drop and then the calls for more revenue commend because the spending never stops. because the spending, as we saw with the stimulus, and other legislation of the past democratic majority is that they will then spend even more money to try to get their way out of a crisis. it was disappointing to see the president buy into the logic that your prosperity comes from the government rather than from the fruits of your own hard work and that somehow the government is entitled to whatever of your money it deems necessary to continue its wasteful spending habits. again, this is rejected. as the gentleman from new mexico understands, we live in a very difficult period of time. we're making the transition from an industrialized society to a globalized consumer-driven economy. . we have seen americans made difficult decisions to survive and compete. they discarded things that they felt they needed. one entity above all has failed

to emulate the difficult decisions made by men and women across america and that entity is big government. and the reason is very simple. you can only spend what you make , but big government can spend what it takes from you. and so today, we saw the president make the argument that if we just took more from the american people or a certain segment of the american people, disregarding his rhetoric that we are disregarding, we have to get out of this and adapt to a consumer-driven economy, one that understands that the founding principles of this country are there for a reason, now that we have reached the height of the welfare state, rather than fostering self-government, liberty and prosperity, that the day will come when this government and

its fiscal reckless necessary proves unsustainable and the question before us, will we responsibly and constructively address this crisis by performing our constitutional responsibilities and fulfilling the promises we made to our constituents or tax and spend policies that didn't work which were known as soak the rich, spend the bread, bad idea. i thank the gentleman from new mexico. the fiscal debate which will continue here tomorrow is a very simple one. you can protect the big government policies of the past, or you can look forward to self-government, a citizen-driven government that releases the entrepreneurial spirit and allows family to move into liberty and prosperity or in short, support the president and politics of the past, bankruptcy, and look forward and

let the american people lead us into a new era of prosperity and prosperity. and i yield back. mr. pearce: we cannot sustain this course, this course is doomed to fail. and i draw attention to my chart again, the far right-hand corner of the chart, in which we show here exactly what the office of management and budget says. this is the president's own economic arm of the white house that says that our prosperity through time has been increasing. that's the effort sloping line and then we see the chart absolutely stops at some point in time, about 2038 and that is the point that mr. mccotter refers to that we are on the path of stopping our economy, our economy will actually fail because of the policies that we have now. and this is the future that is being demonstrated by our president today in his speech.

now, as he talks about taxing, understand that we have lost jobs because of our tax policy and we have lost jobs because of our regulatory policy. now, in the speech today, he talks about tax policy, but it's going in the wrong direction. in previous speeches, he has talked about the need to reform corporate taxes, because he acknowledges in his state of the union speech, he acknowledges that we are taxed too high, that we can't create the economic growth that we need because we are taxing corporations in a fashion that exceeds other nations in the world. so he acknowledges that there -- and i was hoping today in his speech, that he would set a target and timetable where we could start pull back those manufacturing jobs because of reform in tax policy. curiously in defining our future and defining the way we are

looking at the values of the country rkts that is his declaration of what he wants to do in a speech today, he owe myths the job creation piece towards our corporations. he acknowledges that in his state of the union speech, in his state of the union speech, he says that we are taxed at too high a rate, that he wants to cure that. he says that which must have reform. he said we need to use our savings to lower the corporate tax rate for the first time in 25 years. and that is what americans were looking for. americans maybe can't express the companies that have left this nation to find lower tax rates and better economic regulations in other countries. they might not be able to name

them, but think implicitly know they exist. but i look at my chart. the revenues in this nation are $2.2 trillion. those are the taxes we pay to our government, we can cut our expenses, but we should be concentrating on increasing jobs. as they go back to work, they begin to pay taxes. but as every single individual is hired, they come off welfare, unemployment and food stamps and then they go down into the productive part of society and we find our economic imbalance collapsing. as we are hiring and putting people back to work, that should have been the concentration of president obama's speech today. in the past, because of our policies, we have lost the producers in this country, a list of them, converse, each-a

