you'll permit me the time. resolved by the senate and house of representatives in the united states in congress assembled that congress disapproves the rules committed by the federal communications commission in the matter of preserving internet and broadband practices and such rules shall have no force or effect. that's it. eight lines. no force or effect. mr. speaker, i urge strong support of my colleagues of this rule that will then bring to the floor h.j.res. 37 and allow in its

well, good morning, everybody. i want to thank my colleagues on the house budget committee, who are standing here with me for all the ward work they have been doing to put the budget together. i want to thank jeff sessions for joining us here. this is the path of prosperity. this is the budget that we're putting forward today. this represents our choice for our country's future and it's our commitment to the american

people. the facts are very, very clear. for too long, washington has not been honest with the american washington has been making empty promises to americans from a government that is going broke. the nation's fiscal trajectory is simply not sustainable. the debt is expected to grow to catastrophic levels in the future. we don't need clever politicians in washington. we need real leadership. the president's recent pujt proposal is worse than the status quo. the president accelerates our e descent. we need more economic growth and job creation. he proposed to permanently

enlarge the size, the reach, and the scope of the federal government. he offered no reforms to save the vital health and retirement programs. our budget charts a different course. it's very different than what the president has offered. we propose to cut $6.2 trillion in spending over the next ten years. we put the nation on the path to pay off our national debt. our goal is to leave our children and grandchildren with a debt-free nation. we offer $4.4 trillion in deficit reduction in the first ten years alone. our budget is our plan to tackle the country's greatest problem. if we don't take this on head on, we don't able to do it on our own terms in the kind of gradu gradual, important, sense shl way we are talking about today. i want to thank the people at

the congressional budget auoffi who work sod hard over time, overnight to get in added up. i would like to turn this over to the congressman from utah. of the budget. >> thanks, paul. thanks to my colleagues on the house budget committee. i happen to be on the oversight and government reform committee. we're committed to changing the way we do business. we don't want to perpetuate the status quo. the cuts are important. we need to be on a trajectory to maintain the fiscal sanity in the country. we want to 'chooef a 10% reduction in the next three years over the federal work force by attrition. coupled with a true pay freeze. we want to tend corporate welfare, end permanent bailout

of dodd-frank. we want to take fannie and freddie off the back of the people. we are committed to reform. it will be an exciting process moving forward. i think the american people will be excited that we're living up to the obligations and commits commitments in the pledge to america. thank you. >> one of the things we are vying to achieve is we believe in this country that we ought to have a social safety net. we believe we should have a safety net to keep people from slipping through the crackses and to help people that cannot held themselves. the social safety net is fraying at the seams. i want to turn to todd young from indiana. >> well, we mst not just focus on getting government smaller

and more efficient. it has to be more effective. we in the budget, build on the successes of welfare reform in the 1990s, starting with medicaid. it's program that, for decades, has ensured access to health care to millions of low-income americans. we want to it be sustainable. right now, it's unsustainable. we looked at the financing structure. governors, like mitch daniels of indiana, governors of both parties are looking for more discorrection. we ant to tend one size fits all approach to medicaid financing. we convert federal spending into block grants. we give governors, if conjunction with the state le e

legislator legislators, the able to change things for their constituents. other one size fits all programs we would change to block grant programs for the states. we give the governors flexibility to tar get aid to the neediest citizens. the best welfare program is a job. we changed the job training program. we changed it to a single program. a program we can hold accountable. it's a targeted scholarship program. lit prepare the workers for a globally competitive economy. these are bold programs, bold reforms, but they're reasonable. the things many of us campaigned on before we got here to washington. i welcome a constructive

dialogue. next, dr. price, to discuss the reform of health entitlements. >> thank you. americans are truly sick and tired of washington's accounting tricks and budget gimmicks. as the chairman said, empty proms. this budget, this budget rig here, this path to prosperity is based on facts. as a physician,ky tell you that the facts are that obama care is a threat to the affordability and accessibility and quality of health care. it takes away choices from patients and families and doctors and saddles workers and job creators and taxpayers with trillions of dollars in costs. the current medicare spending is growing at a rate twice as fast as the nation's economy with 10,000 baby boomers reaching retirement age every day.

this budget repealed obama care and saves medicare so that health and retirement security will be possible for all americans. this budget repeals and defunds the government takeover of health care so we can advance patient-centered health reforms. this budget talked about the current unstaenlable trajectory of medicare. it saves the program for future generations. we allow folks access to the same kinds of coverage options that members of congress enjoy. no changes. let me repeat, no changes are made that would affect those in or near retirement. this budget also forces action on saving social security. by requiring the president and congressional leaders to put forward solutions to save this critical program. many of us have offered ideas on how to save social security.

more will be forthcoming. this budget, right here, will move us from an era of debt and doubt and despair into a stable and secure future by being honest with the american people. i'm honored and proud to stand with my colleagues to support the path to prosperity. >> next, diane black. a member of the house ways and manes committee. >> thank you. i'm proud to be standing here today as a member of the committee, unveiling a budget that takes real steps to get this country's finances back on track. and focuses on real economic growth and job creation. this republican budget stands in sharp contrast to the one that the president released a few months ago. which would impose a 1.5 trillion dollar tax hike on american families. that is not including the $800

billion tax increase contained in obama care. this budget halts the president's plans to burden our hard-working americans are more taxes. it keeps taxings low so that the economy can grow again. by lowering these rates and broadening the base, we can ensure that our tax code is simpler for families, less burdensome for our workers and allow job creators to grow businesses and hire more people. it encourages economic growth that is the key to our country's future prosperity. as a member of the ways and means committee, i know that the chairman hasout outlined a pro-growth reform for individuals and the corporate side. we're serious about forwarding proven pro-growth policies. if both of my committees, we're

working to get this country back on a sound financial footing. i'm proud to be here today as part of the majority to lead where the president has failed pop that is to restore america's future growth and prosperity. i turn t i back over to our chairman. >> i want to congratulate diane on her great choice of committee assignments. they often say around here that the democrats are the adversary ris and the enemy is the senate. that is not how we view senator jeff sessions. let me now turn it over to him. >> well, this is really not a political matter at its bottom. president obama's budget committee chairman told us, erskine bowles and allen simpson that we're facing the most predictable crisis in our

nation's history. the budget act allows three budgets to be submitted. one from the president, one from the house, one from the senate. the president has submitted the most irresponsible budget in the history of this republic. he has punted. he has increased spending every year. he increases taxes. and increases debt. interest rates would go from -- interest payments from $200 billion last year to $940 billion in ten years. so, this -- the senate has produced nothing. and the house has stood firm. you have in the face of all kinds of threats, that we're going to attack you, and we're going use every kind of political force against you, you have looked the american people in the eye, and submitted a

fact-based budget. that will stand up to scrutiny that will alter the unacceptable trajectory we're now on. people can disagree and make suggestions about the details. but fund mentallyfundamentally, honest budget. we're going take to it the senate. we're going to stand up to those that will attack you for having the courage to tell the truth about the challenges we face. and i believe we're starting a national dialogue. thank you for your courage and your willingness to stand firm. >> thank you, senator. let me walk you through some of the charts and some of the numbers. look at the screens on the side here. let's look at spending, first of all. let's look at spending.

all right, look at our historic path of spending. the size of the government has been around 20%. this is the path that the president's budget is come complicit with. we bring the size of the government back down to 20% of the gdp and lower it from there. we have budget enforcement measures. we get $6.2 trillion in sending cuts off the president's budget. let's take a look at deficits. take a look at where we are headed. we have had deficits in the past. we had a small-time pusurplus. look at where we're headed.

this is the path of the status q quo. these are the kinds of deficits we'll have if we don't fix the problem. here is the path we're proposing. very different choice of two different futures. let's talk about debt. now, we have had debt in the country before. people are familiar with it. people get a mortgage to buy a house, get a car loan. you measure your department relative to nincome. look at our debt. since world war ii, we have had debt. 108% gdp. we had high department. loaned it mostly to ourselves. the debt went back down. look at what the congressional budget office is telling us is our future of debt. this red ink will destroy our economy. we know, as matter of fact, that

weaver giving the next generation a lower standard of living. we asked the congressional budget off to tell us what the future of the economy looks like. models break this 2037. the computer crashes in 2037. they can't conceive of a time in which the economy can continue in that moment because of the debt. this is our debt path. we, according to bco's long-term analysis, we get this contained, under control, we get it paid off. our children. we believe we have a moral responsibility to put the kinds of controls and reforms in place that keep this country growing. now, let me turn to growth. we need jobs growth, we need economic growth. so we asked the heritage center for data analysis to review this

budget with respect to economic growth. they use the global insight model which is the model most used. this plan results in faster economic growth. nearly $1.5 trillion in additional economic growth over the decade. this plan is an estimated to result in more jobs. nearly 1 million jobs next year to be created under this plan than otherwise would be. it predicts that the unemployment rate goes down to 4% in the year 2015, and then the last year of this budget, we're kicking off creating nearly 2.5 million new jobs in the private sector in that year alone. it also predicts higher wages. $1.1 trillion in higher wages for workers, also higher family income. nearly $1,000 per family, per year results from the better economic growth that this plan for prosperity presents. this is a plan for prosperity. and so when you take a look at the choice of two futures we

have, we can either choose the red line, which is the sea of debt and deficits. the line the president's proposing we go on, the line our country is on, or we can choose that green line where we face up to the challenges that are confronting this generation now to give our country a better future. we've always had a legacy in this country, where each generation, whether it's war, depression, or what not takes on its generation's challenges so the next generation is better off. we know for a fact that we are not going to be giving our children a better standard of living. we know we're not going to make them better off. that is a fact not doubted by any independent fiscal expert. we owe it to our country, to our kids to fix this problem. let me close with this. one of the worst experiences i had in congress was the 2008 financial crash. that caught us by surprise. we were in the middle of all the negotiations where we had an

economic crash that came. and out of that resulted really ugly legislation, t.a.r.p. and then we witnessed trillions of wealth being lost, millions of seniors lose their savings, and then we witnessed millions of people lose their jobs. we're still trying to recover. let me ask anybody who is listening this, what if your congressman, your president saw it coming? what if they knew it was going to happen? what if they knew why it was going to happen, when it was going to happen, what nature, and more importantly, what if they knew what could prevent it from happening and they had time to prevent it but they decided not to because it wasn't good politics? what would you think of your president, your member of congress? well, that is where we are right now. this is the most predictable economic crisis in our history, and what are we doing? playing politics?

we don't need clever politicians, we need leaders, leadership. and so we believe we have a moral imperative. we got together on the budget committee on our republican caucus. and we decided it is time to stand up and do what is necessary to fix this country. we need to be honest with the american people about the problems we face, we need a fact-based budget, no more counting tricks, no more budget gimmicks. and that is what we're offering the american people with this path for prosperity. happy to take your questions. >> -- all the changes you proposed, this budget would not see a surplus till 2040. >> till late 2030s. that's right. >> 28 years. for a generation. some of your fellow republicans, maybe not those standing here say we've got to do it sooner. >> so dana, this just shows you how deep of a hole our country is in. this just shows you it took many years to get in this hole and it's going to take a lot of years to get us out of this

hole. what matters most is we get this on the right trajectory, get our debt containable. this just shows you, the sooner you act to fix these problems, the better off everybody is. as was mentioned before, the kinds of reforms we're proposing don't affect senior citizens, don't take benefits away from people 55 and above. and we can achieve that if we go now. what happens if we keep kickinging the can down the road, we go about $10 trillion into the hole of more empty promises every year we don't do anything. that means cuts to seniors, taxes that slow down the economy, so we want to prevent that and get it on the right glide path. the it's going to take us a long time to dig our way out, but we can dig out in a sensible way, secure way and save these entitlement programs. >> if you didn't go as far as you went in cutting taxes -- >> we do not propose increasing taxes.

here's a big difference. if you on paper raise taxes, can you move the numbers farther? sure. here's what happens. you lose jobs, economic growth. we need two things, spending cuts and reforms and economic growth. you raise taxes on the economy, you raise taxes on the american people, you don't get the growth. here's the other problem, we are in the 21st century, global economic environment. in wisconsin, we don't just compete with people from illinois and iowa, at the highest tax rate in the industrialized world. when we tax our producers, our small businesses, our economic producers more than our foreign competitors tax theirs. we lose, they win, we don't want that to happen. we need economic growth through fundamental tax reform. >> the timing comes amid this debate. is there any effort by leadership or you or others saying, look, if we can keep the government open, we'll be able

to cut trlgs. the number of freshmen here, the people who are resistant, anything less than $61 billion, could that be used to keep the government open? this is how we do this every year. >> yeah. so the question is we have a cr, a government shutdown, billions in spending cuts, does this help move us through this moment? first of all, the reason we're talking about a cr is because the government didn't pass a budget last year. they didn't pass let alone even propose a budget. that's why we're in the mess we're in right now. second point is, we're going to play by the rules. not only propose a budget, we're going to move a budget in a time line that has been prepared by the budget act. so we do want to get from talking about saving billions of dollars, which we want to save, to talking about saving trillions of dollars and getting this country on the right path.

