularly as long as he has a sufficient amount of liquidity to cover potential losses, why is it that the regulators are regulating every aspect of our free enterprise? mr. gosar: that's the problem with our economy at this point in time. we had a government that disrupted the understanding of the way the risk was looked at and we said, no, we don't know the following thing, particularly in the housing industry. we actually saw bureaucrats saying no. we don't need this application of risk and what we got is no skin in the game and we had a fail freddie mac and fannie mae. mr. akin: you get into this whole thing and look at what we talked about tonight, you start tearing your hair out and

wanting to go buy property on a desert island, but there are solutions to this but you have to rills where the solutions are. you have to realize that we aren't going to deal with the economic problems of our country until we can reduce the rate and number of entitlements we've got. somebody could object and say wait a minute, congressman akin, couldn't you deal with these entitlements if you got your taxes up higher? if you could get these taxes that are running 18%. if we could double it, 40% tax rate, this would take care of it for a while and tax everybody at 40%. the problem is, it doesn't work and that's something we ought to warn people about here. there's something here, this is sometimes now known as the laffer curve and the top

margsinal tax rate. that doesn't mean in 1960, everybody was paying 90% taxes. this is what happened to the top tax bracket. we started to reduce the taxes on some of the very top income people, bringing them down more into the 30% range and look at what happens to the federal tax receipts. and this is an example of the fact that you could actually reduce taxes and grow the revenue of the federal government and the reason that works is just what you were talking about, paul. because you are a businessman and you understand this stuff and what's happening is when a small businessman can create jobs and people paying taxes and more revenue for the government. when we get the economy going, we take in much more revenue. by reducing taxes, you can create more revenue, get the

economy going and that will help some, but not enough to deal with this entitlement problem. so really have a couple of tracks. you have to take on one, cut the entitlements down, but also, likewise, have got to keep working this advantage of getting your taxes in line to create a strong economy. here's an example, and when i was here in congress, this is the 2003, third quarter of 2003. and we cut three taxes, capital gains, dividends and death taxes. we cut all three. this is the picture, the black line is when the tax was cut. and this is the g.d.p. by quarter -- by half, any way. these are the g.d.p.'s from 2001 to 2003. and you could see -- some of them we lost g.d.p. we got up to 2 sp 3/4 here and

here we do the tax cut and look what happens afterwards, the average g.d.p. is 3.5. so it jumped. so we cut taxes and you think well, that's good, because g.d.p. is going and the companies are going and the pump is primed. we have this next chart. this is employment. this is before that same tax cut, may of 2003. you see all these lines going down, means loss of jobs. means we lost jobs in the economy. the lines that went up were the quarters or months where we gained. take a look after the tax cut and look at what happens. you get a whole lot more jobs. if you have better g.d.p. and more jobs being created, you know what the final chart is going to show and that is quite

simply that by cutting taxes, we actually grew the federal revenues and that's a good thing to be able to grow. down here, $1.7 trillion and it jumped just by cutting taxes. we have been joined by a distinguished colleague -- are you going to join us -- oh, come on. what we did was, we cut taxes and ended up with increase in revenue. there are two pieces of the equation, one, we have to adjust tax policy and create an environment in terms of red tape, in terms of federal spending, in terms of tax policy and in terms of allowing liquidity to be flowing through the banks and create something that is pro-business. why would we be in the mess we are in now and have the highest corporate tax rate in the world. i just can't understand that. paul, what's your take?

why would we do that? mr. gosar: i understand that. but something you have to learn in business. you have to the ability to re-invest in america. if i have money sitting there, make it worth my while to invest in america. it helps us in giving us access to cash, which has been ladened with the banks and strapped with the new regulations that come about. you have to look at the certainty of the environment. we aren't going to take the load on our backs if we know there is uncertainty in the environment, health care, taxes, all the regulations. all these things add up and if you don't get people hired, they are a drain on the system. in -- and america wants to get back to work. mr. akin: you're right. i think in a way the cuts we are going to be talking about today, i mean this week, while they aren't going to fix the overall problem of the fact that

entitlements are out of control, i think there are some things that they will do. and i think what they'll do is maybe deal with some of that red tape, because if you cut some of these agencies that are producing all that load of bureaucracy and red tape and all kinds of extra overhead as you start to reduce that, it's taking weight off a runner. the economy will run better and some of those cuts are probably draconian in many people's eyes and maybe counterproductive but you know you have to triple up. and that's what we are going to talk about doing. we have to cut the federal spending, but also going to have to create an overall policy in terms of policies, that is red tape, limit the amount of red tape and the tax cuts to basically create a pro-business environment.

the revenue is going to grow, size of government is going to shrink and see the shift come back to normal and america will start moving forward again. mr. gosar: we have to work with our children, which you can make the analogy of federal government versus state government, empowering and giving the environment to succeed. what we always want to try to do is make sure that we put an employee in the best environment with the right tools, with the right education and then they can succeed. and when they succeed, they make me a better business owner and much better at what i do. and that's what we have done here. we have had unfunded mandates from education, health care, all the way across. we have to start working with the states and the individual expertises and what makes them special and allow them the flexibility to succeed as well but we have to put them in the right environment from the state to the communities. this is a group effort and

family affair. mr. akin: that's a great way to end things. thampingse for joining us. the people of arizona are particularrled to see their new congressman is earning his keep down here and good night to you and good night to my colleagues and people across america. we are looking forward to a brighter day but we have tough decisions to make and we are getting ready to make those this week. god bless you all. the speaker pro tempore: under the speaker's announced policy of january 5, 2011, the chair recognizes the gentleman from oregon, mr. blumenauer, for 30 minutes. mr. blumenauer: i ask unanimous consent that all members may have five legislative days to revise and extend their remarks and include ex train remarks on the subject -- extraneous remarks on the subject of my special order. this is one of the most pivotal weeks in the history of american

public broadcasting. as early as tomorrow, we will be voting on a continuing resolution that will call for the elimination of all federal government support for public broadcasting. now, i'll admit, this is very personal to me. if this reckless act were to be taken, it would mean that my local award-winning public broadcasting station, oregon public broadcasting would lose $2.4 million annually. funds that we are used to invest serving oregon and southwest washington and a little bit of idaho, with programs that keep people informed, inspired, help educate our youngest citizens, actually through the magic of internet, people enjoy programming online across america because of the quality of oregon public broadcasting. now, there's no question, as

some of my colleagues were just discussing on the floor that there's hard budget work ahead of us. i look forward to opportunities to eliminate unnecessary agricultural supports and rebalance those efforts. i look forward to dealing with helping rein in spiraling medical care costs, not eliminating health care reform but accelerating it to make it more efficient. i look forward to the largest area of expenditure dealing with the defense department in discretionary funding. i'm, without question, there are a number of areas there, the american people know and understand, that can be adjusted. however, we must do this in a way that is thoughtful and does not disproportionately impact our rural communities, our

children and universal access to high quality tv and radio programming. funding for public broadcasting gives our communities -- excuse me -- just getting choked up at the prospect of this -- that losing that funding that gives our communities a voice by covering local news and events in a way that weekly papers cannot and commercial radio and tv stations do not provide. today's media is rarely locally owned. huge corporations send managers to deal with papers and radio programs. public broadcasting is the only locally-owned and managed media in america.

. i am joined this evening by a couple of my colleagues, and i look forward to engaging in this conversation with them. i note if i could start with my colleague from kentucky, congressman chandler, champion of public broadcasting, as well as a very fiscally conservative member of congress, welcome this evening and look forward to your thoughts and observations. mr. chandler: it's good to be here with you tonight. it's a tremendous opportunity to talk about something that's also very important to me, but i want to just start by saying to my colleague from oregon, mr. blumenauer, how appreciative i am and i think how appreciative so many people are across this country of your championing of public broadcasting over the years. you've been an incredible champion of that effort, and i just think it's marvelous

because of what public broadcasting means to all of us. as you mentioned earlier, we heard some of our republican colleagues talking earlier about some of the budget efforts that were going to be made, and i must say we do need to have that discussion here in washington. there's no question about it. it's a discussion our president is now engaging in and the congress is going to be engaging in in the next little bit about what programs we can cut. there's no question that there are some that need to be cut. we certainly need to get our fiscal house in order. in this country. but zeroing out funding for one of the most successful public -private partnerships responsible for 21,000 good american jobs isn't the thing to do. in these tough economic times, more than ever, we need to support american jobs and invest in our people and cutting funding for public