-sketch, leviys. stanley tools, rollings, box candy, ibm computers, nba uniforms, these are just a partial list of companies that have decided it is cheaper to manufacture somewhere else because our policies make it too difficult. if we are going to rebuild our economy, we need to rebuild that manufacturing base and do that through tax policy and that should be the concentration of both parties at this time in our nation's history. now, the president also mentioned on page two we are amassing debt levels. if i look at my chart, i show deficits, $1.3 trillion,

spending exceeds the revenues by $1.3 trillion and show it goes into that accumulated debt for generations past, and mr. obama mentioned adequately that that debt in the 1980's started reaching alarming levels. from the time of george washington until the first george bush, that's after 1980, we had an aaccumulation of about $5 trillion worth of debt. if you look at the chart, you can see we have and an aaccumulation of $15 trillion. $5 trillion back in the mid-1980's and we are at $15 trillion i would point out to the president that we were amassing debt at massive levels in the 1980's that the debt he has accumulated in his

presidency is almost equivalent to what we accumulated from the time of george washington to the first president bush. that is alarming. it's an alarming statistic that we have a deficit today in this budget of $1.3 trillion, but in 2006, excuse me, 2007, the last budget written under a republican congress and with president bush as president, the last deficit was under $200 billion that was 0.2. so we are over $1.1 trillion and even up into when the president came into office, our annual deficit was about -- it was less than half a billion. so we now have -- excuse me, half a trillion. we now have over $1.5 trillion

that the president is suggesting our debt level should be next year. in his time alone we increased deficits from the billion dollar category to the trillion dollar category and that is alarming debt and that has got other nations pointing to us and saying that i not sustainable. they are afraid that money isn't going to be paid back so they are afraid to loan us money. that can result in the federal reserve buying most of our debt. this year, our federal reserve is on track -- keep in mind they get much of their money from the government and they aring us money from the other hand -- our federal reserve this year is on track to lend us about 60% to 70% of the money that we borrow. mr. bernanke expresses deep

belief tcha there are buyers for those treasury bills out there and people who are going to lend our nation money, but as they look at the economic instability that we're facing, they understand the need that we have to number one, correct spending, but number two, to grow the economy and create jobs. now, there are those skeptics that don't believe that tax cuts will create jobs. again, i follow the example of exxon, when you take the profit away, you tax them more and decrease the amount they are spending on drilling companies, offshore platforms, that they are spending in different communities to get services done to their wells as they drill them. also, i would remind the listeners today of mr. swift, that 340,000 for the bulldozer,

those are the evidences that we get that tax cuts will create jobs. if we want to look at the other model, tax increases killing jobs, we can look no further than our own country at the time of the tax cuts of 2003 over the next four to five years, our economy created over five million jobs. as the threat of taxes loamed, as the economic slowdown came in, as the uncertainty of the current administration began to take hold, we have lost almost three million jobs. so just the talk of taxes, the talk of the cap and trade tax permeated the discussions in 2009, it began to cause people to shy away and say, we better not invest because we're afraid we are going to be taxed.

the discussions of the health care belief led to the belief that people had that washington was going to raise taxes in the health care field. so, again, consumers began not to purchase as much. investors began not to buy new equipment. people everywhere were becoming more caution and we slipped into stagnation and our economy lost jobs and has not been creating jobs at any significant rate. we're still above 8% unemployment and that was to be the floor we would find if we spent the money on the stimulus. in a previous vision that the obama administration gave to us. so as we think about other examples, i always like to use the example of ireland. 15 or 20 years ago, ireland began to lower its corporate tax rates. they believed, as i'm saying

tonight, that if they would lower tax rates to corporations, that the companies would come flooding into the country. they would come there to produce. and it created the irish miracle, the economic miracle of growth that was caused by ireland cutting its corporate tax rate from about 36% down to around 12%. a significant decrease. companies began to flood into ireland. the contrast is also given by ireland. as they began to find prosperity, they began to spend more than they bring in, the same model we are looking at here. they began to raise taxes and now then corporations are flooding away. just today, i was visiting with the managers of a cheese plant that is on the east side of new mexico.