>> i know the timing -- >> i don't know the answer -- look, we will have passed three bills now to prevent a government shutdown. we pass our first one 45 days ago. the senate hasn't passed one. if you're talking about who's aiming for a government shutdown, look at the legislative chamber, the united states senate that has not passed one bill. we don't want a government shutdown, but we don't want to rubber stamp high, big spending. >> why didn't you address that? and secondly, why do you guys agree with the administration on the defense budget? >> so let me go with the defense budget. we think bob gates is doing a good job. we think secretary gates has done a good job looking for a bunch of waste and inefficiencies. our budget reflects those policies, are flekreflects rein

$100 billion and saving $28 billion from the defense budget. i'll turn it over to my friend, the colleague from oklahoma, mr. lankford for a moment. but health care, we know where the democrats and the president want to go. we've put out specific alternatives. social security is the area in which i hope we still have room for bipartisan agreement. so what we are trying to do in this budget is advance that idea. set the table, require the president to -- the senate and the congress to submit plans so we can actually get on to the idea of saving social security on a bipartisan basis. and with that, i'll turn it over to mr. lankford. >> we're dealing with a senate and a presidency at this point saying social security's later, later, later. what we want to be able to do is

send it out and say, let's have them look at point, we've all got to come to the table with the plan. at least, step one of this, admit there's a problem. currently we've got the senate and the presidency saying there may be a problem. we can have good options on this and resolve it. but we've got to get all three groups to the table. step one for us is a very clear statement to say all of us have got to come to the table. if we're shown to be insolvent, it puts a trigger for the house, senate, and the presidents all bring a plan, we've got to start working through the plan. we've got to get together on it. >> the fundamental deal of the bargain was that democrats were going to accept changes in the entitlement program they didn't want to do. republicans were going to accept changes in the tax system they didn't want to do. and everybody was going to swallow pain for some kind of political deal. why are you basically rejecting

that, you know, that agreement that everybody is going to do something they really don't want to do. >> we have dozens of proposals here from the deficit commission. i was a member of the deficit commission. i think bowles and simpson did a great job. the reason i didn't vote for the deficit commission at the end of the day and i can speak for others, is that it didn't address the key drivers of our debt, health care. this is why we put out a plan in the debt commission to deal with medicare and medicaid. alice rivlin is a great democrat. this path to prosperity -- the reason we didn't support the debt commission is because it

didn't in my opinion deal with the drivers of our debt. the issue on taxes is this, if you tax something more, you get less of it. if you tax something less, you get more of it. we don't want to tax jobs more, investment more, small businesses and entrepreneurs more, we want them to be taxed less so we can get more of them. more jobs, more growth, so we're proposing very similar to simpson/bowles, lower the tax rates, broaden the tax base to get more growth. >> and real quickly, rivlin/ryan maintains a fee for service. >> no, it doesn't. it's different. but as we go through the specks of this, follow through details, it's a budget resolution. i think that's something we should definitely -- i think that's a good idea. carl. >> what do you say to nervous

republicans who say this is a political kamikaze mission. you've given democrats a big target that may cost republicans the majority. >> none of them say that. just kidding. you know, jonathan, look at these people. look at these new people who just got here, you know, they didn't come here for a political career. they came here for a cause. this is not a budget, this is a cause. and we are here to try to fix this country's problems. and if that means we have to go first and offer solutions, fine. we owe it to the country to have an honest debate, to have that adult conversation that's necessary. and that is our contribution to the debate.

we cannot keep going down the path of fearing what the other political party would do to us if we try to solve a problem. if we keep going down that path, then we know what that future looks like. >> is there any way any of these proposals can be enacted before the next election? >> sure, of course they are. if we try to judge our decisions based upon whether or not this can get into law, or not, then we might, as well, go home. i think a lot of these ideas can be put into law. i think we're trying to set the table for social security reform. i think there's a lot of things in here. a lot of things came from democrats. a lot of these ideas came from democrats, the fiscal commission, the general accountability office. we're trying to get as many bipartisan solutions that have bipartisan fingerprints on them. putting them together and advancing them. and we might have to have a debate or decision about the choice of two futures. the path the president has proposed, the path of higher taxes, higher debt, a diminished

country. we don't want that path. we want the path of the american idea of being alive and thriving for the next generation. >> a lot of republicans, the majority of republicans, every senate republican -- you've got $18 trillion in debt over the next decade. do you need to re-write that amendment? how is this compatible with getting rid of the deficit in five years? >> i've been a supporter of the balanced budget amendment since i came to congress in 1998. our baseline, our fiscal situation has gotten so bad, this just tells you what kind of work it needs to do to fix it. one of the components of the balanced budget amendment is a cap on government spending. we proposed that. i think the key component for freedom and economic liberty is bring the size of government down. this brings the size of government down.

so that our government is limited in scope so our economy and people can be free. this is about securing prosperity for the next generation, growing our economy now. if we would have a balanced budget amendment in law, it would probably take seven to ten years to do that. so it's pretty crazy to try and speculate what the baseline will look like at that moment. but the key here is using real numbers, we're supporting a path to getting this paid off. >> what is it you hope the administration -- is there a >> okay. the first question is, what do i hope the administration? i don't know, i hope they read it before they criticize it. that hasn't happened yet today. but i hope they take a sincere look at it. i hope the administration looks and sees, well, this idea i agree with, this idea we don't. my sincere hope is we've got to get something done in this

government. hopefully the administration will say, you know what? you republicans on a, b, and c, we agree with, x, y, and z on obamacare we don't agree with you. we'll see. hopefully that can occur. on the debt limit, we think this gives you a great menu of options and policies to pick from as a package with a debt limit. so we think we advance the conversation on going toward the debt limit. because what's the purpose of having a debt limit? stop it from going up. and let's not rubber stamp just another debt limit increase without fixing this country for our current economy and children and grandchildren. there are a lot of ideas in here on how to do that. >> you have different approaches to medicare and medicaid. in the case of social security, you talk about a process, you say this is a chance for bipartisan consensus. what's the path to getting

there? >> one of the reasons we put specific details out there on medicare is because the president already went a different direction with health care, the democrats went a different direction in health care. they believe in a government-run system. and i think history shows you that it doesn't work. and we repeal, the government rationing commission. that is a rationing agent that will basically price control medicare down, tighten the screws and will send a lot of providers out of business. on your point. you know my road map well, my road map does have vouchers. this is a different proposal. this is not a voucher system. this is a premium support system. it works like the drug benefit works for current seniors today. name me another program that came in 40% cost projections. medicare part d did, why? because it gives consumers, seniors, choice.

it has insurers competing against each other for their business. we want to harness the power of patient choice, of competition on behalf of future seniors in medicare. what we're proposing is no changes for anybody who is 55 and above. they get the medicare they've organized their retirement around, but because medicare is going insolvent and bankrupt according to the trustees, because we want to save medicare because it's a program people can rely upon, we propose to convert it to a system for younger people that is identical to the system i have as a member of congress and all federal workers enjoy. it's choice, competition, protection. we propose that we support people more for low income, more as they're sick. and doing it that way fixes the problem. saves medicare. under this bill, medicare and medicaid, spending goes up every single year. it goes up at a more sustainable rate so it's sustainable. >> it sounds like you're saying

there's no possibility of a bipartisan -- >> i think the president and the democrats have leaned forward farther on health care and they've chosen. they've done medicare law, medicaid law, health care law, which we really disagree with. and so i don't know that the specter of a compromise. something tells me when we repeal obamacare, he's probably not going to sign that bill into law. so social security's an area where i do -- i'm cautiously optimistic about progress. i do believe this is a program we can fix. we didn't quite get there. i'd like to think that was an area we can get some success on. and that's why what we put in here was to set the process for a bipartisan solution. >> what are the assumptions you're basing your projections? >> this is cbo numbers. we're using cbo's long-term score. cbo -- we don't give cbo

assumptions. they use their baseline of their score. [captions copyright national cable satellite corp. 2011] >> now reaction from democratic congressman chris van hollen. he said his party cost alternative will be on the floor next week. this briefing is 45 minutes.

>> good afternoon, everybody. i am pleased to be here. to respond toay the house republican budget. we welcome an honest, vigorous, and respectful debate about the best way to move the country for to keep our fragile recovery going, to create jobs, and to reduce the deficit. and we agree we must act now to put in place a plan to reduce our deficits in a steady, predictable, and responsible manner. the question is, how the best do that? as the bipartisan fiscal commission has indicated, any

responsible effort to tackle the deficit requires a balanced approach that addresses both spending and revenue. this house republican plan fails that very simple test. he just have to hear the comments just made today by both alice simpson and erskine bowles. i read from there's demand. : the republican plan falls short necessary to enact irresponsible plan." republican plan largely exempts defense spending and would not apply any of the savings from eliminating or reducing tax expenditures as part of tax reform through deficit reduction." as a result, that the german's plan relies on much larger

reductions in discretionary spending while calling on savings in safety net programs, cuts that would place a disproportionately adverse impact on certain disadvantaged population. so we have already had the verdict rendered by the leaders of the bipartisan commission, that the republican plan in the house fails the simple test of balance. in fact, if you look at the republican plan, it is simply a recycled, rigid ideology that says we need to provide a tax breaks to the very wealthy and a very powerful at the expense of the rest of the country. it is dressed up in a lot of nice-sounding rhetoric about four, but it is the same tired old playbook. they preserve and in fact increase tax cuts for the very

wealthiest americans. they keep in place a tax subsidy, taxpayer giveaways got to the oil and gas industries, and other special corporate interest costs, while it costuts education , research, in science, requires seniors to go into a private insurance plan and at the winds of the insurance industry with constantly luring amounts of support, all the risk goes to the seniors. the government is to choose and we believe their plan will weaken america and the long run. it is not courageous to protect the most powerful interest in the very wealthy at the expense of critical investments in our country. that is they do going forward.

i want to turn to these charts here, because it suggests they are way out of the mainstream when it comes to any responsible approach to deficit reduction. [unintelligible] you all remember david stockman, the budget director during the reagan administration. he finds it unconscionable that the the republican leadership, faced with a 1.5 trillion dollar deficit, could believe is good public policy to maintain tax cuts for the top 2%. it increases the tax breaks for the top 2%, because when you lower the top rate tonk, you'reg to be hitting middle-income tax payers to pay for the brakes at the very top. i listened earlier to the chairman of the committee, chairman ryan, when he was asked

why they continue the tax breaks andthe folks at the pretop, he said that was necessary for economic growth of. the facts tell a different story. what this shows is that tax rates for the top income earners -- during the clinton administration, a period of rapid economic growth in which 4% gdp growth, compared to what happened when you provided the first tax cuts that disproportionately benefited the folks at the very top. he felt it very strongly, only 2.1% real gdp growth during those years, even though you had the lower tax rates. the point is there are a lot of things that move the economy, and clearly that is not a

primary factor, and anyone interested in his and the deficit as opposed to another ideological agenda recognizes you have to address that part of the equation. this is a similar chart. it shows job growth during the booming years during the clinton administration, when the economy was booming. again, during the eight years of the previous administration, when you had a lower tax rate for folks on top, you actually lost 653,000 private-sector jobs. the idea that those marginal differences tried major economic decisions is just this proven by the facts. here is the difference, when you look at the fiscal commission, in terms of balance. but the rest of the fiscal commission and the house republican plan when it comes to revenues over the next 10 years, $2.50 trillion.