broadcasting does neither. until now, public broadcasting has enjoyed strong bipartisan support. in fact, in my home state of kentucky -- and by the way, i heard the gentleman from oregon talk very much about his -- the success that his public broadcasting system has had. i must say, ours in kentucky has done rather well, also. and i would -- it's something we're very, very proud of. but in my home state of kentucky, a republican governor actually provided kentucky educational television, or k.e.t., with its first operating budget in 1968, helping ket hit the air waves and is now being ably run by the daughter of one of my republican predecessors in this office, shea hopkins. this station has touched countless people throughout the years, and today it is used by

more than one million kentuckians each week in a state of only around four million. so that's a pretty significant number. and you can see how important it is to our state, but completely cutting all public broadcasting funding will make ket cut at least p 1 -- 31 full-time jobs and 20 part-time jobs. these cuts would be on top of the 24% work force reduction that ket has already endured in the past three years. ket said that this loss of staff could hinder their ability dramatically to serve our commonwealth. and our public radio, just like public radio all across the country certainly will be affected. how many people across our great nation wake up to npr and morning edition and drive home to all things considered? it's a very important part of

life in my home state. we have stations like weku in richmond, kentucky and weky in lexington which touch all parts of kentucky including rural parts of our commonwealth. weku radio out of richmond has been serving kentucky since the 1930's, and they've already gone down 30% recently, and this of course would force more layoffs. public broadcasting is uniquely american and should stay that way for future generations. my three children grew up watching "sesame street" just like i did when i was a kid, and countless others received basic skills in workplace education, and some even receive help with college credit courses through ket. weku, wuky provide local programming and local news that can't be found elsewhere. so please, please join me today

in support of public broadcasting. these stations are too important and we just simply cannot let them go away. mr. blumenaur: thank you. i appreciate your eloquence, congressman chandler, your long-standing support for public broadcasting, helping us have a constructive dialogue here in congress to make it better. mr. chandler: another thing it does of course, if i may, it increases the civility of our discourse when a time when so many stations are sensationalizing the news. there's one place we can be sure we can get a civil dialogue and both sides of the story and that's public broadcasting. so thank you so much for all you do. mr. blumenauer: before i turn to my good friend, congressman farr, i want to follow up on one element that you made because this is vital infrastructure that connects americans, particularly in rural and small town america.

people who otherwise would not have access -- there's always going to be public broadcasting in new york or washington, d.c., san francisco, but it's rural and small-town america that is going to pay the price if we lose the support for this infrastructure. again, being very parochial but it's not uncommon for what happens in the midwest, in kansas, in texas, in rural oregon. it costs 11 times what it -- to extend -- send a signal to remote burns, eastern, oregon, than to deal in the metropolitan area. so these 1,300 independently owned public broadcasting stations are going to be severely crippled in terms of their ability to meet the needs of rural and small town america. i'm going to speak in a few moments about some of the unique programming, but the point is that the signal itself

depends on the type of subsidy we're talking about here. now, if i may turn to my colleague who has been a supporter of public broadcasting back in the day when he was a local official in dealing in the california legislature, congressman sam farr. mr. farr: thank you for inviting me. this is a important discussion and wish we could do it in open debate where we could have a debate on this because i don't think there's a person in this country who realizes how necessary it is to keep our electorate informed so i join the chorus of well-informed listeners tonight to support america's corporation for public broadcasting. i find it ironic the news got released today, the day when you think of a national day of communication, a day when we tell our loved ones how much we appreciate them through words and symbols. and what -- here we are

attacking the very essence of america's foundation for information that is not commercial information, that is not paid for to get it and have to make a -- have ratings in order to get people to purchase the commercials. it's a sad day that valentine's day is used today to destroy something we love so much. it's mean news to hear some of my republican colleagues who want to cut almost half a billion dollars out of the corporation for public broadcasting on a time when the world has been dedicated to watching what's going on in the middle east and egypt, which is essentially the essence of communication, the essence of technology, but also the freedom of technology. and in america we don't own, like bbc and canadian

broadcasting where the government owns the stations, we allow nonprofit entities to do the broadcasting, both on television, as you indicated, mr. chandler, and all of our -- i don't think you can raise children in this country without appreciating the value of what is learned, the lessons learned by programs such as "sesame street" and others. but to think that you can just cut this out as a value to a greater debate of balancing the federal budget by eliminating this is nuts. this is what i always call the persons who know the price of everything, but the absolute value of nothing. because cutting this is -- you can come up with a price tag, but the value you lose to the american public. i wake up, here we are in congress, and we're obviously -- we need all the news we can

get. i don't know a member of congress who doesn't wake up listening to npr radio. of all the choices we have, from both sides of the aisle to get unbiased news in the morning before we come to work. and i know it because when you're on it, people comment on it the minute you get here. they hear you on npr, i heard you this morning when i was getting ready to come to work. this is not just done by members of congress, this is done by everybody in the united states. and what congressman blumenauer talked about is rural parts of america would never have this program. you never have access to this information. if you want to destroy rural america, then destroy their access to information. because then the only thing the young population will do is have to move out in order to keep up. so we have to make sure that these nonsensical cuts which have dramatic and negative impacts are not made to this

budget. let's sustain the budget to keep americans well-informed and ensure that future generations of the richness of public broadcasting. let us give back our hearts and minds to the american public by maintaining pbs. mr. blumenauer: thank you, congressman, for your eloquent statement, your support, and your being with us here this evening is very important. and i think your point about how we start the day, how many of us were relying on public broadcasting for up-to-the- minute results of what was going on in egypt at a time when the large corporate news organizations are cutting back their foreign coverage, because of the dedication of hundreds of thousands of sponsors, voluntary contributors, public broadcasting has expanded its

international coverage, extraordinarily so. but before i turn to my good friend from new york, i would just make one reference, however, although the international is certainly critical, it's very important for us here in congress, one of the things i think is so essential to zero in on is the local programming for rural and small town america. lakeland public broadcasting in minnesota, the only broadcaster, the only broadcaster for much of their service territory. in colorado, kbnf is increasingly the point source of news and public affairs programming emergency preparedness alert. as the print media continues to shrink and corporations kind of move in and automate small radio markets. i could go on through the list. i won't because i do want to provide time. but i want -- there is special

coverage in the upper midwest, in the northwest, in the mountain states that is tailored to hard-to-serve areas that no commercial station is willing to invest in this type of quality. and to turn our backs on it is one of the most reckless things that can be done. and frankly, it's a terrible optic for my republican friends in their first weeks in power, turn their backs on 170 million americans who enjoy and rely on it every month. in fact, if you look at the survey research about what people want to protect, they want to protect our strength in defense. number two is public broadcasting. and yet this is on the chopping block. with that, i turn to my good friend from upstate new york, mr. owens. mr. owens: thank you very much.

i appreciate your leadership on this. when you talk about rural, i represent rural. 14,000 square miles makes up my district, 1,000 miles around the perimeter. i live in a very rural place, and public broadcasting is extraordinarily important to each and every one of my constituents. i have to do a bit of a disclaimer first. my wife works for our local television station. she's the education director. i volunteered at the station for 3 1/2 years, and i was the host of a television program, and i was also the lawyer for that station for about 25 years. . i'm most disturbed because i see what's going on in this situation as really a slash and burn tactic that is primarily focused on public broadcasting. it is an attempt to take the continuing resolution and make

it into a piece of ideology. that's not what our constituents are asking of us. they want us to make an economic decision and do an economic analysis of where we are and where we're going. i think it's extraordinarily important that we focus on the economics of the debt and deficit and not on ideology. we have an opportunity to act rationale and in a bipartisan fashion. as we did in the last lame duck session of congress, our friends and neighbors at home demand no less. i can agree to cut $100 billion, which is actually about 3% of this year's budget. if we do it by sharing the pain. let me tell you a little bit about public broadcasting. my children grew up with it. it is part of the education that

my family experienced. my grandchildren are growing up with it. this is the best in family values and quality programming that you're going to see. if our colleagues on the other side of the aisle are concerned about the development of morals, integrity and education, then public education is a place they should support, not kill. just a few thoughts. my public television station provides essential services to that upstate rural community i talked about. it's a line with their mission to inform, educate, involve and entertain. public broadcasting is america's largest classroom. closing the achievement gap through innovative standards-based educational resources for parents, teachers

and students. public broadcasting serves as a trusted partner and agent of better citizenship in the world's greatest democracy. public broadcasting is not a luxury we can't afford, but an essential service regularly depended upon and enjoyed by 170 million americans in all 50 states. let me repeat that, 170 million americans support public broadcasting. cutting or eliminating federal funding for public broadcasting will have a severe, negative impact on local services and economies in all 50 states. let me point out that public broadcasting directly supports 21,000 jobs and almost all of them are in local, public radio stations in hundreds of communities in america. science-focused programming at all age levels supports the

acquisition of 21st century problem-solving skills. i could go on. it's clear that public broadcasting brings a dimension to education that we see in no other modality available to us. i agree that reducing spending is a priority, but it must be achieved without resorting to idealogically-based slash and burn fack particulars that will facilitate -- that will not allow us to facilitate a compromise with the senate and white house that brings will rededuction in spending based upon the shared pain which we understand is all needed. mr. blumenauer: thank. as only a dedicated volunteer of public broadcasting could come forward with that eloquence and the personal story. i deeply appreciate it.