they are an irish company. they have come here to produce because it's just too difficult, too high, the dakotases are too great in ireland. my brother-in-law works for hughes tool. he was at hughes tool back when they moved factories, production facilities into ireland. this year, my brother-in-law went to disassemble the last plant in ireland because they had gone up in their tax rates and no longer a good place to operate. if we are trying to solve the economic crisis we are facing, you can't get there by spending cuts or taxing the rich. in other words, taxing the rich is going to drive us away further into stagnation and job losses if we are going to rebuild our economy, we must concentrate on economic growth.

and the nice thing is that the actuarial tables tell us if we grow jobs at 3.5%, that this imbalance begins to disappear, that the worry of the future begins to dissipate, simply because we grow the economy, we create jobs and take people out of unemployment and take people off of welfare and food stamps, 3.5 cost to the government begins to diminish, 2.2 begins to grow and we find ourselves reaching balance and over the long-term, we find ourselves beginning to reduce this $15 trial i don't know debt. we find ourselves able to sustain the $202 trillion worth of unplanned expenses -- excuse me, they aren't unplanned but simply not paid for, expenses of social security, medicare and medicaid. that's where the real threat lies.

and no wherein mr. obama's plan do i see a dealing with those significant drains on our economy. his only plan is to tax the rich, the millionaires and the billionaires, by making them pay their fair share, and that he says is going to fix the economy. . that, my friends, is going to wreck the economy. when we choose that course of making the rich pay more than their fair share, they owe it to us, it's only fair, he says, in his speech, that they would pay a little more. when we do that we're going to choke jobs off even more, other nations are -- our $2.2 trillion is going to be less, we're going to put those people out of work, just like we did offshore in louisiana, we put about 100,000 people out of work there. we put them -- on the way of

putting them out of work. those people instead of paying taxes are going to pay no taxes but they're now going to cost us unemployment benefit, they're going to cost us in medicare, medicaid, they're going to cost us in food stamps, welfare and they're not going to be producing so this vision of taxing the rich, we're going to move more to an unproductive society because you cannot create more productivity by taxing it. if that were the case every nation would be productive, every nation can always go up on taxes but not every nation can create the environment to where innovators are allowed to produce. the innovations in the oil and gas industry have been dramatic and yet that's the singlary it appears president obama is going to kill first. that whole spector he refers to as yesterday's fuel.

yesterday's energy. if it is yesterday's energy, let the president take the lead and cease using it. use the energy of tomorrow, stop using that energy of the past. let him fly an airplane on something beside jet fuel, please. give us that bold vision and courage and leadership. let him show us the way. if fossil fuels are a thing of the past. but i suspect, like you and me, that the president is going to continue to drive his limousine on petroleum-based products, he's going to continue to fly air force one not on solar power but on jet fuel, i suspect that all of americans are going to do it. the only thing that we're going to have as an outcome is less plentiful energy, fewer jobs, a

greater imbalance in our government and our government spending, greater uncertainty for the future and that's a shame that that's the leadership that we're getting. because at this point in our world's history, it would be possible, if we are literally looking to recreate our economy, to draw back the manufacturing jobs of the past, to put them back to work here, to rekindle the industries that are gone so that we do have a future so, that people have not just jobs but careers to face, that they're able to plan for their future, that they're able to save for a house, save for the kids' education that, that they're able to truly live the american dream. that's why -- that's what has made this country great in the past and i think that americans at this point in time will find that leadership to the future and with that i yield back my time, mr. speaker.

the speaker pro tempore: the gentleman yields back the balance of his time. does the gentleman scr a motion? mr. pearce: yes, i would move that we adjourn. the speaker pro tempore: the question is on the motion to adjourn. those in favor say aye. those opposed, no. the ayes have. it the motion is adopted. accordingly the house stands adjourned until 10:00 a.m.