the commission assumed we would return to the clinton-era tax rates at the very top. when you make those significant cuts, as the representatives said, you are going to cut into important investments. they are important to keeping our economy strong. we recognize there are cuts to be made in -- and gao has identified many of them, and you hear in a minute about why it is important to maintain those investments, and then you will hear from john yarmouth about the tax cycle. i want to turn to the question of health care. there has been a lot of debate over the last many years on the health care question. every member of the budget committee, every member of the budget committee, republicans and democrats alike, understand that rising health care costs

represent a huge challenge for the federal budget, as they do for every family budget, because the reality is the health care costs in medicare and medicaid have been tracking the health care rising costs in the rest of the health care system over the last 30 years. just the last 10 years, the growth and cost of medicaid is much lower than the increase of health care costs in the private sector. so when you look at this problem you have to recognize it is the challenge to get overall health- care costs down. and that is why passing the affordable care act last year was so important, because it is designed to drive down the costs per person of health care over the long run. in fact, we heard some talk earlier today from dr. rivlin's

approach. when she talked a few weeks ago before the committee, she indicated it would be a huge mistake to repeal the affordable care act. and here is what she said. "repealing it would cause needless economic harm and would set back efforts to create a more disciplined and more effective health care system." she also said, "i believe every idea about recalling about reducing costs was incorporated in some way into the affordable care act and we need to find it here " she said, "i believe the affordable care act as the potential to --" this is a chart put together by the medicare trustees based on

their data that shows if you implement the affordable care act as it was passed, you will indeed bring down the cost of medicare over a period of time. i want to say a word about the so-called reforms in the republican proposal. and i want people to focus on this fact. you may remember that during the last campaign republican candidates ran all sorts of ads against the democrats saying that these last $500 billion out of medicare. in fact, in an op-ed written for local paper, chairman of ryan said president obama broke his promises the seniors like cutting medicare by hundreds of billions of dollars. the reality, if you look at the budget, all those medicare

reforms that we made, including ending the overpayments to medicare advantage, including other reforms, to bring down the cost of health care during the next 10-your window, it looks to us like they have kept a very savings in their medicare -- in medicare that the railed against over the last couple months and years. in fact, that is the cause of the medicare number they have in the budget. the health care reforms enacted in the affordable care act, which they say they are repealing, they are not repealing all of them. they are keeping as far as we can tell the savings in medicare, and the savings that were made with the democratic majority in congress rec rit -- represent a significant amount of the funds available in medicare over the next 10 years.

what do they do? the essentially and medicare as we know it. they do not reform it. .hey deform it they say you got to go into the private insurance market, and we will get a voucher will reduce value over time, and all the risk of increased cost in health care system will be borne by the medicare beneficiary, the seniors. even as they get rid of the mechanism they kept, that they did not -- that they got rid of, and health care reform bill, which the creation of a commission, to help recommend and reduce costs. they got rid of that, which will lead to increases costs in medicare, and they put all the rest and burden on the senior citizen under medicare.

it is a radical change, and it is extremely bad for seniors. finally, i want to say with respect to medicare, allison schwartz is got to talking about the medicare cuts. i want to turn briefly to medicaid, but simply put, turning medicaid into a block grant program is just code for cutting deeply into supports for seniors in nursing homes, seniors in an assisted living facilities, low-income kids, disabled individuals, and a most deplorable population. it is the blank check the governors with a license to cut those individuals -- cut the support for those individuals in our society. it is certainly not courageous to pick on some of the most

vulnerable in our society. finally, i will end by saying this notion, the orwellian notion that ending the medicare guarantee for seniors and block- granting medicare that will help hurt individuals in nursing homes and other settings, to suggest that that is done to save medicare is a little reminiscent of that twisted saying that you have to this juror the bill in order to save it. this will do terrible damage to medicare and medicaid and everybody who has paid into the medicare system and relies on the system for their supports, and all of us know it was not that long ago that republican members of congress surely

thought the establishment of medicare, the establishment of social security, and certainly we are not going to stand by while they undermine the fundamental integrity's of those important supports for seniors and others in our society, which all of those seniors had paid into that system. with that, i'm going to turn it over to congressman john yarmouth, a great member of the committee from kentucky, who is got to talk about the republican approach to tax cuts for the wealthy. >> thank you very much, crossbhris. i ran for congress in times during difficult circumstances for americans, and fighting two wars, and the notion we should cut taxes for the wealthy was

offensive and demonstrated the wrong values, and that was at a time when the social safety net was much better than it will be under the republican budget. mr. ryan calls this budget the path to prosperity. it is actually a payback for the prosperous. this is a budget that asks virtually all americans to suffer, to take a little pain, but it has nothing -- it asks nothing of the wealthiest americans, the ones who have experienced the greatest in come and wealth in the last 10 years, at least in the last 90 years. what we have seen here under the ryan budget is a proposal that over the next eight years will reduce taxes for the wealthiest 2% of americans, by $870 billion, at the same time as crist mentioned and others will, cutting medicaid by $1

trillion, cutting education funding, cutting research and development, cutting support programs for low-income seniors and people with low-income families with children, all of the things that reflect well on how -- and our values as a nation. they do not ask the wealthiest pay a penny. they maintain all of the tax breaks for the oil companies in spite of the fact that they have made $900 billion in profit over the last decade. they have maintained all the tax breaks, all the tax expenditures, which amount to one trillion -- $1 trillion a year, expenditures which if they were actually recorded on the budget as government programs, republicans would -- about, and there are -- as expenditures alone amount of all of the

discretionary spending in the budget, including defense. they do not touch any of this. this is the most imbalanced, reckless budget that has been offered in modern history. it exacts a high price on virtually all americans accept the very wealthiest. this is $800 billion versus 707 $1 billion cut in medicaid. these are the wealthy. those are the people who need care and need aid. i want to say one thing about this notion that you can -- you need to cut taxes to generate economic prosperity. my brother was in the barbecue restaurant business. he does very, very well. i am an investor and that business. we would be impacted to return to the pre-bush tax counsel.

my brother said i'm going to support barack obama this year even though i was always republican and always wanted to pay less tax. he said i finally realized if nobody can afford a barbecue, it does not matter what my tax rate is. this is a statement about where we are as a country. does not matter what these tax rates are for anybody if there is no business. business people recognize that. we had a meeting yesterday, white house business council roundtable, all business people in the room. sponsored by the chamber of commerce. everybody in that room was asking for more government support for education, for things like child care, research and development, and i thought i was in a progressive caucus meeting, and these were business people. they did not mention tax rates on the wealthiest people in the country. they need -- they know we need to make the investment in human capital.

this budget does not do that. it imposes great pain on the people who can least the stand it and gives great benefit to the people who do not need it. >> thank you, john. next we are going to hear from a new member of the committee, who is got to talk about keeping investments to keep the country strong. >> thank you. i am impressed with the work of my colleagues in the democratic ranks have done in the last several weeks to bring some balance to the equation. i firmly believe that america needs and deserves a plan that creates jobs, not cost jobs. and that plan for america and her work -- and for working families requires that it be written with courage, not

cowardice. i see this plan as a clarion wake-up call. working families across the country should have the sound alarm at home, bair belair. this is an attack on middle- class families, working class families. it is an attack on programs that respond to growing jobs. undeniably, the message that we have all heard, from the republicans in alaskan town, jobs, jobs, jobs, professed by all candidates. where is the jobs package? i am not surprised that this reduces jobs because in the last three months of the 112th session, we have seen no jobs legislation by the majority. the team continues. they want to disrupt the steady upward moving forward that has

produced 1.8 million jobs since the start of 2010. private sector jobs, absolutely an incredible comeback from the painful, very long and painful recession that drank our economy of 8.2 million jobs. look at the steady, precipitous decline of american jobs. and then the turning point that comes early in 2009. as we begin to climb upward. why would we want to disrupt, disrupt that steady progress? this is -- i've heard of vood jeff: economics. -- voodoo economics. this makes voodoo economics look pale. ness an attack that reduces jobs at a time that we need to invest in jobs. and we seem to defund with this plan.

to be competitive. this dulls our competitiveness. it attacks our middle class. and it does not provide the investments that we need for a stronger economy. now, the economics we see on this bar graph, the assessment they have done on this plan and whether you buy the 200,000 or 975,000, everyone is suggesting that it's going to drain jobs. this is creating the slippery slope. while we climb the mountain to get to $1.8 million the slippery slope that enables us now with their plan to lose jobs. which is certainly the wrong direction to follow. how do we do that? well, they suggest that we drain $29 billion from education and training. $29 billion. they suggest $276 billion be removed for the sake of transportation over a 10-year

period. and then with science, and tech, a $50 billion reduction over 10 years. now, be mindful as we engage in this global race on clean energy and innovation, i agree with the president when he says whoever wins this race emerges the go-to nation. you will be the exporter of energy, intellect, innovation, and clean energy ideas. why would we want to put that at risk? we have just received the news recently that we have dropped a third in private sector investment for energy transformation after, after china and germany. the america i know and love is number one. and that's what this democratic minority in the house is about. keeping america number one. this is a slash on jobs. it will impact our economy tremendously. because it has been stated so many times by economists, the jobs issue, unemployment, is

driving the deficit. if we invest in job creation and job retention, we can very much expect an impact on reducing that deficit. i think the road map here, the ryan road map, is the way to the cliff. and then over the cliff. it will wreck our economic comeback. it will destroy the hope that we want to provide, should provide for america's working families. it devastates the work force of the future by impacting on education funding and denies r&d, research and development, at a time that's most critical. think of it. we won the global race on spas because we commetted with passionate resolve to make a difference and we landed that person first on the moon. simply because we committed our resources, our energy, and our passions to making it happen. look at what we're doing here. we're challenged to enter a global race on clean energy and innovation and our response from the ryan road map, from the republican majority in the house, defund.

disinvest. don't worry about the r&d. don't worry about making it in america. invest in manufacturing, no such way. this is a dreadful outcome. it required courage. we got cowardice. as we go forward we need to fix this plan. a clarion wake-up call for america and her workers. let's denounce this plan from the republican majority. >> thank you, paul. next we're going to hear from karen bass who i said earlier is one of our new members who comes to us from state politics in california and knows very clearly the impact of the republican medicaid proposals as well as others. >> thank you. just like the road map to america's future, the republican path to prosperity is a pathway to despair. the republicans are concerned about kicking the can down the road. but they have no problem kicking seniors and children to the curb.

the 60-page document that we received today is an ideological statement that ironically captures democratic language and gives lib service to democratic values while covering up a radical agenda that would dramatically alter the quality of life for many working families. the america they paint with their budget prom is a country we wouldn't recognize. really look -- i really look forward to the details of the republican plan. what we need is a balanced approach that speaker after speaker at the budget committee said we must to address the deficit through a balanced approach. in their proposal, they propose no revenue. they only propose cuts and schemes. giving lip service to democratic values and language, i want to give a couple of examples. they talk about ending corporate welfare. he thought that was pretty ironic and their couple of examples for how they want to end corporate welfare is to revisit the financial reform regulation. they want to praoistize fannie

and fredi. and they want to lift more torms on oil drilling. this is the way you end corporate welfare. they want to protect the safety net by massively cutting medicaid and having vouchers for medicare. it's not enough to say that if you're over 55 you're protected. thank you. i know that i'm protected now. but the concern is about the future. but yet the republicans would leave future generations without the resources for health care which ultimately on medicaid would result in a 35% cut. over half the users of medicaid are children. seniors use medicaid to pay for expenses that medicare doesn't cover. that's why i said the republicans are willing to kick seniors and children to the curb while expressing concern for keking the can down the road. many governors have already weighed in on this proposal. and are objecting to the way they're talking about reforming medicaid. states should not be left to

decide which populations are services to cover. under the guise of having flexibility for the states, if you look at it down the line, it really just resorts -- results in a cut. a significant cut to medicaid. i do have to hand it to my republican colleagues. because maybe the way they attempt to capture our language and give lip service to our values, i think we should spend some time explaining what those terms mean. corporate welfare, concern about the safety net, is very transparent to think that you can use language to hide a very radical agenda and trick people into believing that the pathway to process tarot is not a pathway to despair. the way that they are talking about medicare and medicaid, forces seniors out of the system and into private insurance. and leaves children and disabled without the safety net. thank you very much.