couple of facts that ought to be on the table. we are talking about less than one half cent per day for america. we are dealing with organizations that have amazing volunteer support in each and every one of our communities and they take half a cent a day and leverage it. it can help local programming. and you said something that i thought was very important when you talked about the programming. each of you mentioned it. this is the only medium that is geared to programming to our children, not to sell them something, but to educate and enrich. it's the only area that they have access to. mr. farr: if the gentleman would

yield. i think what is also very important, this is a government program where there is no free lunch. it requires a local match. a contribution by the community and volunteers and not a paid programming without raising money in the local media as you know in your own station and had to do every year in the volunteer drive. when you think about it, you don't go out and match public volunteerism to buy military equipment. you don't match voluntary equipment to do any other thing in american society. this is one budget that really depends on the popularity, on the popularity of the programming in order to get volunteer support, volunteer contributions and volunteer help in the supports. why would you cut out something that the private sector and personal commitment thinks is so important?

mr. chandler: boy, does our community volunteer. in all of our communities, we see an enormous amount of volunteering and i appreciate what you just said, mr. farr, mr. owens from new york, thank you for your strong support over the years for this and to point out the importance of education. i mean, this is, as we have said, the only public entity that educates us on television and radio on a regular basis. and that is an incredibly important thing. but you know the other thing that is so important about it, it truly broadens our horizons. it doesn't narrow us like we see on the television, but broadens our way of thinking. and what other place can you get that on a regular basis in our culture? this is a special american

institution. mr. farr: it defines our civilization. when you think of programs, keeping records for america, absolutely essential that our culture and our times and our moment in history and in the world be maintained in the public sector, whether it is private ownership of it. mr. chandler: always had such bipartisan support. mr. blumenauer: this is the first time there is a partisan effort, apparently. and we had efforts before when our republican friends took over, there were assaults on public broadcasting, but there was strong, bipartisan support. and at home, the 170 million americans, they aren't just democrats, republicans or independents, it is a broad spectrum of americans who rely on information that isn't

prefill tered for them. there are opposing views. we heard things on public broadcasting that, i don't agree with that or wouldn't have listened to in other venues. i don't want us to close without hearing from our public broadcasting member. mr. owens: in our conversations i have had in the last couple of days, public broadcasting has to share the pain with everyone else. one thing to cut someone's budget 3% or 4%, but it's another thing to eliminate their budget. people survive and prosper when they have to make up 3% and 4%. and i'm urging my colleagues on the other side of the aisle to think about. mr. blumenauer: thank you. any other words? mr. farr: thank you for your leadership. mr. blumenauer: we look forward

to continuing this conversation on the floor of the house. there has been an exciting outpouring of support throughout the country where people have been invited to look at the facts and share their opinions and i know this is making a difference because every member of congress is hearing from the men and women they represent about the value of public broadcasting and what they are hearing is anything like what is coming into my office, it is overwhelmingly in support of this vital program and urging us to do the right thing. i deeply appreciate my colleagues joining with me this evening and look forward to continue to spotlight this and to work to make sure rather than eliminating public broadcasting, we work to strengthen it so everyone in america can benefit. thank you very much. i yield back. the speaker pro tempore: the gentleman yields back the balance of his time.

under the speaker's announced policy of january 5, 2011, the chair recognizes the gentleman from new mexico, mr. pearce, for 30 minutes. mr. pearce: i thank the speaker and welcome to all of you to the discussion tonight. as everyone is talking about right now, we are preparing to have a discussion this week on the budget and where we go from here. the continuing resolution is last year's spending, was not passed for the full year. so we're now in the process of considering how to fund the government and at what levels through the rest of the year. so we appreciate the opportunity to consider why we're doing what we're doing. you have to ask yourself exactly what is the basis of all of the discussions we are having on the floor of the house. and i would like to make things as simple as possible to understand. so i began the discussion by simply writing the big picture

on the white board to my left and the big picture is simply 3.5 and 2.2. 3.5 t is the amount we spend every year. 2.2 is the revenue that the government brings in. now, if you were to go ahead and then do the math on that, you would see that we are -- have an outflow of 1.3 greater than the inflow. actually, those numbers have been revised and i'm not sure if the inflow has dropped down or we're spending more, but the revised figures show us that we have a deficit of 1.5 t, $1.5 trillion in this current year. we put that number up on the

board in order to continue to just get the big picture and where we are. now this 1.5 t, $1.5 trillion deficit that we have is, i consider it like it's in a pipeline. it's deficit this year, but it's at the point at which we spend the money and have not taken in money to offset it. then it becomes debt. and so i look at it like a pipeline and so we make a graphic here. so we have the deficit pipeline full of $1.5 trillion each year, because we're spending more than we bring in. now, the barrel at the end of the pipeline, i just call it the

debt barrel, and it's, again, fairly transparent as the deficit rose into that barrel, it becomes debt, which is accumulated and passed onto the next generation. so rounding the figures off, we see a debt right now of about $ 15 trillion and put that label on our barrel. and so, basically, you have the picture of the budget right here in front of you. we are spending 3.5 trillion. we are bringing in approximately $2.2 trillion. one of those numbers is a little bit incorrect, so you say $1.3 trillion deficit, but instead, that has been revised, and that deficit is then flowing into the debt barrel of $15 trillion. so at the end of the the next year if we continue to spend and the proposals in front of us now

are still running a deficit of at least $1.5, you can calculate that we will have a debt accumulated of $16.5 trillion. everyone likes to make this complex but it's not that complex but similar to the problems that you or i had growing up. we began to use more to spend more than what we brought in. now, if that's the case, then we go about it by doing one of two things. we either shrink the size of outflows. we cut the spending, or we get a second job or we get or we get training in order to get a promotion and then we drive up our revenues. . the discussion we have this week, the continuing resolution, what do we do with

the outflows? it requires more people go to work. so the problem of 2.2 is being accentuated by the 9.5% unemployment. the citizens are concerned, they're alarmed the jobs are just not happening, but it's not only in their lives it's a significant problem, it's in the lives of our government. each one of our states is also, with one or two cheppingses, going through the exact -- two exceptions going through this exact same problem, they're spending more than what they're prescribe i br i go in in revenues. the government has three choices to make. they can cut spending. they can increase taxes. or they can grow the economy. and growing the economy is when you add more jobs, each person in their job will pay taxes and that incrementally increases the number on the bottom so we

eventually get them to balance. but then the government can also do one more thing, and that is to print money. and that's the quantitative easing that mr. bernanke has triggered off. so the printing of money then has its own downside. we won't talk much about that tonight, although it is probably the most significant thing in our business climate that we face, an unstable dollar, that is one where we're spending more dollars, the value begins to erode , and people in their homes tonight would be watching the price of vegetables go up, the price of gold has gone up, the price of silver. those don't have any more intrinsic value. in other words, a vegetable a year ago in our life would be consumed and have about the same value the price of gold hasn't gotten any new manufacturing techniques that would be pulling great supplies off the market, driving the price up through supply and demand. the same thing with silver.

and in fact, those prices are escalating dramatically right now because we have so many dollars, because we're printing money. and, by the way, we printed last year about $2.6 trillion, more or less. so we have quaint tatively eased. we -- we have quantitatively a'sed. we are seeing prices go up in our society. this is in contrast, the inflation is in contax to what the government reports say because the federal reserve says they see no signs of inflation. it's just that they don't consider the food and the energy that we would have facing us. so, again, turning to our main board here, then we have -- we have a significant chart that is available from both c.b.o., that's congressional, and from the o.m.b., that's white house.