>> president obama presents his deficit reduction plan followed by reaction by house republican leaders. later, the house rules committee begins work on the 2012 budget. president obama presented his deficit reduction plan today. in a speech at george washington university. his proposal has $4 trillion in deficit cuts over the next 12 years. among those in attendance, treasury secretary tim geithner and members of the fiscal commission, including paul ryan. this is 45 minutes.

>> ladies and gentlemen, the president of the united states. [applause] >> thank you very much. thank you. thank you, everybody. thank you very much. thank you. please have a seat. it is wonderful to be back here at gw. one of the reasons i worked so hard with democrats and republicans to give the government open was so that i could show up here today. i want to make sure that all of you have one more excuse to skip class. you are welcome.

i want to give a special thanks to the president of tw. -- g. w.. we have a lot of distinguished guests here and a couple of people i want to acknowledge great first of all, joe biden is here. [applause] tim geithner is in the house. [applause] the directorate of the office of management and budget. [applause] the chair of the national economic council is here. [applause] members of our bipartisan fiscal commission are here, including the two outstanding shares. -- chairs. [applause] we have a number of members of congress here today. i am grateful for all of you taking the time to attend.

what we have been debating here in washington over the last few weeks will affect the lives of the students here and families all across america and potentially profound ways. this debate over budgets and deficits is about more than just numbers on page. it is about more than just cutting the spending. it's about the kind of future that we want. it is about the kind of country we believe in. that is what i want to spend some time talking about today. from our first days as a nation, we have put our faith in free markets and free enterprise as the engine of america's wealth and prosperity. more than citizens of any other

country, we are rugged individuals. a self-reliant people. a help the -- held the skepticism of too much government. -- a healthy skepticism of too much government. a belief that we are all connected. there is some things we can only do together as a nation. we believe and the words of the first republican president, abraham lincoln. true government we should do together what we cannot do as well for ourselves. so we built a strong military to keep us secure. public schools and universities to educate our citizens. we have laid down railroads, highways to facilitate travel and commerce. we supported the work of scientists, researchers whose discoveries is stabilized, unleashed revolutions, and led

to countless do jobs and higher new industries. each of us has benefited from these investments. we are more prosperous country because of it. part of this american belief that we are all connected also expresses itself in a conviction that each one of us deserves some basic measure of security and dignity. we recognize that no matter responsibly we live our lives, hard times or bad luck, a crippling illness or layoff, may strike anyone of us. there but for the grace of god go i, we say to ourselves. we contribute to programs like medicare, social security, which guarantee as health care and a measure of basic income after a lifetime of hard work.

unemployment insurance, which protects us against unexpected job loss. medicaid, which provides care for millions of seniors in nursing homes, for children, those with disabilities. we are a better country because of these commitments. i will go further. we would not be a great country without those commitments. for much of the last century, our nation found a way to afford these investments and priorities with the taxes paid by its citizens. as a country that values fairness, will appear individuals have borne a greater share of this burden down the middle class. everybody pays, but the wealthier is very little more. this is not because we begrudge those with well. we write the celebrate their success. instead, it is a basic

reflection of our belief that those who benefit most from our way of life can afford to give that little bit more. this belief has hindered the success of those at the top of the income scale -- has not hinder the success of those at the top of the income scale. i sometimes, during war or recession, our nation has had to borrow money to pay for some of our priorities. a little credit card debt is not going to hurt if it is temporary. as far back as the 1980's, america started amassing debts at more alarming levels. our leaders began to realize that a larger challenge was on the horizon. they knew that eventually, the baby boom generation will retire. that meant a much bigger portion of our citizens would be reliant

on programs like medicare, social security, and possibly medicate. like parents with young children who know they have to start saving for their college years, america had two starts hitting more to prepare to the retirement of an entire generation. to meet this challenge, our leaders came together three times during the 1990's to reduce our nation's deficit. three times. a court historic agreements that require tough decisions made by the first president bush, been made by president clinton, by democratic congresses and by a republican congress. all three agreements cost for shared responsibility and shared sacrifice. they largely protected the middle class. the larger protected our commitment to seniors. they protected our key investments in our future.