>> thank you, karen. next we're going to hear from one. veteran members of the committee who knows all these issues very well. our colleague, allison schwartz. >> thank you. and i just want to i guess do a little bit of cleanup here. i want to speak specifically to seniors. before i do i want to share my -- associate myself with my colleagues' comments that budgets are about values and about our priorities. and to me, and i have served on the budget committee for three terms now and my fourth term on the budget committee. and i have seen each year as we deal with the budget and the fact that the budget should be about three things. they are about meeting our obligations, as a nation, it is about being fiscally responsible, and that's particularly important as we have the challenge of the deficit before us. and it's about growing the economy and preparing for the future. and this budget fails all three. i'm going to speak specifically about the fact that this budget really puts seniors, american seniors, at great risk.

they have as you may remember, that the republicans railed against the health reform law, that's now the law of the land. and yet they scared seniors into believing that they -- there would be cuts to their benefits. there were no cuts to their benefits and there were enhancements to their benefits and ail speak to that in a moment. but this is a budget and what they're planning to do on medicare and medicaid should scare every senior in this country. and every american who someday they hope will be a senior. so within 10 years, we will not recognize medicare or medicaid. seniors will essentially be on their own. to find health insurance in an individual private marketplace that has failed most americans in this country. so this budget, as they have put forward, and seniors know this, understand that they are praoistizing medicare.

69% of seniors oppose privatization. the republicans are not listening. seniors know that dismantling medicare and replacing it with a voucher program means that they no longer will have access to a guaranteed set of health benefits. there will be no guaranteed health benefits under medicare. they know that the value of a limited voucher, one that's capped, will not enable them to meet the rising costs of health care. they will know that they will have to pay more out-of-pocket and more in premiums. unfortunately, the republicans are proud of this. and they are telling their seniors that they are -- they will be on their own to deal with the insurance industry. that they will be on their own to deal with limits on benefits. they will be on their own on uncertainty of an illness occurs or if they need long-term care. that they may well be -- there may be seclusions for certain kinds of care. specialists or primary care or settings when you can get care. that there could be discrimination based on income

and levels of illness and age. and i want to throw in medicaid. which is going to be block granted to states. understand that 62% of medicaid expenses are for long-term care for seniors. so we want to talk about women and children. i'm happy to do that. but for seniors, this is devastating. any american who has a loved one in a nursing home could well have to pay that out-of-pocket in the future. because medicaid won't be there for them. and have to bring them home to care for them. so this is -- this same time that they're doing this for seniors, the -- there's no question that they are protecting -- you've heard some of this already -- they are spending the same amount of money if not more to protect tax cuts for the wealthiest 2% of americans. that's $700 billion. they're protecting tax cuts for the oil industry. and they're continuing about guaranteeing not to deal with the issues of inefficiencies in

the pentagon. there are all of us, and this was said before, all of us on the committee, republicans and democrats, believe very, very strongly that we have to deal with this deficit. and we should. but the way we do it matters. do we do it on the backs of seniors? or do we do it in a way that shares it across the spectrum and tackling not only spending cuts but tax expenditures and costs in other arenas? and that is -- that is really the debate we're having here. and again, republicans chose last session to ignore the cost savings and strengthening of medicare for our seniors. they sit back and in fact demonize the plan voting time and i'm again to end -- to stop improvements of mccrery for our seniors. -- of medicare for power seniors. and repeal the law that limits co-pamentse for preventative services for seniors and makes prescription drugs more

affordable for our seniors and improves coordination of care and reduces errors and improves patient car and outcomes for power seniors. they want to repeal the law that curbs the growth and -- of medicare spending. and extends the fiscal life of medicare trust fund by 12 years. and it saves taxpayers $400 billion by ending overpayments to insurance companies. that's what they want to stop. instead, republicans here in washington want to end medicare as we know it for seniors. and again, i will end with where i started. if seniors were scared last year falsely by the republicans, this year, the republicans are right to say to american seniors that you have every right to be scared. because you will be on your own. you're going to get a voucher that's limited. that won't grow. and you're going to have to negotiate with the insurance companies on your own. you tell that to my 91-year-old father who's right now in -- trying to get off a vent lator. how is he going to negotiate when his medicare benefits are

up? to be able to find the private health insurance that he needs? he simply won't be able to do it. it's going to fall on all of us. ness a decision we have to make. this is a question of our priorities. are we willing to say we are going to balance the budget and actually our ranking member said it doesn't even do a very good job of that. are we going to take money away from seniors? and wheel we end medicare as we know it and medicaid as we know it and protect the wealthiest 2% of americans and corporate america? that's our decision. instead, we ought to get serious and meet our obligations to our seniors and our children and to our future and we can do that. and we should. we're not going to do it with the reinbudget. thank you. -- with the ryan budget. thank you. >> thank you, allison. happy to answer any questions you have. >> in the reinbudget, is there anything you can work with or do you have your on plan that you guys are putting forward or let's raise taxes on the top

2%? >> two things. obviously we've seen the major pieces of the republican budget here in the house. we haven't had a chance to dig down so far it's very hard to find something that meets the objectives that we've talked about. which is having a balanced approach to a deficit reduction. yes, the democratic caucus will have an alternative. and the alternative will reduce the deficits in a serious and predictable and steady way. and it will demonstrate a very different approach going forward. yeah. >> mr. van holen, the ryan budget is already being cast as the platform for republicans' economic argument in 2012 including for their eventual nominee against president obama. can you speak to the political significance of this document and how you think it can play next year? >> it's going to be up to every republican candidate for president to decide whether

they want to run with this particular republican plan or not. i would just suggest that they're going to want to take a very careful look at it. because in addition to slashing very important investments that are necessary for our economic growth, and the strength of the country, it also essentially undercuts entirely the bargain that we've made with seniors as we've discussed. and what it does is as that we're going to end the medicare guarantee, throw seniors over to the winds of the private insurance market, and we've already seen rates rising in the private insurance market and you the senior are going to bear the entire risk of that added cost. so it's a budget that as we said has just totally skewed a misplaced priority that benefits the very wealthy and powerful special interests at the expense of important

investments. and at the expense of seniors. >> if i could just walk back a moment. you said earlier in your comments that to govern is to choose. and republicans have said repeatedly that democrats didn't pass a budget when you were governing. and the reason they have to do all this cutting spending is because you put them there in the first place. >> well, two things. first of all, when you talk about the fiscal year 2011 budget, which is the debate going on right now over a very small portion of the budget, the fact is that the democrats did pass last year a budget enforcement resolution that set out the targets very clearly as to what should govern this year. in fact, when you hear the debate, that republicans are making about how we have to make changes to that, that's because there was the other

alternative out there. today, what we're talking about is really where the discussion should move to, which is taking a look at the federal budget as a whole. and part of the issue with the debate going on about 2011 is republicans only want to talk about specific cuts to a particular part of the budget. they don't want to talk about cuts that would involve taking the subsidies away from the oil industry. they don't want to take away loopholes in the tax code that benefit corporations and result in having many major corporations pay absolutely no income tax to share in making sure that the country is strong. so look, that is the -- that's going to be the debate going forward. we're talking about both fiscal year 2011 and 2012. >> so that's an old argument then? >> i'm sorry? >> that's an old argument? >> a totally old argument and ignores the fact that we did have the one-year blueprint

there, yeah. >> can you give us a time line on when you plan to unveil your own budget alternative? will it be ready for next week when the committee looks to mark up mr. ryan's plan? >> we're marking up the republican plan tomorrow. certainly the democratic alternative will be ready for floor debate a week from tomorrow. yeah. >> on medicare, chairman ryan is saying his plan is not necessarily a voucher program because the government would be negotiating with insurers and seniors have the option comparing it to the plans that members of congress have. but it sounds like you aren't seeing it that way. >> not at all. and whether you want to call it a voucher or whether he wants to call it a premium support program, it all comes down to the same thing the way he has it designed. which says that number one, seniors no longer will have the option of being in the medicare program that they're in today, the fee for service medicare program. they will be required to go into the private insurance market, number one.

number two, the value of the voucher or premium support, whatever you want to call it, does not rise at the rate of health care inflation. and what the republican budget does is says to seniors, you're on your own. you got to pick up the entire cost of that instead of the approach we've taken which is in order to reduce costs in the health care stem touch treat the whole health care system and get rid of the inefficiencies where so many americans were getting their primary health care at the hospitals, driving up costs for that. which is why dr. rivlin has said number one, make sure you don't dismantle that because it does help bend the medicare cost curve. but in short, what they do as i said is shift the entire risk to higher -- to seniors just a word on the federal employee health benefit plan. and the other analogies. under that plan, the employees

get a fixed share of the cost. in other words, the employer, in that case the federal government, shares the risks of rising health care costs. under the republican plan, that's not the case. the burden of the rising costs is on the senior. you're on your own. >> and some of this, the details obviously have yet to be worked out. and when you hear whether a voucher or premium support, that suggests that there will be a gap, right? and also, they also want to make it means tested. so where that break is could matter a lot. if you're saying ok, etc. seniors above $20,000 income. and are we only going to give -- going to get less and less support from the federal government at the higher you go above $20,000 income. that's a low threshold. we've heard some of those numbers. so it could well leave literally tens of thousands and millions of seniors at great

risk for bearing the greater burden of both out-of-pocket costs and premium support. or buying insurance that really does not cover their health care needs. and that -- a group like this, all seniors, i always joke, my senior groups and say any of you on medication? and they all laugh. and any of you on two medications, three medications? and even healthy seniors actually are pretty costly to take care of. we've discovered that in government. that's why we've instituted a whole variety of innovations to improve quality and improve outcome. but we're doing that by asking the payers and the providers, hospitals and doctors, nursing homes, to do a better job, spend less money, make sure that people are getting the health care they need. not putting it on the backs of seniors. thank you. >> and it also will mean that you don't get to pick your doctor unless the doctor happens to be on the plan that you can afford. it rations health care this time by the income of the

senior. because you're only going to be able to purchase what benefits are offered. for that price. you don't get your doctor, you don't get those benefits. >> we can take one more or two more and then we got to go. one and two. ok. >> the white house didn't address, the proposal, and are you going to do that or fall back on health care reform bill as your statement on it? >> let me say something. the republican bill, i want to make this very clear. i want to make this very clear. in the next 10 years, the revenue they get from so-called medicare reform is the -- are the savings that were generated as a result of the passage of the affordable care act. i want to be very clear about that. they demagogued those medicare reforms. they said we were just slashing medicare when enact we were

removing the subsidies for medicare advantage plans, the overpayments. they were getting reimbursed with taxpayer dollars at 114% of fee for service. that is the primary sort of -- they've taken those savings, the same ones that they criticized, in their plan. so -- do we end the medicare guarantee for seniors? absolutely not. we got one more. >> one of the things mr. ryan said in his presser was he was hoping that maybe on the social security portion of this bill that we can come to an agreement with the democrats. do you see anything like that with the social security language you've seen? >> well, we haven't seen exactly what they do with respect to social security. we'll have an opportunity to do that. our view is that you should not balance the budgets on the back of social security. that social security can pay 100% of the benefits up to the year 2037.

after that, if you do nothing at all, those benefits will drop. so i believe that we should, apart from this particular budget negotiations, and the deficit reduction, apart from that, we should get together on a bipartisan basis like tip o'neill did and with ronald reagan, and try and address that issue. but again, we shouldn't be balancing budgets or reducing deficits by cutting social security. >> will you vote on the short-term -- will you vote if it pops up? you won't shut the government down? >> have to tie a look at it. -- to take a look at it.