so we have a significant chart, and the chart basically looks like this. and the chart simply comes up and then stops. now, this year would be the -- this exax us would be the years so -- this axis would be the years and then future years extending out ahead of us. on this level we have the dollars and this represents our gross income, our per capita income. as you can see, throughout our history the income has been rising, rising, so that you make more, you have made more in your lives than your parents made, and your parents made more than their parents all the way back to our founding. but you see in this point which is occurring about this period of time is that the curve begins to flatten out and start down. so when i ask in our town halls, and we frequently ask the question, are you living

better than your parents did? and almost unanimous, the answer is yes. but when i ask the second question, are your children going to have better lives, better incomes than you have had, and almost 100% of the people say no. well, that's actually playing out in the chart right at this peak point here, and we're experiencing that as we speak. now, then, the unsettling piece of this charlotte is -- this chart is it's discontinuous. it stops. the thing about charts is it continues throughout history. we start the founding fathers here and come up and come up and topping out and then the chart stops. that is 2032 maybe, 2034, something out in that range. and the economy simply stops. the economy stops because of this. and because of that. you can see with our $15 trillion worth of debt we can take every dollar coming into the u.s. government right now and it would take us six, seven years to pay it off.

that's if we did not spend any money and did not have any more deficit. as you can see from this year and next year, we're going to have significant deficits, and so we cannot in fact pay that off in 7-10 years. in fact, it is ongoing. the last thing that we need to get to have the big picture in front of us is that i view that barrel of debt and then i view it is sitting on top of an aqua first -- aqua fer -- aquafer of debt underneath it. i'll simply draw that on the board at this point. now, we have the auction by first -- aquifer of debt and people are saying it's $202 trillion. we could pay for almost 100 years and not pay the accumulated obligations for medicare, medicaid and social security.

and it's that piece which begins to make our economy falter and fail within the coming generation. we saw this happen in the soviet union, and so as we consider, could it happen here, well, yes, it could happen anywhere. and the u.s. is no exception to anything. the rules of economics say that everything that you spend you have to pay for, and if you don't pay for it, there is loss at some point, and we have been living in the government an economic lie. we have been fooling ourselves saying we can continue this process and now we have reached the point it will be catastrophic within the lives of many of the people who are here in the u.s. today. so what do we do? do we cut the 3.5 or do we grow the 2.2? now, this week we're going to have many, many amendments. and in looking at it from this

lens, i heard my friends discussing public broadcasting, and i agree with them, many things about public broadcasting i like and the programming. but the question is, should it be a government function, and should we be spending money for it when it's going to put your children and grandchildren into deeper debt? should we be risking the failure of our economy? and again, this is not steve pearce, this is c.b.o. and o.m.b. you can go to either website and take a look and find the chart of per capita incomes and just look at it. it's there. and so if we are risking that, look at it through that lens, then we ask ourselves, should the corporation for public broadcasting be funded? and that answer will be given sometime this week on the floor because there will be an amendment, there will be something in the bill that says we will do just that. these are the hard choices that

we need to make now. let's consider one other thing. the president today submitted his budget to us and he recommended that we have $1 trillion over 10 years, maybe $1.1 trillion. how does $1 trillion -- it sounds like a big budget cut. oh, we're really going to cut the budget a lot, $1 trillion. keep in mind that's for a 10-year period so simply divide $1 trillion by 70's and we get $100 billion. if we cut $100 billion from this budget we change this number from 3.5 to 3.4. that's what $100 billion means. and when the republicans are accused that we're going to slash budgets and we're going to really create turmoil in the budgetary process, the republicans are saying, basically, that we're going to cut $100 billion, also, from

3.5 to 3.4. you can do the math fairly easily. if you cut $100 billion, the deficit is going to lower from $1.5 trillion to $1.4 trillion. that's not going to significantly affect our debt barrel, nor the debt aquifer that we face. both are looming problems that simply o.m.b. and c.b.o. tell us break the system. now, i do not believe that our system is going to break because i think the american people are going to insist that we begin to do forensic audits of our government to find the efficiencies, to find the better ways of doing things. a forensic audit would, for instance, ask, are there duplications in the budget? do we have multiple departments doing the same thing? the answer is absolutely we have offices doing the same thing that in fact sometimes we

have 70 and 80 offices. we're paying overhead in every single office. i think that what we're going to have to do is find those duplications and we simply roll them into one office to where we're not multiplying the number of government salaries because every government salary creates about in its lifetime about $4 million towards this. you simply multiply the number of government workers times about $4 million in the life, it's actually a little bit more. but that is their benefits, their pay, and then everything associated with them. but i tell my friends as republicans, yes, i'm wholeheartedly in favor of cutting the 3.5. that we must do. and i believe we should have the forensic audit of our government in order to wring out the inefficiencies, the fraud alone in medicaid is -- in medicare is almost .1 in

this equation. the fraud in medicaid is .06. so you can see that there are significant numbers. but none of the cost-cutting that we're doing is actually going to balance the equation. we must, if we intend for our republic to survive, we must begin to grow our economy. we must increase the number of jobs. that creates a population that is more content with their welfare, with their prosperity, with their ability to pay their bills every month and also begins to clure our budget problems. now, if we're going to talk about creating jobs, we have to understand the greatest threat to job creation. the greatest threat to job creation is uncertainty. if you as an individual without owning a company are uncertain about what you're going to make in the stock market, if you see different stocks and you're afraid the stocks are not going to make you money, then you pull your money out of the stock market because of the

uncertainty. right now we have a lot of the money that came out in the last two years coming -- floating back into the stock market, driving the prices up. we're seeing companies are actually posting profits higher than what they intended and higher in the past years. so there's a mood of certainty among those people who are investing stocks and money is coming back to the stock market. the uncertainty drove it out. well, the same thing happens in businesses. if a business owner is certain that he is going to make new investment, right now if you have cash in the bank, it's less than 1%. you probably get a 1/4 of 1% each year for cash. the best thing to do with cash is invest it in creating jobs. and president obama, about three or four months ago, really had -- really hit the business community and reminded them here a week or so ago when they spoke to the u.s. chamber, you have a moral obligation to invest and create jobs.

well, the government has the moral obligation to give certainty through taxes and regulation. and that's the great rub here. we have regulated and taxed many of our corporations offshore. i know we have discussions every day about those companies that are taking tax breaks and they're evil and taking the jobs somewhere else. the truth is president obama mentioned it in his state of the union we have the highest corporate tax rate in the world, one of the two. and i think japan just recently lowers theirs. so we are taxing our companies into uncompetitiveness. they're not competitive because of that piece of their cost structure. ireland addressed this 15 or 20 years ago. they lowered their corporate tax rate from 36, which ours is, to 12, and companies began to flock into ireland. in the succeeding years, ireland began to raise its corporate tax rates so that now, then, companies are

flocking out of ireland. it's that simple. higher taxes will jobs. lower taxes create jobs. i'm not saying we should not have taxes, but i do say that tax policy, increasing taxes, that kind of tax policy will create stagnation and no job growth. but the second thing that causes that is regulation. companies do not want to put money into investments where they don't think they're going to get a return. they cannot get a return sometimes because they're simply regulated out of business. for instance, consider the farmers in the san joaquin valley. those were businesses. those businesses were making money. they were paying the banks and buying land and employing people, they're buying fertilizer. . but what we can't to keep alive, a judge declared we are going to

regulate the water away from the people and to the minnows. those people aren't making the payments on their land and not feeding their families. instead of being productive members of their families, they have scooted to the top, when we kill jobs through taxation and regulation policies, we transfer more costs to the top of the equation and that's the reason we are in such imbalance. 9.5% unemployment means we will have more people on welfare, food stamps and public assistance. we have a moral obligation to fix the jobs and we need to find a balanced point in regulation. i don't want to see the minnow go extinct but i don't want to see our jobs go extinct. the spotted owl was a regulation

that was put into effect and in new mexico alone, we lost 20,000 jobs because of the spotted owl regulation. i don't think we should stand by and watch the spotted owl become extinct but we shouldn't have given up those jobs and those jobs have gone to canada. i love the canadians, but would rather have the jobs here and using u.s. timber. in the meantime when we stop cutting timber, we see massive forest fires because of add-up of fuels. the trees used up all the water. formally what was happening, new mexico with its arid climate had fewer trees per acre, maybe 50, maybe 100. the trees are crowding off the grass, the graces on the slope, the water can't run through

grass as easily as it can run across barren ground. the water is rushing down the streams, used to the grass floated down and recharge so we are finding our streams looking for water. not only have we lost the jobs and put people on welfare and driven up the cost of government, we are creating shortages throughout the west and we must begin to deal with all of this. so if we are to look again at another industry that we have simply dismantled or in the process of dismantling, i would look offshore in louisiana. now my wife and i made a career in repairing oil wells and so we understand the processes that happened offshore and understand the decisions that were made. i think bp should be held accountable and being held

accountable and they are paying the bills and that is set in law and that is happening right now. but i do not think that we should have taken 100,000 jobs, those are jobs offshore that were making into the six figures, high taxes being paid to the government because people are making good money. and yet we took 100,000 jobs from the louisiana-texas economy and moved now to the cost of the government. if we begin to create the jobs again and rebuild the industries, the greatest solution for our budget crisis is that, grow the number on the bottom and as we create jobs, we pull across the top end of the equation. my friends, i do not believe that we really the discretion to -- i don't believe it's among our choices to not get our fiscal house in order.