we went from deficit to surplus. america was actually on track to becoming completely debt-free and we were prepared for the retirement of the baby boomers. after democrats and republicans committed to fiscal discipline during the 1990's, we lost our way in the decade that followed. we increased spending dramatically, to wars and expensive prescription drug program. we did not pay for any of this new spending. instead, we made the problem worse with trillions of dollars in on paid for tax cuts. tax cuts that went to every millionaire and a billionaire in the country. tax cuts that will force us to borrow an average of $500 billion every year over the next

decade. to give you an idea of how much damage is caused to our nation's checkbook, considered. in the last decade, if we had simply found a way to pay for the tax credits and a prescription drug benefit, our deficit would currently be at low historical levels in the coming years. that is not what happened. by the time i took office, we once again found ourselves deeply in debt and unprepared for a baby boomers' retirement that is now starting to take place. when i took office, are projected deficit annually it was more than $1 trillion. on top of that, we face a terrible financial crisis and recession. it lasted temporarily borrow even more. in this case, we took a series of emergency steps that saved millions of jobs, kept credit flowing, and provide working families extra money in their pockets.

it was absolutely the right thing to do. these steps were expensive, and added to our deficit in the short term. that is how our fiscal challenge was created. that is how we got here. now that our economic recovery is gaining strength, democrats and republicans want to come together and restore the fiscal responsibility that served us so well in the 1990's. we have to live within our means. we have to reduce our deficits and we have to get back on a path that will allow us to pay down our debt. and we have to do it in a way that protect the recovery, at protect the investments we need to grow, create jobs, and helps us when the future. before i get into how we can achieve this goal, some of you

might be wondering, why is this so important? why does this matter to me? here's why. even after our economy recovers, our government will still be on track to spend more money than it takes and throughout this decade and beyond. that means they will have to keep borrowing more from countries like china. that means more of your tax dollars each year will go toward paying off the interest on all along that we keep taking now. by the end of this decade, the interest that we owe on our debts could rise to nearly $1 trillion rate think about that. that is the interest. just the interest. of the baby boomers start to retire, health care costs continue to rise, the situation will get even worse. by 2025, the amount of taxes we

currently pay will only be enough to finance our health care programs, social security, and the interest we all on our debt. that is it. every other national priority, education, transportation, even our national security, will have to be paid for with borrowed money. ultimately, all this rising debt will cost us jobs and damage our economy. it will prevent us from making the investments we need to win the future. we will not be able to afford good schools, new research, or the repair of roads. all the things that create new jobs and businesses here in america. businesses will be less likely to invest. is our creditors start worrying

that we may be unable to pay back our dead, that could drive -- but our debts, that could drive up the interest rate for everybody who borrows money. here is the good news. that does not have to be our future. that does not have to be the country that we leave our children. we can solve this problem. we came together as democrats and republicans to meet this challenge before. we can do it again. that starts by being honest about what is causing our deficit. most americans tend to dislike government spending any abstract, -- most of us believe that we should have a strong military and a strong defense.