>> the house budget committee will begin work on the republicans' 2012 budget plan tomorrow. committee members will debate and offer amendments to chairman ryan's budget propose. live coverage at 10:30 a.m. eastern time on c-span3. now, we'll hear from president obama on 2011 federal spending negotiations. the current short-term government funding measure will expire on friday. the president spoke to reporters for 20 minutes. after a meeting with congressional leaders. >> as many of you know this morning i had a meeting with speaker boehner. leader reid as well as the two appropriations chairs in illinois -- and to discuss the situation with last year's budget and i wanted to give you and more importantly the american people an update on where we are.

my goal has been to cut domestic spending but make investments in education, infrastructure, innovation, the things that are going to help us win the future. and over the course of the last several months we have identified areas where we can make substantial cuts. in fact, what we've been able to do is to present to the house republicans a budget framework that would cut the same amount of spending as speaker boehner and chairman rogers originally proposed. their original proposal for how much would be cut. and several weeks ago, there were discussions, between the white house and speaker boehner's office, in which we said let's start negotiating off of that number. $73 billion.

we are now closer than we have ever been to getting an agreement. there's no reason why we should not get an agreement. as i said before we have now matched the number that the speaker originally sought. the only question is whether politics or ideology are going to get in the way of preventing a government shutdown. what does this mean for the american people? when the economy is beginning to grow and we're seeing a pickup in employment, last thing we need is a disruption that's caused by a government shutdown. not to mention the people who depend on government services, whether a veteran or somebody getting a passport, the national monuments or a business leader who is trying to get a small business loan.

you don't want delays, you don't want disruptions just because of usual politics in washington. so what i said to the speaker today and what i said to leader reid and what i said to the two appropriation chairs is myself, joe biden, my team, we are prepared to meet for as long as possible to get this resolved. my understanding is there is going to be a meeting between speaker boehner and harry reid this afternoon at 4:00. the speaker apparently didn't want our team involved in that discussion. that's fine. if they can sort it out, then we got more than enough to do. if they can't sort it out, then want them back here tomorrow. but it would be inexcusable for us to not be able to take care of last year's business, keep in mind we're dealing with a

budget that could have gotten done three months ago, could have gotten done two months ago and could have gotten down last month. when we are this close simply because of politics. and we are prepared to put whatever resources are required in terms of time and energy to get this done, but that's what the american people expect. they don't like these games. and we don't have time for them. there's some things that we can't control. we can't control earthquakes. we can't control tsunamis. we can't control uprisings on the other side of the world. and what we can control is our capacity to have a reasoned, fair conversation between the parties and get the business of the american people done. and that's what i expect. so again, i want to reiterate. my understanding is the speaker and the leader reid are going to have a meeting at 4:00. if that issue does not get resolved, and we don't start seeing progress, i want a

meeting again tomorrow. here at the white house. i will invite the same folks that we invited today. and if that doesn't work, we'll invite them again the day after that. and i will have -- my entire team available to work through the details of getting a deal done. but right now, there's no reason why we should not get this done. and we've got more than enough to do. than to be spending our time going back and forth quibbling around the edges on something this important to the american people. with that i'm going to take a couple questions. >> thank you, mr. president. if it came down to it, would you approve of a short-term spending bill to avoid a government shutdown? and more broadly, the american people are watching this, do you think that this is a test of your leadership? do you think the american people are expecting you to make sure that this deal happens?

>> let me take each question separately. on the issue of a short-term extension, we've already done that twice. we did it once for two weeks. then we did another one for three weeks. that is not a way to run a government. i can't have our agencies making plans based on two-week budgets. i can't have the defense department, i can't have the state department, i can't have our various agencies on food safety and making sure our water's clean and making sure that our airports are functioning, i can't have them making decisions based on two-week at a time budgets. so i've been very clear that the last time we had an extension, it was to give the parties time to go ahead and get something done. we are now at the point where there's no excuse to extend this further. if over the next 24 to 48 hours a deal is done, and we just

can't get the paperwork through congress quick enough and they want to do a clean extension for two or three days, in order to go ahead and complete a deal, then that's something that we could support. but what we're not going to do is to once again put off something that should have gotten done several months ago. now, with respect to the second question, i think what the american people expect for me is the same thing that they expect from every member of congress. and that is that we're looking out for the interests of the american people. and not trying to score political points. what they're looking for me is the same thing they're hoog from speaker boehner and -- they're looking from speaker boehner and leader reid to act like grownups and when everybody compromises a little

bit in order to do the people's business. and i just want to set the context for this now. i'm going to repeat. speaker boehner, chairman rogers, the republican appropriations chairman, their original budget proposed $73 billion in cuts. we have now agreed to $73 billion worth of cuts. what they are now saying is, well, we're not sure that every single one. cuts that you've made are ones that we agree to. we would rather have these cuts rather than that cut. that's not the basis for shutting down the government. we should be able to come up with a compromise in which nobody gets 100% of what they want, but the american people get the piece of mind of knowing that folks here in washington are actually thinking about them. because they're going through a whole lot of struggles right now. they're worrying about gas

prices. and that's what they want us worrying about. they're worrying about jobs. and that's what we should be focused on. they're worrying about what everything that happening in the middle east, what does that mean for them? and that's certainly what i'm spending my time worrying about. and i shouldn't have to oversee a process in which congress deals with last year's budget where we only have six months left. especially when both parties have agreed that we need to make substantial cuts and we're more or less at the same number. >> thank you, mr. president. who should the american people blame if there is a government shutdown? and also i was wondering if you could respond to the budget plan that the house republicans unveiled today. >> i don't think the american people are interested in blaming somebody. they want people to fix problems and offer solutions. they're not interested in

finger pointing and neither am i. what i want to do is get the business of the american people done. now, we'll have time to have a long discussion about next year's budget as well as the long-term debt and deficit issues. where we're going to have some very tough negotiations. and they're going to be very sharply contrasting visions in where we should move the country. that's a legitimate debate to have. by the way, part of the reason that debate is going to be important is because that's where 88% of the budget is. what we're spending weeks and weeks and weeks arguing about is actually nolan 12% of the budget. and is not going to significantly dent the deficit or the debt. so i'm looking forward to having that conversation. but right now, we've got some business in front of us that needs to be done. and that is making sure that we are cutting spending in a

significant way. but we're doing it with a scalpel instead of a machete toy make sure we can make investments in education, and we can still make investments in infrastructure and we can still make investments that put the american people back to work. and build our economy for the long term. >> mr. president, thank you. what else does the white house have to offer to make sure that a deal happens by friday? and separately, could you tell us a little bit about your meeting -- >> look, we've got -- we are happy to listen to any additional reasonable proposals. but i want to repeat what i just said. we are now at the figure that was speaker boehner's original proposal. now, speaker boehner originally called for $73 billion worth of cuts. members of his caucus insisted on making it $100 billion. what we've said is we're willing to go to $73 billion.

the composition of those cuts, where they come from, those are all appropriate subjects of negotiation. but by any standard, these would be reasonable cuts. in fact, if we made these cuts, they would be in absolute terms the largest cuts in domestic discretionary spending in history. and in relative terms, they would be the largest cuts as a percentage of g.d.p. since 1982. so i don't think anybody is suggesting somehow that we haven't been serious about this process. as i said, there can be some negotiations about composition. what we can't be doing is using last year's budget process to have arguments about abortion, to have arguments about the environmental protection agency, to try to use this budget negotiation as a vehicle for every ideological or

political difference between the two parties. that's what the legislature is for is to have those arguments. but not stuff it all into one budget bill. and look, i think the american people recognize that we're in some pretty unsettled times right now. certainly businesses recognize that. families recognize that. we don't have time for games. we don't have time for trying to score political points or maneuvering or positioning. not on this. as i said, when it comes to long-term debt and deficit, there's going to be a real debate about how do we make sure that we have a social safety net for the american people, when folks have a tough time, how do we make sure that we're investing in the future.

and how do we pay for it? and that is a legitimate debate to have. but right now, what we're talking about is six months remaining on the 2011 budget. we have already hit a figure that by any standard would be historic in terms of cuts. and what we can't do is have a my way or the highway approach to this problem. we can't have a my way or the highway approach to this problem. because if we start applying that approach, where i've got to get 110% of everything i want, or else i'm going to shut down the government, we're not going to get anything done this year. and the american people are going to be the ones that suffer. most of the members of congress, they got enough of a cushion that they can probably have put up with a government shutdown. but there are a lot of people out there who can't. if you're a small business right now and you're counting on a small business loan that

may make a difference as to whether or not you can keep that business going, and you find out that you can't process it for three or four weeks, or five weeks or six weeks, because of some bickering in washington, what does that say about our priorities? it doesn't make sense. i'm going to take -- one last question. >> anything about your -- >> president perez i think is an extraordinary statesman. we had an extensive discussion about what's happened in the middle east. i think he and i both share a belief that this is both a challenge and an opportunity. that with the winds of change blowing through the arab world, it's more urgent than ever that we try to seize the opportunity to create a peaceful solution between the palestinians and the israelis and he had some very interesting ideas around

those issues. he also recognizes the fact that in a country like egypt, not only do we need to be nurturing democracy, but we also have to make sure that economic opportunities are growing there. and so we explored some ideas about how we can provide some help and make sure that young people there see a brighter future. and that's something that secretary clinton during her trip in egypt spoke extensively about and will probably be rolling out some additional plans on that front. last question. >> mr. boehner said it's not just the specifics of what you guys want to cut and not cut but that your cuts, the ones you have put on the table are smoke and mirrors. how do you answer that? >> here's -- i'll let jay or jack or others get into all the details. but here's -- here's a thumbnail of what's happened. the vast majority of the cuts that have been put forward just

as was true in the republican budget are direct cuts out of domestic discretionary spending. there are some cuts that are -- that we've proposed that have to do with mandatory spending. these are real cuts. for example, pell grants. what we've said is instead of being able to finance year-around pell grants so that you can get a pell grant for summer school as well, we're going to have to cut that out. it's a little too expensive. and we want to make sure that we preserve the levels for those young people or not so young people who are going to school full-time during the year. and the way they are categorized means that those are called mandatory spending cuts as opposed to discretionary spending cuts. but they're still cuts. they're reducing the size of government. they're still getting rid of those things that we don't need in order to pay for the things that we do need.

and i think that if you ask the budget analysts out there, independent budget analysts including the c.b.o., about the composition of what we've proposed versus what was in house bill -- the house bill that passed a while back, h.r. 1, you know, that this is consistent with those basic principles. so this notion that somehow we're offering smoke and mirrors, try to tell that to the democrats out there. because part of what we've done is we've been willing to cut programs that we care deeply about. that are really important. but we recognize that given the fiscal situation that we're in, everybody's got to make some sacrifices. everybody's got to take a haircut. and we've been willing to do that. but what we're not willing to do is to go out there and say we're going to cut another 60,000 head start slots. we're not going to be willing

to go out there and say that we're going to cut medical research. we're not going to cut those things that we think are absolutely vital to the growth of the american economy and putting people back to work. and that means we've got to make some choices. and that is not just true for us. that's true for the republicans as well. nobody gets 100% of what they want. and we have more than met the republicans hatchway at this point. -- halfway at this point. ok? thank you very much, everybody. >> now house speaker john boehner on 2011 federal spending negotiations. >> we had a good discussion at

the white house earlier today. there was no agreement reached and so those conversations will continue. we've made clear that we're fighting for the largest spending cuts possible and we're talking about real spending cuts here. no smoke and mirrors. we've also made clear that there was never an agreement of $33 billion. that we're going to continue to fight for -- again, the largest cuts possible. and we're not going to allow the senate, nor the white house, to put us in a box where we have to make a choice between two bad options. cutting the bad deal this week in order to keep the government open or allow the government to shut down due to senate inaction. and so yesterday, we did introduce a bill that would keep the government open. it has $12 billion worth of

reductions in it. that remains an option for us if we would like. i said many times throughout this process that we're trying to cut spending so that we can create a better environment for job creators to create jobs in america. this is an important step that we face today in order to get real cuts. the white house is proposing cuts that are far beyond things that we would imagine. and so we want to get an agreement. and we want to keep the government open. and with that, i would be happy to answer a couple of questions. >> mr. boehner, you said you don't want to be put in a box with a bad deal or a government shutdown. the white house, $12 billion, a nonstarter, the american people watching receipt now, what's a fair deal for john boehner and

the republicans? what's a fair deal? what constitutes a fair deal? >> we want the largest spending cuts that are possible. and we're going to continue to fight for those. >> mr. boehner, if not $33 billion, what number, and you said -- >> i'll do my negotiating with the senate and the white house. >> mr. speaker -- >> a short-term deal for the weekend --, and beyond this $12 billion -- >> listen, our goal is to keep the government open. you've heard me say for the last three months that we have no interest in the government shutting down. but we are interested in cutting spending here in washington, d.c. we don't have a revenue problem. we have a spending problem. and we believe that cutting spending will in fact help us create jobs in america. >> are the cuts that are something -- >> we will continue to assess where we are in the next few

hours and the next few days. >> coming back tomorrow and the next day and the next day until you get it hammered out -- >> the conversations will continue. we will continue to insist that the policy riders passed in h.r. 1 are on the table. it's just as important to many of our members as the spending cuts themselves. one more question. >> the white house, did the democrats by any sort of proposals to the table, did president obama bring any proposals to the table today when you discussed -- >> they would like to insist that $33 billion is the top number and want to use smoke and mirrors in order to get there. that is not acceptable to our members. and we will not agree to it. and we did not agree to it. we're going to continue to fight for the largest cuts possible and including the policy riders that we passed in h.r. 1. thank you all.