if we raise taxes in order to increase this, which many people suggest, we're going to kill jobs and we get a wash, maybe no increase, maybe even a decrease. if we will set about curing the tax rate for our u.s. corporation and becomes explosive if we find the pen due lum and protect species, protect the environment, protect the workers and at the same time create jobs. i think americans are hungry for us to begin to solve the problems in that fashion rather than the partisan divide that says no, we can't create jobs and no, those jobs shouldn't be here. i think americans are going to insist that we do what it takes to bring back the manufacturing jobs, those good career jobs,

not just a job, but a career. that's what people are hungry for. they would like to be able to plan their life, to plan for retirement, to plan for college for their kids, to pay off a house, to build a nest egg. that's what americans are hungry for and it is not possible in the environment we have right now. when we kill the job growth, we kill opportunity. when we kill job growth, we kill prosperity. and i think americans are hungry for the prosperity and they're hungry for on forensic audit of our government to say why does it take $3.5 trillion to run the government. everyone sees what our government does that don't make sense, that cost too much and in the end kill our jobs and drive them overseas. now, the people would ask, well, that's not possible and it's going to take too long.

first of all, is it possible? yes, if we establish 3.5% rate of growth, then these numbers begin to balance up and we begin to cure the budget shortfalls both for every state and the entire nation. 3.% rate of growth, then you would ask, is that possible? well, we have averaged as a country, averaged 3.5% rate of growth over the last 75 years. it's extremely possible. so let us take on the hard tasks of finding the savings in the budget, increasing our job growth and we're going to find the solutions to the economic woes that threaten our entire society and economy. we have many people who question, can we cut the government? can we cut the size of government with unemployment? going to drive unemployment too

high and we shouldn't be laying off a single federal worker. new zealand came upon that question a decade or two ago. they asked themselves the same question, why is our economy sluggish. new zealand was in the bottom third of the world's economy. we are a developed country, smart people, hard-working people. why aren't we in the top third. new zealand's conclusion is they had too many nongovernment functions inside the government. and took one agency and cut the nongovernment jobs to cut them without regard what it it's going to do with unemployment. in the department of labor, that's the one they took on and i visited with the guy who actually did this, they cut from 63,000 employees down to one employee and said i could have

cut myself but i had to go home and face my wife and i should wish my wife happy valentine's day because she is in new mexico and my mom, the special women in my life -- he said he could not go home and face his wife, so from 63,000 down to one. the people who worry, can we cut jobs from the government without affecting unemployment? what happened in new zealand would happen here. they drop from the bottom third of the world's economy to the top third, and that's because the people they laid off from government went outside -- those transitioned from outside the government and began at higher pay with more efficiency and with more purpose. and the tremendous increase in their relative position worldwide jumped from the bottom third to the top third and i

think we would see the same thing happen in our economy. back in 2003, again to whether we should have taxes, increase taxes or decrease taxes, does it work, back in 2003, we gave the tax cuts under president bush and i was here at that point. voted for those tax cuts. when we cut the taxes, the growth rate was not 3.5% but 1.25% rate of growth. within 30 days, the economy began to boom up so it got to 8.75. now there was pent-up demand and people were buying equipment and buying -- kind of a surge, so that 8.75 moderated down to 4.25 and 3.75, which is all we need

to fix the situation. it is not that complex. the picture is not that complex. people try to make it so here in washington because they love to spend your money. but the truth is, the consequences are now on us. we are facing catastrophic economic failures and inflation if we do not begin to pay attention to the fundamentals that are in play in front of us. so as we approach this week, the idea that we can only cut $100 billion is one we should all question, we know there are greater inefficiencies. i'm going to propose a series of amendments that would cut even more, cut functions that i think could be delayed. we're going to suggest that the government maybe shouldn't be building a lot of projects, a lot of buildings right now. surely we could take a moratorium on that for a year or two. in the interest of future generations, don't we think that's a sacrifice we should

make. the speaker pro tempore: the gentleman's time has expired. mr. pearce: these are the issues that face us this week. mr. speaker, i would conclude by saying that i think it's achievable, the solutions are right at hand. we just have to have the will create jobs and cut the size of the budget. i yield back. the speaker pro tempore: the gentleman yields back.

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>> mr. speaker? the speaker pro tempore: for what purpose does the gentleman from georgia rise? >> i send to the desk a privileged report from the committee on rules for filing under the rule. the speaker pro tempore: the clerk will report the title. the clerk: report to accompany house resolution 92, resolution providing for consideration of the bill h.r. 1, making appropriations for the department of defense and the other departments and agencies of the government for the fiscal year ending september 30, 2011, and for other purposes. and waiving a requirement of

clause 6-a of rule 13 with respect to consideration of certain resolutions reported from the committee on rules. the speaker pro tempore: referred to the house calendar and ordered printed. >> mr. speaker? i move that the house do now adjourn. the speaker pro tempore: the question is on the motion to adjourn. those in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it, the motion is adopted, accordingly the house stands adjourned until

good morning, everybody. i am here parkville little

school and the center of technology outside baltimore with secretary arne duncan, and i came here on the day we are unveiling our budget for reason. i want to thank the principal, buddy parker, who is shutting -- showing us around, as well as ms. yoder, the eighth-grade science teacher. i have travelled the country, talking about what we need to do to win the future, talking about the need to invest in innovation so the next big ideas discovered here in the united states of america, talk about the need to invest in high-speed rail and high-speed internet, and this week i will be talking about the need to invest in education in places like clarksville.

so that every american is equipped to work with every america in the world. i am convinced if we outbuild and otdeducate the rest of the world the jobs of in industries of the future will take root in united states, our country will succeed. i am convinced the only way we can make these investments in our future is of the government starts living within its means. that is why when i was sworn in as president i pledge to cut the deficit in half by the end of my first term. the budget i am proposing today meets that pledge and puts us on a path to pay for what he spent by the middle of the decade. we do this in part by

eliminating waste and cutting whenever spending we can do without. as i start, i have called for a freeze on annual domestic spending over the next five years. this will cut the deficit by more than $400 billion over the next decade, bringing this kind of spending, domestic discretionary spending, to its lowest share of our economy tsks dwight eisenhower was president. let me repeat that. because of our budget, this share of spending will be at its lowest level since dwight eisenhower was president. that level of spending is lower than it was under the last three administrations and it will be lower than it was under ronald reagan. some of the savings will come through less waste and more efficiency. to take one example, getting rid of 40,000 office buildings, lots, and government properties

and an elegantly -- government properties we no longer need, we will save billions of dollars. instead of spending first and asking questions later, we reward folks inside and outside government to deliver results and to make sure that special interests are not larding up legislation with pat rodgers, i pledge to veto any bill that includes your marks. this budget freeze will require tough trusses. it will mean cutting things that i care deeply about. community action programs and low-income neighborhoods and talents and community development block grants that some many of our cities and states rely on. if we are going to walk the walk, these kinds of cuts will be necessary.

i am looking forward to working with members of both parties to take steps be on this budget freeze, because cutting annual domestic spending will not be enough to meet our long-term fiscal challenges. as the commission concluded, the only way to tackle our deficit is to cut excess of spending wherever we find it, domestic spending, defense spending, health care spending, and spending to tax breaks and loopholes. what we have done is make a down payment. there will be more work that will need to be done and it will require democrats and republicans coming together to make it happen. yet begun to do some of this with $78 billion in cuts in the defense department's budget plan, eliminating tax breaks for oral companies and to billions of dollars of savings from wasteful health spending. savings to make sure that doctors do not -- do stay in the

system seeing patients. while it is to be central to live within our means, while we are committed to working with democrats and republicans to find further settings and to look at the whole range of budget issues, we cannot sacrifice our future in the process. as we cut out things we can afford to do without, to have an responsibility to invest in the spot those areas that will have the biggest impact in those futures, and that is true when it comes to education. right now, this school, parkville, preparing kids for the jobs of the 21st century. students in the magnet program here start by taking courses in each of four subjects, from

engineering to environmental science, focusing their studies on one subject over the next couple of years. i am told the most popular subject at this school is engineering, and that is important because today the most common educational background for a merkel's top business leaders is not economics, not finance, not even business. it is engineering. engineering and math, critical thinking, problem-solving -- these are the kinds of subjects and skills that our kids need to achieve success in the 21st century. that is why we are spearheading a drive to prepare more than 10,000 new teachers over the next five years and train 100,000 more current teachers in the field. that is why we are pushing forward in a race to our top of the schools that has led over 40 states to raise their standards for teaching and learning for less than 1% of what we spend on

education each year. that is why we are protecting the more than $800-increase that we added to the most widely used federal scholarships in making the tough was to make them on a firm footing for years to come. that is why we are attractive meet the goal when i said when i took office. by 2020, america will once again had the highest proportion of college graduates in the world. the american people understand why this is so important. i think those of us who are working in washington beat understand why these investments in the future are so important as well. i mentioned in my weekly radio address a letter that i recently got from a woman named brenda. she is a mom, a special ed teacher in missouri. her husband lost his job when the local chrysler plant shut down. money has been tight for the family, and they have had to sacrifice the little things that they can do without.