most americans believe we should invest in education and medical research. most americans think we should protect commitments like social security and medicare. without even looking at a poll, my family holland political instincts tell me that almost nobody believes they should be paying higher taxes. [laughter] because all this spending is popular with both republicans and democrats alike, and because nobody wants to pay higher taxes, politicians are often eager to give the impression that solving the problem is eliminating waste and abuse. you will hear that phrase a lot. we just need to eliminate waste and abuse. the implication is that tackling the deficit issue will not require tough choices. politicians suggest that we can somehow close our entire deficit by eliminating things like foreign aid. even though foreign aid makes up

about 1% of our entire federal budget. here is the truth. around two-thirds of our budget is spent on medicare, medicaid, and social security, and national security. two-thirds. programs like unemployment insurance, loans, veterans' benefits, and tax credits for working families take up another 20%. what is left after interest on the dollar is just 12% for everything else. pedestal% for all of our national priorities -- that is 12% for all of our national priorities.

all that accounts for 12% of our budget. up until now, the debate here in washington has focused exclusively on that 12%. but continental% on a long will not solve the problem. -- cuts to that 12% alone will not solve the problem. it would require us to put everything on the table. take on excess spending wherever it exists in the budget. is there is plan does not require us to balance the budget overnight. economist think that we need a phased in approach. it does require tough decisions and support from our leaders in both parties. above all, it will require us to choose a vision of the america

we want to see five years, 10 years, 20 years down the road. to their credit, one vision has been presented and championed by republicans and the house of representatives. and embraced by several other party's presidential candidate. it is a plan that aims to reduce our deficit by $4 trillion over the next 10 years. it addresses the challenge of medicare and medicaid in the years after that. these are both for the goals. there were the goals for us to achieve. the latest plan achieve those goals would lead to a fundamentally different america than the one we have known in my lifetime. i think it would be fundamentally different than what we have known about our history.

is 70% cut in clean energy. a 25% cuts in education. cut in transportation. cuts in college grants that will grow to more than $1,000 per year. that is the proposal. these and other kinds of cuts to make when you are trying to get rid of some waste or find extra savings in the budget. these are not the kinds of cuts that the fiscal commission proposed. these the kinds of cuts that tell us we cannot afford the america that i believe then, and i think you believe in. i believe it painted vision of our future that is deeply pessimistic. it is a vision that has been our roads crumble, we cannot afford to fix them.

it there -- if there are bright young americans that have the drive but not the money to go to college, we cannot afford to send them. go to china and you will see businesses opening research labs and solar facilities. south korean children are outpacing our kids in math and science. we're scrambling to figure out how to put more money in education. brazil is investing billions in new infrastructure. they can run half their cars on biofuels. yet we are prevented -- we are presented with a vision that says the american people, the united states of america, the greatest nation on earth, cannot afford any of it. it is a vision that the american cannot afford to keep the promise we made to care for our seniors. it says that 10 years from now, if you or a 65-year-old eligible for medicare, you should have to pay nearly $5,400 more than you would today.

it says that instead of guaranteed health care, you'll get a voucher. if that doctor is not worth enough to buy the insurance that is available, tough luck. you are on your own. put simply, it is medicare as we know it. -- it's in its medicare as we know what. up to 50 million americans have to lose their health insurance and as for us to reduce the deficit. so are the 60 million americans? many are somebody's grandparents. maybe one of yours. they would not be able to afford nursing home care without medicaid. many are poor children. some are middle-class families to have children with autism or down's syndrome. some of these kids with disabilities are so severe they

require 24-hour care. these are the americans we would be telling to fend for themselves. worse of all, this is a vision that says even though americans cannot afford to invest in education, even though we cannot afford to maintain our commitment on medicare and medicaid, we consult afford more than $1 trillion in new tax breaks to the wealthy. think about that. in the last decade, the average income of the bottom 90% of all working americans actually declined. meanwhile, the top 1% saw their income rise by an average of more than a quarter of a million dollars each.