>> how do you get to the $33 billion? >> senate minority leader mitch mcconnell and other members of the g.o.p. leadership discussed the ongoing negotiations over 2011 federal spending. as well as the 2012 budget plan released by house republicans. senator mcconnell spoke to reporters for almost 10 minutes. >> well, good afternoon, everyone. i've had two observations. number one, the 1099 proposal passed overwhelmingly. it's the first repeal of a part of the health care law. i think that's an important step in the right direction is a lot more that needs to be done but senator johan deserves

credit to shepherd it through to completion. with regard to the new budget in the house that congressman paul ryan has rolled out, i'm going to call on jeff sessions, our ranking member of the budget committee, to talk about that. i would just say this. i think that it gotten a very, very good review and a whole variety of different ways from columnists, editorial writers, and others, a credible proposal to deal with the debt crisis that's coming rapidly our way. with regard to funding this year's budget, the house will be sending over we believe on wednesday a proposal that would pass the defense appropriations bill for the balance of the year. reduce spending $12 billion. we think it's a credible, sensible proposal. and i hope the senate will take it up rapidly and pass it before friday. with that, let me turn to

senator sessions. >> thank you. thank you, mitch. the president's debt commission chairman, erskine bowles, and alan simpson, gave a written statement to the budget committee a week or so ago in which they said this nation faces a most predictable economic crisis in its history. so where are we? the budget act requires three budgets to be submitted. it's at this point in history, i say, that finances, budget, and debt are the greatest issues before our country. and they dwarf anything else that we're doing. so the -- the budget act requires the president to submit a budget. he is to submit a -- has submit add budget that raises taxes -- submitted a budget that raises taxes by $1.5 billion and increases discretionary spending every single year for the next 10 years, that

increases debt every year, doubling the debt, causing the interest on our debt to go from $200 billion last year to $940 billion according to the congressional budget office. that will crowd out spending for things like highways, which is $40 billion, education, $70 billion, we're going to $940 billion in interest? this is why we're on an unsustainable path is every witness has said. every witness has told us that. so what do we have? we have the president's irresponsible budget, the most irresponsible budget under the circumstances i think this nation has ever seen. we have the house presenting i think the most responsible, honest, long-term, tough, realistic budget we have probably ever seen since i've been in the senate. this is serious business they've done.

this is not gimmicks. they've honestly dealt with the most fundamental financial issues we have. so what's left? the united states senate. i believe my chairman, senator conrad, would be willing to move forward with a realistic budgetment but it seems to me that majority leader reid and the president are not onboard. and we are already past the budget schedule. we're supposed to have voted on a budget in the senate by april 15. we're behind in every step of the way. and i have not been notified from chairman conrad that there is any plan to have a democratic budget presented or any plan for a markup. so the real question is where will the senate democrats be? will they be with the president's budget? that's unacceptable? you remember erskine bowles

said he was nowhere near what we need to be doing to avoid our fiscal nightmare, that budget that the president permitted -- submitted. so that's where we are. and i'm hopeful because i know a number of my democrat colleagues in the senate believe that we do need to do more and we need to get this country on the right path who are worried about our future. so we're all watching with great interest what's going to happen. >> i would just like to compliment john boehner and paul ryan, the chairman of the budget committee, for being adults in this fiscal crisis that jeff sessions has just touched on. there has been an indication that people at the white house and democratic leadership are willing to let the government shut down. calling to mind the statement that howard dean made 10 days

or so ago. but john boehner has worked very hard to avoid that and at the same time, to fund the military for the remainder of this year and continue the houseas efforts to achieve significant savings by offering as the leader said this continuing resolution that could be adopted by the end of this week. and i hope that the people of the white house and democratic leadership will pick up this idea of acting responsibly and join speaker boehner in this effort. as i said, it seems to me that we should recognize that the two people who are working hardest here to do the most important work on the house side are the chairman of the budget committee and the speaker of the house. the house republicans are sending to the senate a proposal to keep the government operating while we get busy doing our work on the most important issue facing us which

is to reduce the long-term debt. and on the question of long-term debt, most of the important players are on the field. the bipartisan debt commission has made a recommendation for $4 trillion. paul ryan has made a recommendation of how to deal with the long-term debt. we have 64 senators, 32 from each party, who say we're ready to go to work. mr. president, with you, on the long-term debt. we have a group of senators headed by senator chambliss and senator warrer in who are working to draft such a thing -- senator warnar who are working to draft such a thing. the most important player, president of the united states, we need his leadership in dealing with the long-term debt. >> we'll take a couple of questions if there are any. i was going to say this is a first.

>> $12 billion for short-term bill, take defense off the table and strengthen the bargaining power of speaker boehner and the president and the democrats, is that -- >> well, i don't think it's designed to put anybody in a box. it's designed to reduce spending in this year's budget. as much as possible. and then a void obviously shutting down the government. which nobody wants to do. and then move on to much more important things, as several of our senators have pointed out. we've got $14 trillion in debt. we've got over $50 trillion in unfunded liabilities. promises we've made that we cannot keep. and a debt crisis looming. it's time to get to work. and we are proud of what house republicans have done, not only on the short-term issue, but in helping to lay the groundwork for addressing our long-term

debt problems. and so we're ready to go. and hoping the president will show up here at some point. >> senator, are you -- that congress cannot complete a full-year p.r. for the government? >> implied in the house bill is that we will fund the government for another week. and it is our hope that we will wrap this whole issue up before april 15. thanks. >> now we will hear from senate majority harry reid and senate on budgetrats negotiations. >> we thought for several days

we were close to an agreement, but the meeting at the white house and the negotiations over the weekend really indicated to me and i think most people are watching them that the leadership in the house is being guided by the tea party. they are saying they will not agree to anything unless they get 218 republican votes. we could not pass the last short term cr if that were the case. our problem is we cannot agree to take all that in domestic discretionary spending. i guess they were for it before they were against it. now they are moving the goal post again. as you heard the president say, there is going to be no more short term extensions. he said that he, he told me that. it is time to get the job done.

representative out of his need to stop clean to a bill that has been defeated here in the senate. that bill is a non starter. they have trouble of forcing themselves from that ideologically driven nature. we know the bill is awful. it kills 700,000 american jobs. that is not all. it would take hundreds of thousands of preschool kids out of the head start programs, one of the best things in this country ever for poor people, poor kids. it would deny housing for a hundred thousand homeless veterans, veterans who are in big trouble, it slices cancer research by more than $1 billion so we gave them many different

alternatives, and there is defense spending that we know is available because of secretary gates, there are mandatory spending measures that we could stick in there that would be fairly easy. when we talk about defense spending, the person who put that forward in the white house is not just somebody that lives in congress, but it is from dan and certainly nobody can question his patriotism. he is a valuable war hero, and he said defense is an area we can cut. the commander in chief agrees with senator enouye. republicans are not willing to bend even on this. i was asked to come to a meeting at 4:00. one hour and 20 minutes from now, i look forward to that meeting, but i hope republicans

do what the country needs, not what they believe the tea party wants. [unintelligible] i am not real optimistic, no, i am not. i think that he party is driving what goes on in the house of representatives, and we cannot do what they want done. i repeat, $73 billion. we have been willing to do what is fair in ratcheting down very hard on programs dealing with discretionary spending. we cannot go any more. the extra money in there, we can get them their number. it is not a question of number. ideological -- and i would say this, i know that my republican counterpart came here and talk about this great bill in the

middle of the night, early this morning, 12:30, put to the rules committee. listen to this one -- they took all the domestic discretionary that we agreed to do, and if in fact we are part of an overall deal, but they, in my opinion, not in good faith, took those dollars, stockman to this short-term cr they have, for a one-week extension, and then they are trying to find the defense department for the rest of the year, when everybody else has funded it for one week. then they stick in abortion- right amendments. every step we take, it is something they do to put us in the eye. they are not trying to -- it appears they're going to try to do everything they can to satisfy the tea party.

>> senate democrats support your own plan? >> the answer is, there are things we can do and we are considering that. >> is the oneisthecr debt on our arrival? >> yes. appy to see it. they could send it to as early as tomorrow. there would be a way they could do it tomorrow. [unintelligible] i think we have almost work that out. i was on for a few hours, but it was directed to do a consent agreement to allow us to move forward on this bill. [unintelligible] i have been invited to a meeting.

[unintelligible] we have not established much of these scums that we have every week. i have not determined what we are going to do ultimately. pardon me. [unintelligible] i do not think so. [unintelligible] that is not in my office. it is a place. it is not in my office. not on the senate side of the capitol. the president spent an hour and 20 minutes with us this morning. he clearly thinks it would be better if we reached an agreement, but he agrees with me. there's only so much we can do. we have bent over backwards to try to be fair and reasonable,

but when you have one party that cannot be fair and reasonable, it makes it a real hard push. he was very engaged this morning, and he had a -- is my understanding that there is going to be meeting this afternoon with the speaker and with me, and if there's no thank giveade -- everybody. -- thank you, everybody. >> the house budget committee will begin work on the republicans' 2012 budget plan tomorrow. committee members will debate and offer amendments to congressman ryan's proposal.

treasury secretary geithner ur said earlier market servicers have done a poor job of helping our worst -- borrowers to the crisis. then paul ryan lays out the house gop 2012 budget plan. then reaction from democratic congressman chris van hollen. >> the c-span3 deal library has just won a peabody award for its contribution to public life. you can watch every program on the c-span network since 1987, when have -- 170,000 hours free. >> tim geithner said earlier that with the global equal -- there would be consequences if congress did not raise the debt

ceiling limit before may 16. secretary geithner to testified before a senate appropriations sub committee for 1 hour 15 minutes. >> good morning. i am pleased to open this meeting. i want to welcome my ranking member of kansas. welcome to your new position here. i am looking forward to working with you, and my colleague from illinois, senator mark kirk. let me start with an apology, but it is all the president's fault. he decided at the last minute to call -- to call in the leaders, so i apologize to all those in attendance.

today we will examine funding requests from the department of the treasury. they include the irs, the community development financial institutions fund, and we will look at this agencies separately. the treasury progress we will talk about today are programs which deliver a generous return on investment to taxpayers. a few examples -- before any coalition planes were in the sky over libya, treasury's office had frozen $32 billion in libyan assets. that is $32 billion that muammar gaddafi cannot use. the financial crimes enforcement network tracks the financial trail when a criminal

tries to steal your identity. for organized crime, narcotics traffickers, treasury's management service insurers social security payments their way east to see nearest. as many of you look forward to, tax refunds make their way to taxpayers a. treasury employs a professional contract of staff can analyze conditions to monitor risk building up in the financial system and promote sustainable economic growth. general forspecial tarp provides transparency. last year alone the i.g. saved $555 million in taxpayer dollars that would be lost in fraud.

to continue these activities in 2012, treasury request spending authority of 1.3 $9 billion. their quest is a decrease of $18 million. compared to put the fiscal year 2010, fiscal year cr level we are operated on. i am glad to see a restraint budget proposal. i have concerns about some of the proposed cuts. treasury proposes to scale back law enforcement access to data on suspicious financial transactions. -- to's a proposal that thi nue funding of law enforcement. for too long consumers have struggle to navigate the financial products front with

hidden fees, 8 and switch terms, and other features that experts have difficulty understanding. it will operate with a mission to empower consumers with information they need to make financial decisions for themselves and their families. since the day i introduced the bill to create this bureau, wall street has tried to undermine it. with the help of some in the house, wall street is attempting to limit spending by this agency to barely half of what it needs to get started. it is not a surprise that wall street is balking at cfpb starting up. fully informed consumers will make markets more competitive. we will work to make sure this agency has what it needs to start working for consumers. i look forward to discussing this with the secretary, and i now turn to my ranking member for his opening remarks.