one thing that when that knows she cannot afford to sacrifice is her daughter rachel's education. that is why she is looking as we speak for a second job to help put rachel through college and ensure that she has the money for ritual for her future. what is true for brenda's family is true for the larger american family. education is an investment that we need to win the future. just like innovation is an investment that we need to win the future, just like infrastructure is an investment we need to win the feature. and to make sure that we can afford these investments, we are that to get serious on cutting back on those things that would be nice to have, we can do without. that is what families across the country do every day. they live within their means and they invest in their families' futures. it is time we do the same thing

as a country. that is how we are " get our fiscal house in order, and that is how we will win the featured in the 21st century. thanks very much, everybody. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> hi, everybody. thank you for coming. austan goolsbee will go over the

economic assumptions and take questions, and then jack will come up and say some remarks about the budget and take your questions and answers. >> thanks, ken. as a prelude we thought we would get the assumptions out of the way. i would make four short points. the forecast that we used as to be locked in for planning purposes as of mid-november of last year, so it predates the tax deal. as you know, many of the private forecasters out their forecasts based on what was in the tax deal, and most of that is not in the forecast. number 2, real gdp growth on a year-to-year basis, the administration is forecasting 2.7% in 2011, 3.6% in 2012, so our growth which for 2011 is a

fair bit more than the consensus of private forecasters surveyed by the blue chip or the survey of professional forecasters. the long girl run we anticipate catching back up, that the potential gdp of the united states has not been severely damaged by this recession, so our medium-run forecast is faster. it is within the so-called central tendency that comes out of the fed fomc forecast of november, which is the reasonable range in which they drop off the highest and lowest. it is rather in the center of that central tendency. over a five-year period, the typical recession since world war ii has been followed by growth rate of a little less than 4.2% over five years. our forecast is about 3.8% over

five years, so it is lower than the typical recovery, and we assumed that because it is harder to get out of the financial recession. the third point i would raise is the unemployment rate in our projection is at the end of 20,011 -- 2011 it would be at 8.2%. that was made in mid-november. the upon rate stands at 9.0%. unemployment is likely to fluctuate threat the year, but any revisions we come out will come at the mid-session review. for inflation, we project in 2011 the cpi inflation will be 1.3%, so actually declined from where it is now. it is very much in line with other professional forecasters, and that in 2012, 2013, we go back is a bit like the fed and others' 2% inflation level.

that is the overview. if anybody has questions, i can answer those. otherwise, we will switch. [unintelligible] >> as you know, the running of the budget machinery is extremely onerous. he could only have one forecast. we have to make a policy forecast as of mid-november. we had included the middle income part of the tax cuts getting extended for a year, but as you know, we did not anticipate that the tax deal in november -- we did not anticipate the deal would be as significant as it turned up to be, just as most of the private forecasters did not. >[unintelligible]

we have not gone back to figure that thing out. in the analytical perspectives volume, there is an analysis if the gdp growth rate is better or worse, what is the impact on the deficit. i think it is about a little less than a hundred billion dollars. it is better -- or rather than to speculate about changing what the forecast should be, we updated at the mid-session review. we will see what happens over the next six monstera -- months. [unintelligible] into the deficit forecasts go many things. the gdp, and a current rate, at a number of others. on the short run gdp forecast, it is fair to say our forecast predates the full budget deal of december and the tax deal. and the blue chip and others

have revised up since they have come out. no further questions, i will now turn over to the main event. >> thank you, i will now say a few words about the budget. the budget was in the congress today is a responsible plan that shows we can live within our means and we can invest in the future. it cuts spending and cut its the deficit. we have more than a trillion dollars in deficit reductions, and because of the policy is on a path so we are born to reach us is as minimal -- reached a sustainable deficit by the end

of the decade. it will ensure be paying for what we spend every year. the goal is for the deficit to be in the range of 3% of our economy by the middle of the decade. it is important that reducing the deficit is a crucial step for us to take, but at the same time, we need to invest in areas where if we do not it will undermine the ability to generate economic growth in the future. we need to outinnovate so it the economy will create jobs in the future. on the discretionary side, domestic, we have a five-year freeze, which will save $400 billion over 10 years. that brings spending on this part of the budget down to a level that was at a share of the economy when eisenhower was an office. part of the cuts are and

outdated programs, things that are duplicative, and things that we would choose to cut because it is the right thing to do. part of the cuts are not on to be in that area. they will be things we would not do but for the fiscal challenges we face, and we have been enumerated many of them, reductions of block grants by $300 million, community services block grant, low-home energy assistance program by $2.5 billion. these are all things that the a in a different environment we would not be looking at making those kinds of reductions. we take a billion dollars out of grants of large airports, ago and dollars for water treatment and plants, and in total we have more than 200 terminations and reductions, and we have a book which many of you will get a cut

out that this is how we get $33 billion in savings just in this year alone. the savings are not limited to the domestic area. and the national security budget, we're not freezing budgets in that area, we are making serious reductions. in defense, we can no longer afford to stay on that path. our budget brings spending on defense to a no-real-growth level. it means we will have to reduce certain weapons systems that we cannot afford and that the military to not -- the military does not believe we need. if you look at the spending for iraq and afghanistan, they are not in the base defense budget,

and these come down considerably in 2012. if you ice because of the withdrawal from iraq and if you look at the savings in that area, spending in defense goes down more than 5%. we are not going to be able to get back into the kinds of sustainable situation that we need to just by cutting discretionary spending. the budget looks at other areas as well. it looks that mandatory spending and it looks at revenue. i would like to highlight a couple of areas where we have savings in those parts of the budget. every year for the past many years, action has been taken in two area -- the alternative minimum tax, where there is a bipartisan consensus that middle-class taxpayers should not fall under the alternative minimum tax credit and other is in medicare, where there is a consensus that we should not cut what we pay doctors and the

program by almost 30%, because if they did, it would stop treating medicare patients with the problem is the way we dealt with it for most of last decade is to put the expense on and our national credit card at the kick the can down the red. this budget says we cannot do that anymore, and in the case of the alternative minimum tax, we have a specific offset pays for an extension of the provision of and keep it from hitting middle class families for three years. it will reduce the itemized deductions for the top income bracket, and it would take the value of itemized deductions back to where they were and the reagan administration. it is the first that towards dealing with cutting back on the spending that goes on in the tax code, and we put that in the budget as a way to pay for the alternative minimum tax for the next three years di. we have $62 billion in savings

in dozens of different parts of the health budget which would pay 482-year extension of the fix. last year in december congress worked on a bipartisan basis to pass a one-year extension. that was the first time it was paid for. it did not have to be paid for under the budget rules, but it was the right thing to do. here are the ossets to pay for it for the next two years and now we need to work together so we can deal with it on a longer- term basis so it does not become a year to year charge. i would like to talk about a couple aspects of the budget i call stewardship areas. one is the pension benefit corporation. we have seen over the last few years that the rest of the federal government, risk to taxpayers having to bail out entities, to something we want to avoid in the future. in our budget we have a proposal

to give the pension benefit guaranty corp. the ability to set premiums which are now very low that matches the default risk. this would give them the ability -- participation is voluntary, but in which is the burden of the rest from the taxpayers' back to the companies that get the deficit. it would reduce the risk that there be a need for a taxpayer bailout in the future. in unemployment insurance, this has been a tough time for the unemployment insurance trust fund. each of the state has a fine. they have been heavily burdened by the recession. we have a proposal that would have a two-year moratorium on federal increases in unemployment insurance taxes, and i should point out because the trust funds of the state funds have borrowed from the federal government, those would go into effect without the moratorium, and we would give the states two years to get their funds back in solid shape. that means that going into the