that is in need to pay less taxes? they want to give people like me a $200,000 tax cut that is paid for by asking 33 seniors each to pay $6,000 more in costs. that is not right. it is not going to be -- it is not going to happen as long as i'm president. [applause] this vision is less about reducing the deficit that is about changing the basis of social compact in america. ronald reagan's own budget director said there is nothing serious or courageous about this plan. there is nothing serious about a

plan that claims to reduce the deficit by sending a trillion dollars on tax cuts for millionaires and billionaires. i do not think there is anything courageous about asking for sacrifice from those who can least afford it and do not have any talent on capitol hill. that is not a vision of the america i know. the america i know is generous and compassion and. it is a land of opportunity and optimism. yes we take responsibility for ourselves, but we also take responsibility for each other. for the country we want and the future we share. we are a nation that built a railroad across the country. we brought like to community shrouded in darkness. we sent a generation to college on the gi bill and we saved millions of seniors from poverty. we have led the world in scientific research and technological breakthroughs that

have transformed millions of lives. that is do we are. this is the america that i know. we do not have to choose between a feature of spiraling debts and one relief forfeit our investment in our people and our country. to meet our fiscal challenges, we will need to make reforms. we will all need to make sacrifices. we do not have to sacrifice the america we believe in. as long as i am president, we will not. today, i am proposing a more balanced approach. to achieve $4 trillion in deficit-reduction over 12 years. it is an approach that borrows from the recommendations of the bipartisan fiscal commission by appointed last year. it built on the roughly $1 trillion in deficit reduction i already proposed in my 2012 budget. it is an approach that puts every kind of spending on the table. one upper tax the middle class,

seniors, and investment in the future. the first step in our approach is to keep annual domestic spending below by building on the sittings of both parties agreed to last week. that sabalo will save us about $750 billion -- that step alone will save us about $750 billion over 12 years. we will make the tough cuts necessary to achieve these things. including in programs that i care deeply about. i will not sacrifice the core investments that we need to grow and create jobs. we will invest in medical research. we will invest in clean energy technology. we will invest in new roads and airports and abroad and access. we will invest in education, and job training, and do what we need to do to compete. we will in the future.

the second step in our approach is to find additional savings in our defense budget. as commander-in-chief, i have no greater responsibility than the protection of our national security. i will never accept cuts that compromise our ability to defend our homeland or america's interest around the world. as the chairman of the joint chiefs has said, the greatest long-term threat to america's national security is america's debts. just as we must find more savings in domestic programs, we must do the same in defense. we can do that while still keeping ourselves safe. over last two years, robert gates has courageously taken on wasteful spending. setting $400 billion in current and future spending. i believe we can do that again. we need to not only eliminate waste and improve the

efficiency and effectiveness, but we will have to conduct a fundamental review of america's missions, capabilities, and our role in a changing world. i intend to work with secretary gates and the joint chiefs on this review and i will make specific decisions about spending after it is complete. the third step in our approach is to further reduce health-care spending and our budget. the difference with the house republican plan could not be clearer. their plan essentially low words the government health care bills by asking seniors and poor families to pay them instead. i approached lowers the government health care bills by reducing the cost of health care itself. already, the reforms we passed will reduce our deficit by $1 trillion. my approach would build on these reforms.

we will reduce wasteful subsidies and erroneous payments. we will cut spending on prescription drugs by using medicare's purchasing power to drive greater efficiency and speed generic brands on to the market. we will work with governors of both parties to demand more efficiency and accountability for medicaid. we will change the way we pay for health care. not by the procedure or the number of days spent in the hospital, but with new incentives for doctors and hospitals to improve results. we will slow the growth by strengthening an independent commission of doctors, nurses, medical experts, and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services that seniors need. we believe the reforms we have proposed will strengthen medicare and medicaid and will enable us to keep these

commitments to our citizens while saving as a $500 billion by 2023. an additional $1 trillion in the decade after that. and medicareg, costs rise faster than we expect, this approach will give the independent commission the authority to make additional savings by further improving medicare. let me be absolutely clear. i will preserve the health care programs as a promise we made to each other in the society. i will not allow medicare to become a voucher program that leads seniors to the mercy of the insurance industry with a shrinking benefits to pay for rising costs. i will not tell families with children love disabilities they have to fend for themselves. we will reform these programs, but we will not abandon the fundamental commitments this country has kept for generations.