>> thank you very much. today marks my first day to act in this role as ranking member, i appreciate the opportunity to serve on this committee, providing oversight over all discretionary spending. i look forward to working with you, mr. chairman, as we look forward to this budget and we reach the right agreement to spending levels. mr. secretary, you have many challenges in your responsibilities, and the include in my view invigorating bank lending to businesses, stabilizing the housing market, and encouraging economic growth. most importantly, you must promote this growth at a time in which the long-term financial security of the united states is one that is burned by unprecedented debt. our country faces enormous fiscal challenges which left

unchecked will have a disastrous impact on the future of our nation. for too long members of both parties have ignored this current fiscal crisis and allow our country to live well beyond its means. americans are looking for leadership in washington. oftentimes the debate about government spending is seen as a philosophical and academics and political discussion about a partisan issue, but out of control borrowing and spending has true consequences on everyday lives of americans. we're facing a turning point in our country's history. i know you are fully aware of the crisis we are facing and i hope we are able to work together to right the ship. in my remaining few moments, i want to address another problem hampering our economic recovery. the uncertainty coming out of washington regarding bank regulations and regulators. you and i had a conversation

about this when i was a member of the house, and unfortunately i do not think have -- think things have changed. this sort of relationship banking played no role in the fiscal crisis with his experience, and i feel strongly once record this trend we will see a recovery to call. i hear from kansas bankers this serious reasons for their inability to lend to members in their community is the increasing cost of unnecessary regulations. i hear from bankers like a record this morning who in his experience has never experienced such an unprecedented examination process like what has been ongoing recently. i hope you will work with me to find solutions to this circumstance. i am requesting your thoughts as the senator mentioned on the cfpb.

i plan to introduce legislation today that will reform the structure and replace the single director structure with a five- person commission. my concerns with the structure, this legislation is the first at the make sure congress as necessary oversight of such a powerful agency. the department of treasury place an important role in managing the finances and then something to reiterate our economy. i stand ready to work with you to address the challenges and look forward to working with you and senator turban on this subcommittee to find common sense solutions. i think it sherman and welcome secretary geithner. >> mr. secretary, you have the floor. >> thank you. we are here to talk about the treasury budget, which may not

seem central. i want to spend a few minutes highlighting what is at stake. treasury plays a key role in arranging important programs to help strengthen economic growth. it plays a central role in designing a powerful set of taxes to encourage businesses' investments, making it easier for families to afford college. we played a role in devising a better means for establishing infrastructure across the country in setting up programs to help facilitate small business lending and credit growth. the new market tax credit, it plays a very important role to encourage china to appreciate their currency more rapidly, but the help establish a more level playing field for american companies. we play a central role in

repairing the housing market, and working to --beyond these questions about growth, we played a critical role in helping reform our national financial system. we chair the council established by congress for financial stability. we help to work to wind down the better consumer protection, all as part of a broad strategy working with countries are on the world to make sure u.s. firms face a level playing field as we strengthen these basic constraints on risk-taking and leverage. treasury plays a role as the chairman said to help protect national security threat administering financing, sanctions programs, but as the chairman said, in libya. treasury is responsible for raising the resources required to fund the obligations congress has established for the

government. every dollar we spend the irs generates $5 for tax revenue. every dollar we cut, the irs will increase the risk of americans to pay their taxes. we carry out these responsibilities with a tight, the efficient use of taxpayer resources. it is a remarkable achievement that in a $14 trillion economy, enormous economic challenges here and around the world, the entire treasury staff is about the size of the tax department of one of america pasqua single -- america's single corporations.

we have identified in our last request more than $1 billion in savings. by consolidating functions and helping bring the payment system into the modern area, by shifting to electronic processing, and with very careful management of the emergency program established by congress we have helped save hundreds of billions of dollars of taxpayer resources should be careful management of those investments. our overall investments in the system alone are likely to generate a substantial profit to the american taxpayer, estimated today in the range of $20 billion. the president and the congressional leadership meeting this morning on the budget for this year, we're six months into the air now. house republicans outlined this morning a strategy for how to reduce our deficits over the long term. a group of senators are working hard to reach agreement on a comprehensive set of reforms that put us on the path to live

within our means as a country. i want to conclude by emphasizing how important it is never reach a bipartisan agreement on how to restore fiscal stability by reducing spending where we can, but investing in the types of reforms like education that are essential to our economic future and by enabling us to meet our commitments to our seniors and those less fortunate americans. the economy is healing. judge krishan is accelerating. businesses are investing. we have a long way to go to kill the damage caused by this crisis, and we face enormous challenges, including from countries around the world. all must have a responsibility to demonstrate that we can solve these problems and not just talk about that. i look forward to working with you after she purrs support for the exceptionally talented professional staff of the treasury to carry out this enormously, carry the set of -- and enormously complicated set

of responsibilities. >> what could be more important than to the you where we are among where it is we are going. welcome, secretary died there. we learned last week that the nation bus jobless rate hit a two-year low. another sign the economy is continuing at a steady recovery, and if i may add a personal note here, the company i ran before i came here is the company releases the labor statistics that we see, a company called adp. yesterday, i will take another moment, a personal privilege, we said goodbye to my to the founder of adp, a humble man who worked very hard.

we did it for nothing to help us along except for our intelligence and muscle, and i am not sure i provided much of the intelligence carr. right now we have to help americans get back to work. that is why i see president make's budget -- we cannot those investments unless we start paying attention to the revenue side in the government cost ledger. i was a ceo and i know they cannot run a company or a country without revenues, no matter how much you cut expenses. that is why i voted last year it and the bush tax cuts. windfalls for the wealthy did not create jobs color reduce the deficits, or help us invest in our future. i urged president obama to keep the commitment in his budget to

let the bush tax cuts for the wealthy expire at the end of 2012. the wealthiest among us do not pay their fair share. he president's budget also includes a landmark moisture reforms root this will protect our economy from the meltdown that we suffered through in 2008, and that is why i am the deep concern that the tea party republicans plan for funding for reform is in place. it is the republican team party of huggins -- if that tea party republicans --all so need to strengthen investment in our nation's in thresher by repairing crumbling roads and bridges and building projects by -- like high-speed rail.

it will make easier for people to get where they need to go, improve the environment, and support job creation. president obama has proposed creating an investment and researcher, investing park in products that will get america moving, and i look forward to your commentary, mr. secretary. i am also eager to hear from the secretary about he can make taxes fairer, keep wall street in check, and accelerate our economic recovery, and i thank you. >> thank you. mr. secretary, before we get a policy and budget questions, i have to address the issue of crisis management. we have been lurching from short-term cr to short-term cr, i would like as you if you would tell me what impact this has had on the management of your agency

and operations. secondly, we are now starting have very active discussions amongst senators about what to do what if the government shuts down after friday. how many staff will still be around. whether anybody will answer the phones. whether it will be a skilled staff. i would like to know what your preparation has been at treasury and what services by be affected from your department when it comes to that. the final question is larger than the first two. that is around a corner is another crisis which he spoke to yesterday, and that is the extension of the debt ceiling. some senators have said we do not care. we will not vote for an extension of the debt ceiling. please tell us what the impact of failing to extend the debt ceiling would be on the american economy. three very simple questions. >> the office of management and budget has been coordinating the work of the executive branch in

preparing for shut down. the director set up a detailed guidance for how they would manage through what critical services that would have to retain, would be from a bit under the law to retain, and which they could no longer function with. i want to emphasize the fact that competence is very important economic recoveries. there are a lot of things happening in the world today that are -- that carries some risk to the global economy and financial system. it is very important that we in washington demonstrate that we will be doing things to help reinforce confidence, support recover, and part of that requires making sure the government can carry its critical functions, and those functions would be impaired. i would be happy to briefers that in more detail on exactly what would happen to the critical functions we are responsible for. they are very material. you're right to highlight the fact -- to say it again, if we

force the government to live week by week now, more than six months into the fiscal year, you will risk undermining the recovery now under way, and i think our first obligation of the american people, given the trauma caused by this crisis and the depth of the damage we still face, is to make sure doing everything we can to make sure we are reinforcing business confidence, helping get more americans back to work, repair the damage caused by the shutdown. we -- you are right to say that in the next several weeks congress will run out of room. it will be forced to raise the basic that limit. what will happen if it does not? as i said in my letters and has all my predecessors have said, the consequence of that would be catastrophic to the united states. the fault would precipitate a crisis worse than the one we

went through. it would make that crisis look modest in comparison. it would force us to cut payments to military -- the critical payments to our seniors, and it would be a reckless irresponsible act. i find it inconceivable that congress would not act to increase the limit, and i welcome the fact that all the leaders of both parties in both houses have reaffirmed the importance of making sure that this country of the united states of america will meet its obligations. that requires congress to act in a timely manner to increase the limit. if we take no additional actions, we face that we have run out of room on may 16. there are a series of measures my predecessors have used in the past that would give congress more time, but those measures did not by us as much time in the past because our debts and deficits are so large that. they will buy us an additional few weeks if congress does not

act. even resorting to those measures does create risk to adding uncertainty. we will do everything we can make sure we meet our obligations and encourage congress to act in a timely manner. >> mr. saturday, united states dollar is viewed as the most critical -- credible global currency, and if we default and did not extend our that's silly, what impact of that out on the reputation of the dollar and our economy? >> it be catastrophic. you would call into question the willingness of the government of the united states to meet its obligations. he will shake the basic foundations of the entire global financial system. i am totally confident congress will act to avoid that. to think about it in a direct sense, the borrowing cost permanently for all americans. every business for a long period

of time would raise a much higher cost of borrowing. every family, it would raise a much higher cost of borrowing. unemployment would rise. hundreds of thousands of businesses would fail. it would be a deeply irresponsible act, again, inconceivable. >> they give. mr. secretary, i experts shaver exhortations about the necessity of raising the debt ceiling. i would welcome you and the administration in making the same kind of raising the same kind of concern in describing the scenario if we do not get our debt under control. their consequences -- there are consequences, the standard of living, inflation, and i would encourage the administration to join with congress, republicans and democrats, to find a path toward a long-term, sustainable

production and our national debt. there are bad consequences. he described one scenario. there is another that will come if we did not respond, responsibility, to the ever- increasing debt. one thing we can do is to get a tax code in place that is sparer, treats individual taxpayers and a way that makes sense in a global economy, and again i would be interested in hearing what the treasury department is doing with regard to the so-called grand plan for tax reform or major modifications in our tax code. i am learning from senator ddurbin to ask my questions at the beginning. i eat indicated in my statement that i introduce legislation today in regard to the consumer prince -- financial protection bureau, and i would like your view as to the preparation process, more funding, that the

federal reserve is funding that today. i would like to see greater oversight by congress in regard to the appropriation process. a five-person commission or board as compared to an headman this -- as compared to an individual. >> thank you for raising your courses. you are right that it is critically important that congress comes together and locked in a setup will take-your reforms that will put us on a path to living within our means as a country. if we do not do that, you will put at risk our future economic correct. we cannot be putting out indefinitely. you have before you not just a process under way by a group of bipartisan senators, but looking at a comprehensive plan, a physical commission, which is a