next time they need to draw down because of unemployment being an issue, they will be in a condition to do so. in 2014, well on the other coverage, we propose that we adjust the wage base in the other implements system so that in real terms it stays where was the last time it was set in 1983. a few other areas of the budget. on the tax side, the president has called on congress to work with the administration on corporate tax reform, to simplify the system and eliminate special interest loopholes. this would not only level the playing field, but give us the ability to lower rates and make american companies more competitive internationally. while it does not contribute to the deficit in the short term, the president in the state of the continues to say we need to work together to find a solution to the long-term issues of social security, to make sure

this generation and the next can rely on their benefits. he calls for us to work together in a bipartisan way to keep this compaq for the future. this is a budget that lives within our means so we can target critical areas where we -- where we need to invest in the future, education, innovation, and building our infrastructure. even in the areas where we invest, they're tough choices in this budget. i would like to talk about education and the pell grant in particular. pell grants, the most important when we open the door for opportunity to college for 9 million students. it is part of what we need to do in order to have a workforce that is trained for the jobs of the future. that costs of the pell increases have been rather dramatic, or so then they were expected to be. in this budget, we took a number of difficult decisions to protect the tell increase to

make sure that it does not need to be pressure to reduce the annual grants, which are now $5,550. we have put in provisions, which have substantial savings that will make it possible to protect those tell grant increases. one a provision that says students should get pell grants for the school year, but not for summer school. historically, pell grants were only available once a year for the school year. a few years ago the program was changed so that summer school was treated as a separate award. it was expected to cost a few hundred million dollars. it cost several billion dollars. we cannot afford that. we're not sure why the cost grew that much. we need to protect the basic pelt her grandparents we think summer school should not be eligible. another proposal, graduate students get student loans, we need to make sure they have access, we need for access to

higher education to be as easy as possible. under the current law, no interest starts to build up until they graduate. we have a proposal that would start interest accruing while in school, but it would not be paid back until graduation. in k-12, we have a variety of reform proposals the reward success. we consolidate thousands of programs into much smaller numbers that emphasize competition and emphasize rewarding things that work. we eliminate 13 education programs out right. to invest in the industries and jobs of tomorrow, we invest $148 billion overall in research and development, and this supports our goal of putting a million elector of vehicles on the road by 2015, doubling our share of electricity for clean energy by

200035, and reducing energy use in buildings by 2020. we pay for this by eliminating 12 tax breaks that now go to oil, gas, and coal countries, which will raise $46 billion. we have a comprehensive surface transportation bill which creates hundreds of thousands of jobs in the short term and has a $50 billion up-front investment. this will support projects of national importance, including high-speed rail, and consolidates duplicative programs which are often earmarked, into five. it will require we work together on a bipartisan basis to make sure it does not increase the deficit. the budget also has a number of reforms which change the way washington does business. putting more federal funding up for competition, cutting waste and reorganizing government so

it other servers the american people. the budget cuts more than $2 billion in administrative overhead, travel, printing supplies, and advisory contract services. it embraces the competitive grant programs based on the rays of the top model, and it applies that to program from early childhood education through college, from allocating grants and the way we encourage commercial building efficiency and electric vehicle the plummet. it will set up a process that will enable us to dispose of excess federal property so we can actually save billions of dollars by not holding on to property that we no longer need and that could be used in the private market. if cutting spending and cutting our the visit is going to require us to put political differences aside, it will require we were together.

we need to make sure that we are making the kinds of cuts that we need to to get our deficits under control, but we need to make sure we do not cut the things that are vital to the future growth of the economy and how we create jobs for the future. we have responsible budget, which we think does exactly that. it puts us in a pact halving a sustainable federal budget, with as it's come down to a level where we are not adding to the debt by the middle of the decade, and it is a program where we will live within our means and still invest in the future. i will stop there and take your questions. [unintelligible]

it does accomplish what was the task given to the commission, which was to bring the deficit down to 3% of the economy so we would have a sustainable level of federal financing in the future. the budget draws on the idea of the commission in areas like corporate tax reform, medical malpractice reform, even the government reorganization and handling of surplus property. there are many provisions in this budget that reflects the good work done by the commission. i think the commission did something very important. it put on the table a lot of ideas, brought some degree of bipartisan consensus, but more important, civil discussion over things that have been very contentious. the president in his budget, in the state of union, tries hard to this view respecting this down payment and working together on the long term solutions. this budget is a down payment.

is meaningful. if we can accomplish what is in this budget, we will set our economy on the course in the right direction. in the areas where -- the long- term future, there has been a lot of discussion on things like social security. should it be in the budget, should it not be in the budget. social security is not enter bidding to the deficit in the next 10 years we're considerably beyond that. it is something that we need to address in the long term to make sure workers in this generation, retirees in the next generation can rely on their benefits. the president said in a state of the unit -- state of the union that he wants to work that the conversation about how we can do this in a bipartisan basis. there is a lot of things in this budget that proved the commission did important work and there is a lot more work to do.

[unintelligible] the process gets going today with the president sending a budget to the congress. it is a comprehensive budget that puts all areas of the budget on the table. it encompasses the goal of stabilizing our deficit. we look forward to working with the congress on all the areas that are covered. yes. >> on medicare payments to doctors, cuts $63 billion, it looks like medicaid provider taxes are the biggest line item, about $18 billion, and this item one is forma cuts of $12 billion, to pay for delay repeal. could you explain those budget items, please. >> $62 billion of savings in

this area. a little over 30 varian dollars come from brazil -- come from -- a little over $30 billion come from provision items. we collect that back in a process called recoup men. make sure we only pay once for each service and eat service would pay for it is covered in a legitimate charge. that is roughly half, of the savings, things that our program integrity issues which are not controversial in terms of heated political debate or the industry. in the area of medicaid, there is to provisions that have particular savings. one is a provision that says if states are coming in for federal matches, we should make sure that we have calibrated the

match so there is a real dollar being paid for a real dollar that is being matched. that is what the provider tax would do. another piece of the medicaid savings says that as we look at beyond the implementation of affordable care act at a time when there is less uncompensated care, we need to calibrate what is called the disproportionate share payment to make sure we are giving payments to providers who are treating people with uncompensated -- who did not have insurance. the third basket is in the area of pharmaceuticals, saying medicare and medicaid should have access to things like generic biologics drugs. all these fit into a category that are in an area where everything you do, if people study closely, should be a place where we can have a serious fashion and accomplish them. yes.

[unintelligible] >> hi. what sort of cut are you proposing for veterans' care, especially the gi bill, housing, therapeutic expenses, and keep you know if the republicans are also proposing any veterans' cuts? >> we have substantially funded the veteran programs very i would have to get back with you at the details, we have not cut back in a serious way on benefits to veterans threat we have worked to the process of full refunding to fun levels of current need. it is confusing to look at the v.a. budget.

this is the first year that this has been necessary, we have shored up the funding so that v.a. is the money it needs, not to continue benefits, but it include benefits -- reforms. >> i have to state get back to you, because this weekend i did not have time to look at each of this this the proposals that was on the table. >> thanks. the president talked during the state of the union that this was a sputnik moment, and beyond the $148 billion, if you had to add up everything that you think is budget spending, if the republicans do not get it, what is your recourse? >> i cannot give you a number.

that amount is certainly the core of it. education is part of it as well. i just came from a school in maryland where the president announced the release of this budget, and it was exciting to look at hundreds of students whose favorite subject is science, math, engineering. they're getting the ending education they need to get the jobs of the pitcher can be able to build the economy of the future. it is not just the r and d part of the budget. it is the education part of the budget which is the part of how we prepare to stay at the cutting edge. we spend more than any country on r and d. one of the things we try to do on this budget is target are spending to those areas, where, with a push, the united states can get a step ahead so we can be most competitive going into the future. we can get back to you with specific numbers. yeah.

[unintelligible] >> it was interesting to hear you say that social security is not returning to the budget does that, but why is social security ought still on the table? is it not stop oxon with -- is it not solvent until 2037? >> we need to look ahead and make sure that people who are working to they can count on the benefits being paid when they retire. it is not an urgent moment to do it. it is not anything that is going to happen this year or next year, but it is the right thing to do well in advance. it is not something that would affect the short term budget rise in. it is still the right thing for us to do in the right way, and the president laid out in the budget principles that we think reflect the right way.