comprehensive, balanced reasonable starting point for discussion. this is not beyond the capacity of our country to sell. if you look at the united states today, investors are confident we will solve this problem. we have to justify the confidence. you are right to emphasize that. he asked about tax reform. it is inevitable that congress comes together with the administration to reform the u.s. tax code, not just for individuals, but for corporations. you have a very compelling model for doing that in the commission's proposal. a lot of merits, which is to broaden the base and use some of the savings to lower rates and no work future deficits. we are designing a corporate tax reform that is comprehensive that will lower the tax

corporate rate substantially, and before that by reducing or eliminating a set of special preferences for individual industries and activities. we think that is necessary to improve incentives for investment, and we hope that we will be able to work with congress on doing that. perhaps at of the comprehensive reform of the individual code, which is likely to come in the next few years. that is important because we want to do everything we can make it more likely that american companies -- build their next plant in the united states. >> mr. secretary, in addition to the debt commission, is there a plan in the works on corporate tax? >> yes. we are -- we have a working on a comprehensive proposal to help get the process and congress moving, and we have consulted

with your colleagues on the tax-writing committees on how to design that, and i am optimistic we will be able to start that process with a very strong pro- investment, kerr-current proposal. it will be revenue neutral, but i think we can do that. he raised important questions about the cfpb. i cannot answer your last question, but it is important we nominate and conform a director because the full authority congress gave this bureau did not come into place until we have a confirmed director. we would like to do that. we are consulting with congress, we want to nominate somebody to be confirmed, and that is why it is taking us some time. it has been a challenge for us to find -- to confirm and number of positions for important financial responsibilities. you raised -- you propose, you said you are right to propose

legislation. i understand the motivation, i believe as you would suspect that congress has been having considered a range of alternative models came up with a good model that combines very strong authority and independence with a set of checks and balances, this was the most car full of those are the this is of this bureau are subject to review and approval by the council of financial writers that congress established. that treats a stronger set of checks and balances than exist for many other financial regulators, independent or not, and congress got that balance right. if you look at what happened in our country in this crisis, you sell appalling, unforgivable failures and consumer protection. it is important we stick to that, and i think congress, if they keep it up for a long time,

they can come up with a good balance. >> if i could follow up. can you think of any downside of not having a director confirmed by the operational state in july? >> absolutely. what happens at the transfer date, the date where the authorities that exist among existing federal agencies is transferred to this new bureau, that responsibility is shared among seven different agency, and we will consolidate that. there are other authorities that only take effect when there is a confirmed director. the consequence of that the lake, and one example of that is one of the biggest problems we have is we helped banks to a set of standards. no similar standards are existing without protection. what happened over time is at a lot of that basic business and simmer finance moved outside the banking system to institutions

that are not supervised adequately. that treated appalling vulnerability for individuals, but created a huge and fairness for banks. one of the most important things congress did, establish a level playing field between banks and nonbanks. if we delay, we start funding or delay for paris to the agency, then you put banks into a disadvantage again. they will face the possibility of their business competed away. that would be an unfortunate consequence. >> mr. secretary, might a consequence of a shutdown result in an inflationary reaction? >> that is an excellent question, and i do not think i

would frame that as a most significant risk. the most significant risk is you leave the entities that are doing vital things, not just supporting americans in combat, not just making payments to seniors, provide benefit checks to americans who depend on it for their living, you put those things at risk, risk is for a long period of time, you create uncertainty, and that could slow recovery. i would think not about a risk that we accelerate inflation so much as we take a little bit of a moment them out of the recovery and slow the pace of getting more americans back to work. >> house republicans claim that cutting programs like head start, medical research, are going to solve that problem. they refused to look at the revenue side of things. i mention that earlier. how important is it to let the bush tax cuts for the wealthy

expire at the end of next year to help to eliminate the budget deficit? >> it is critically important. if congress extends those tax cuts, that go to 2% of the most fortunate americans of the country, we have to borrow $1 trillion over 10 years. we cannot afford to do that. it is not a responsible act of government, asking my successors to go out and bought $1 trillion the finance tax cuts for the richest 2% of americans. we cannot afford it. there is no credible case for doing it. you cannot restore fiscal sustainability, you cannot restore a modicum of balance for a fiscal position and preserve our capacity for economic growth and critical to our commitments for seniors if you sustain those tax cuts that we

cannot afford. >> the administration house budget calls for an increase funding implementing the wall street reform law. the house republicans failed in their attempts to block that so they propose cutting the funding for that agency. what effect might these proposals have on wall street reforms, and our ability to prevent another financial crisis? >> the cuts are designed to starve those agencies of the ability, tonight a and -- denied them the ability to establish protections for consumers, and they will not pass because we think it would be irresponsible to pass them, but if they did pass, they would deprive us of the ability to fix the enormous

cost of the american people. i think it is important congress equip these -- the executive branch with the resources and the people we need to enforce those basic sensible rules of the game. >> mr. secretary, mr. davis that the sanctions against the foreign medical -- minister of libya, a man who has been linked to numerous terrorist attacks, including pan am 103. in your consultation with secretary clinton regarding lifting the sanctions, the you discuss what other lovers might be available to be sure that he is the cow -- what other levers might be available to be sure

that he is held accountable for these crimes? what with the estimate be of the revenues needed to help us stabilize things that continued -- continued to do improvements to our economy? >> the central question we face is how to get the deficit down to a level where we put our national debt as a share of the economy on a climbing path. you have to start to reduce it. that requires we get our deficits down to a level below 3% of gdp. that is a level at which our revenues and our commitments apart from interest are in balance. to do that, we proposed in our budget, the commission proposal

a more ambitious way to do that, that provides it package, a balanced package of tax reforms and reductions in spending and a commitment that would achieve that measure of balance. without putting at risk future economic growth. without causing material damage to the economy. those are things we can afford to make, changes we can accept. both those eggs at this -- both those examples -- the challenge is not to reduce the seven deficit. the challenge is to do it without hurting future economic growth, is fair to the american people, and that requires you to do it in a balanced way, and it is within our capacity to do as a nation. this is something we should make

sure we can let americans know because they are uncertain about this. this is something we can do at acceptable cost with time for people to adjust. >> well said, mr. secretary. >> you requested a 4% increase, and a couple of counts stood out. there was a request for $3.4 billion in international programs, a 50% increase, and food security accounts, a 1027% request, and that increase, 336% increase. >> the international peace, the treasury piece of what is called the foreign assistance budget is 5% of the total foreign assistance budget. the peace we are responsible

for as funding institutions like the world bank, the international financial institutions. in those institutions we get enormous leverage. the specific request you referred to include a variety of commitments that the government made in the past under republican and democratic administrations, a set of new commitments where we think there is the highest return to our basic national interest. an example. food security, what we propose to do is help feeding a milk -- a multilateral fund support improvements in industrial countries because of the challenges of poverty in this country. we are the most productive farmers in the world and that case. across west i would be helpful to out -- i would be happy to talk.

our resources in that 5% leverage multiple dollars both by bringing other people to the table and borrowing, so that total resources is more than 1.5 times than the budget. as we figure out how to reduce spending, we will have to reduce spending, we want to make sure we preserve things where we have uck.biggest bang for the bough >> unworried we have appropriated money that is going directly to the islamic republic of iran, meaning the treasury part manages a relationship with the ifc. ibrd has an unexpected balanced it iran. we of an $58 million -- we own

$58 million in a bank that is iran. we 0185% of that. a total of $85 million direct of the u.s. taxpayer, and i understand these payments are made directly to the finance ministry of the islamic republic of iran? >> oppose lending to iran. we have opposed them in a long time. last loans approved were approved in 2005. >> you have not that these checks yet, but you are about to prov? 2005, that was last time the world bank approved a loan. we opposed it then, and we have worked hard to dramatically tighten the financial sanctions on iran. >> he did not have substantial

success. i have written you a classified letter, and i hope you read it before you testify again on the subject. i hope you read that very carefully. >> i know that you care a lot about these issues. we'd do, and i would be happy to talk about these. the financial sanctions per graham's that my colleagues helped us design have resulted in a dramatic incredibly powerful tightening of the basic economic sanctions on the government of iran. it is very important we do that. >> before you testified again and make a statement like that, i would absolutely urge you to review the record. >> we are happy to work with you, and this job is a requires a relentless focus, because we titans of the year, what happens is overtime, the central shift gradually, people get around it,

so it requires a relentless focus. >> in march, the u.s. government raise a net of $120 billion, and it's that a net of $1.05 trillion. he spent $8 for every $1 you race. he covered by our roaring $786 billion and reducing your cash balance to an ending balance of $118 billion. is that your estimate of how your march went? >> i will have to check those numbers ver. >> erskine bowles said yesterday that we are facing the most predictable economic challenge in our history. you agree? >> it is important we do it.

we have lots of the challenges. our challenge is to do that in a way that does not hurt the recovery, heard the economy. >> my last question. if you with the chinese, with the land this -- lend us another 1 trillion dollars? >> of course. the world still views the american political system as up to that challenge of delivering reforms of making our economy stronger. if you look at what we pay to borrow today, there is confident around the world in the capacity of this system coming together to solve these problems because we have always done it the past. we have to earn that confidence every day. that is why these efforts are everyday, and it is important, as finds a way to come together and locked in a comprehensive restraints that reduce those

deficits. it is within our capacity to do and we have to make sure we justify that confidence you see in the markets every day now. >> take you, mr. secretary. -- thank you, mr. secretary. >> you witnessed and participated in discussions that led to an effort to save financial institutions from ruin, and by most standards the fact that the money has been repaid that our government, the tarp money with interest, in most instances, is an indication of recovery. the purpose of wall street reform weston make certain we never had to walk that road again. we had to make sure that we put in place oversight and regulation so the excesses that led to the recession were not repeated. since passage of that of the session there has been a steady effort by wall street the on to

that wall street reform. we have seen it in many aspects. i am not want to raise the issue, but i am battling an issue of interchange fees. when it comes to financial responsibility efforts, there is an effort to slow down that implementation or stop it. as you step back and look at the banking industry from the darkest days, beginning in this recession until today, i see profit reports which suggests they are doing quite well. is there any indication that you can point to of weakness and our financial institutions that has been brought on by too much government regulation and oversight? >> let me say a few things. the u.s. financial system is in a dramatically stronger position today than it was in the years running up to that crisis. there is much more capital and

the system. the weakest parts have been washed away. what we have left is much stronger. the challenges we face in the system are community banks across the country are still exposed and facing a lot of challenges still, and that is hurting the small business customers. the housing finance market is still deeply damaged. just at the beginning of repairing that challenge. we have a lot of challenges to those still. i believe these reforms are essentials to the basic health of the american private sector, are essentials to credibility of the american financial system globally. absolutely essential to the ability of this financial system to take the savings and channel and the people that have an idea, to want to build a growing company, and we have to make sure we meet the basic

challenges of the legislation in designing sensible rules. there has to be a balance. we have to preserve competition, some measure of the pheasants, dynamism, innovation, but we have to do a dramatically better job to protecting investors and consumers from the kind of abuses we felt. our biggest challenge now is to make sure those designs are done well, allowed to take effect. a minister by people who have the resources and the authority to carry out the responsibilities, and we are at the early stage of the process of implementation. >> yesterday i went to an opening of a housing projects, " on the west side of chicago. it was the same location where doctor martin luther king state when he lived in chicago. they were proud of the fact that they had five requests 45 units. as i went to this ribbon

cutting, i drove to the neighborhood, and virtually every third home was boarded up with plywood, indicating it was in foreclosure and not currently occupy. it strikes me that this is still an unresolved issue, and you had alluded to it, about the value of real estate in america and our housing crisis. can we expect a solid recovery of this economy unless or until we mark to market and understand what the true value of real estate is, with so many americans facing the prospect of being under water in their own personal debt on their homes? are we tallying the inevitable of facing a resolution of this pricing? >> i do not think so. we you are right to remind everybody that the housing market is still in crisis. it is not still in