>> he said it is gone to require both sides to put their political differences aside, but you have to know that both sides of congress are entrenched in their views and that house republicans intend to cut $100 billion in the next seven and a half months. is this not wishful thinking on your part? >> it is fair to say every side begins with its deeply held views. we have ours, they have theirs, and it is also true that looking ahead there is a part-time predicting where the moments coming together are. last november nobody was predicting that congress and the president would come together and do something both important and historic in passing the tax bill. both sides had to come off of positions that if they pushed

them would make it so there could not be an agreement, and to find that space in the middle. pattern of how you work in a bipartisan way. it is true today. we have put down a reasonable plan, a comprehensive plan. if our plan. we understand that is the beginning of the process. we did not have a monopoly on always them and we look forward working with congress. there will be many challenging moments, but we have to work together and work in the interest of the american people to reach agreements where we can agree. [unintelligible] there has been a lot of discussion about what is the best way to move forward. the history is a pretty good guide. the areas which require bipartisan consensus, he would be hard-pressed to find a

moment or either side going forward with a dramatic plan as move the process for. says of security reform in 1983. i worked on it in 1981 when the president came forward with a proposal, and it said the process back. it took years to get back to the point where the party could come together, and that was facing a financial crisis at the time. what the president has tried to do was set the tone so we can engage in a responsible way. i believe that is the way you have effective discussion, so we have done what is most constructive and most productive. >> thank you. i have a question, he said this reflects the president's crier is in education. what would he say to a low- income elderly persons in massachusetts who cannot afford

to pay their heating bill? why are you investing in wireless and not helping her pay her bill? >> you are asking why we make a reduction in lower income home energy assistance program. this is a hard cut, one that has a hard impact. the program was founded in 2008 at $1.5 billion. we had a huge spike in energy prices and it doubled. looking at our fiscal challenges, we cannot straight line the program at $5 billion, so we have gone back to the level it was at when prices were roughly the same. this does have an impact. i hate to talk about the history of the old days, but i helped create the program when i work for speaker o'neill in the late 1970's. it has done an enormous amount

of good for an enormous amount of people. it was never meant to be an entitlement program. its funding level has fluctuated based on needs. balancing our physical challenges and the funding change from 2008 until now, we made that decision. we have set in our documents in the budget that we will keep our eye on where prices go and what the in the future is, we cannot just cruise at a high spending when we try to make these difficult savings. in terms of investing in the future, we have been clearer that we need to create more opportunities to invest in education, innovation, and in building infrastructure for the future. we have had tough tradeoffs. >> speaking of those things, could you give us a one-yoear

2012 number for these types of new investments? what is the total amount for 2012 temporary programs, a prominent programs, and what would be the 10-year cost? >> i will have to get back with you four numbers, in general up her reasons are annual or crest. 12 funding levels in our quest. that would be a multi-year commitment. as far as what the tow comes to, we can get back after. yeah. >> he said in your opening remarks that we were going to be paid for what we spend every year with this budget. specifically, at the sgr, what

the savings are are coming from the out years, and you are on staff to find another solution, which seems like turning it into the same problem we had with the sgr payment rate. can you speak to that with the principles laid out? >> the way the rules work, he typically look at the savings in the entire window, and you can apply them to spending in any one of the years. by locking in savings over 10 years, we are paying for the two-year extension. as far as the future goes, we are on to need to redouble our efforts in this when the where we have three years of paid-for fixes to work together to come up with a sensible reimbursement approach which we paid for in a fix on a more permanent basis. building in a window, which is between the law enacted in

december and what we propose, three years, should give us the opportunity to do that. were you have a bipartisan consensus does not make sense. three years should give us time to figure out how to pay for it. [unintelligible] we are paying for the two-year extension. i am distinguishing that from dealing with a permanent fix. it is a very significant down payment. yes. >> it appears that you anticipate great -- growth in the federal workforce by 15,000. what would you attribute that growth to in general, and our other specific areas in which you expect expansion? >> there are many agencies that

are shrinking, there are a few that are grown, and the growth is in areas that for the most part relates to new activities. implementing financial regulatory reform requires new personnel at the treasury department, at the sec, at commodities futures trading commission. if you look agency by agency, you will see it is not a story of broad-based kraft. it is in most cases pretty concentrated. >> i have a one-your question, a time when your friends in the house are talking about cutting $60 billion this year, and looks like your policies are increasing deficits in 2011 and 2012, and i am wondering if that is a reaction to the state of the economy, and if you think it risks antagonizing the process, because republicans are reacting with a certain amount of

disappointment to this document. >> 2011 is the effect of policies already made. we had a bipartisan agreement in december to pass a very important piece of legislation, which is one of the reasons we're seeing greater economic growth and faster job creation. it was the right thing to do, but it had a clear consequence. it increases the deficit in 2011, an increase in the number as of ways. we have a payroll tax holiday, which is putting $1,000 and the average family's checkbook to spend this year. it extended provisions that would have expired and had they been expended on the extended, some of the expense would have gone into the entire fiscal year. a concentrated the expense in fiscal 2011. there are a lot of things that

are making the 2011 deficit go up, but it is not policy we are making. it is a reflection of policies may. in 2012, there is some tale to the tax agreement. and we are seeing the end of some of that spending associated with the extraordinary measures of the last few years. we said, and i think even the commission's have said, and there is a general agreement, that putting the brakes on right away is not challenge. if we were to be able to make enormous savings right away, we would say that you have to start worrying about what the impact on the recovery is. the question is, as you go into 2012, 2013, are we putting place in the policies that will get us to that sustainable level of deficits? we think we have put them in and have a civil mix of policies.

they grow over time, but once we lock in the five-year freeze, it has real impact when you get to year 2012, 2013, 2014, 2015. the entitlement savings go on, as do the things like the tax provisions to pay for the alternative minimum tax. >> could you walk us through how the 2/3, 1/3 calculation is made clear if you look at the 1.1 trillion dollars in deficit reduction, i could see the freeze money, are you counting that that service money as a spending cut, and where are the other spending cuts beyond that? >> the spending -- mandatory

savings, and all of the other spending programs, including interest on the debt, which is a spending item. on the tax side, it is a net number, so it is showing that 1/3 up part of our deficit reduction is the net tax increase. we have a considerable number of provisions that reduced revenue. when you go to the tables, there are things that raise revenue, some things that lose revenue, and it nets to give us the numbers of the savings, which is $1.3 trillion. [unintelligible] i just gave you the structure of it. it is net savings and net tax cuts, with the interest being counted as spending.

>> it is a little confusing, and maybe there's a logic to it, when it comes to the wars, which you cannot count toward your deficit reduction, sgr, amt, and the tax cuts, middle-class and wealthy, it is confusing what the theory is here in terms of what is baseline, what is in the budget, what is counted toward the deficit, etc. is there some overall way of explaining how you make those out? >> that is a good question, and i concede it is confusing. the baseline assumes that the middle class tax cut, where there was a bipartisan extensions to extend it, was permanent, and the upper-income tax cut was not permanent. we do not count the savings from

letting the top brackets go back as part of our savings. that is in the baseline. on the whole war spending, the spending for afghanistan and iraq is in a category called overseas in some seed operations. we see that coming down from 2011 to 2012, and that is real reductions in outlays. we have projected in the featured that, we do not know exactly what the levels will be, but there will be some level of ongoing activity, and we have estimated that the $50 billion in the out years. as we get each year, that will be higher or lower, depending on where we are, but the budget is not the place project a very precise estimate that implies when your troops moved and what your levels of activities will be out in the future. on sgr, assume it will be fixed.

we put it in as savings: four. on me amt, we have only taken credit for fixing the part of amt we have provided offsets for. in the baseline, the amt is assumed to be fixed, but it is not assumed to be paid for except for the offsets that we have provided. i do not know if i have walked to them and a clear enough weight. -- way. yeah. >> you mentioned that you had not read any of the republican counter proposals. >> i did not say i had not read any of them. i had not read all of them. >> in terms of the -- what you are facing in these negotiations, there are deep divisions within the republican conference in the house. do you feel at the moment that

you have a coherent marketing partner, and how would you rate the complexity of these upcoming negotiations with the ones in the past? >> i think we need to see how things play out this week as the house takes up that 2011 appropriations bill. it is clearly a deep sense of reductions, and there are provisions in it, some of which overlap with things we would like that, others of which we would take issue with. it is early for us to be responding until we know precisely what they are going to do. then the senate passed act. this is the first. there will be opportunity for the white house to engage. it is always complicated when you have the house and the senate's that are likely to have different views at a white house that will have to work with them to reach a consensus. what we do have agreement on is it would not be prudent to shut

the government down, we look forward to working with through these differences once things these differences once things settle dow