that includes our commitment to social security. social security is not the cause of our deficit, it faces a real long-term challenges in a country that is growing older. both parties should work together now. to strengthen social security for future generations. we have to do it without putting at risk current retirees or the most vulnerable are people with disabilities, without slashing benefits for future generations, and without subjecting retirement income to the whims of the stock market. it can be done. the fourth step in our approach is to reduce spending in the tax code. so-called tax expenditures. in december, i agree to extend the tax cuts for the wealthiest americans because it was the only way i could prevent a tax

hike for middle-class americans. we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. we cannot afford it. i refuse to renew the again. beyond that, the tax code is also loading up with spending on things like itemize deductions. well i agree with the goals of many of these deductions, from outer shipped to terrible giving, we cannot ignore the fact that they provide -- from a hold ownership to charitable giving, they do nothing for the typical middle-class family that does not itemize. my budget calls for eliminating itemized deductions. a reform that would reduce the deficit by $320 billion over 10 years. to reduce the deficit, i believe we should go further.

that is why i am calling on congress to reform our individual tax codes to the despair and simple. the amount -- that it is fair and simple. i believe reforms to protect the middle class, promote economic growth, and build on the fiscal commissions model of reducing tax expenditures so that there is enough savings to both lower rates and lower the deficit. as i called for in the state of the union, we should reform our corporate tax code as well. to make our businesses and our economy more competitive. this is my approach to reduce the deficit by $4 trillion over the next 12 years. it is an approach that cheese about $2 trillion in spending cuts -- is an approach that achieves about $2 trillion in spending cuts. it calls for tax reform to cut about $1 trillion in tax

expenditures. it could achieve these goals of protecting the middle-class, protecting our commitment to seniors, and protecting our investment in the future. in the coming years, if the recovery speedup, and our economy grows faster than our current projections, we can make even greater progress. tools washington and to hold accountable and to make sure that the deficit continues to -- the debt burden continues to decline, my plan includes a dead failsafe. despite 2014 card that does not project to fall, if we have not had our target, if congress has failed to act, my plan will require us to come together and make up the additional savings

with more spending cuts and more spending reductions in the tax code. that should be an incentive to act boldly now. instead of kicking our problems further down the road. this is our vision for america. this is my vision for america. it is and where we live within our means while still investing in our future. where everyone makes sacrifices, but no one bears all of the burden. where we provide a basic measure of security for our citizens and we provide rising opportunity for our children. there'll be those who vigorously disagree with my approach. i can guarantee that as well. some will argue that we should not even consider ever raising

taxes, even if only on the wealthiest americans. it is an article of faith to them. i say that at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay little more. i do not need another tax cut. warren buffett does not need another tax cut. not if we have to pay for it by making seniors pay more for medicare or by cutting kids from headstart. or by taking away college scholarships and i would not be here without. here is the thing, i believe that most working americans would agree with me. they want to give back to their country. a country that has done so much for them. it is washington has not asked

them to. others will say that we should not even talk about cutting spending until the economy is fully recovered. these are mostly folks in my party. i am sad that it to this view. one of the reasons why i supported the payroll tax cuts we passed in december. it is also why we have to use a scalpel and not a machete to reduce the deficit trade so that we can keep making the investment that creates jobs. doing nothing on the deficit is just not an option. our debt has grown so large that we can do real damage the economy if we do not begin a process now to get our fiscal house in order. finally, there are those that believe we should not make any reforms to medicare, medicaid, or social security out of fear that any talk of change to these

programs will immediately usher in some sort of steps that the house republicans have proposed. islanders down those stairs, but i guarantee that if we do not meet -- i guarantee it -- i understand those stairs, but i guarantee -- we belong and we will face higher health care costs than those it came before us. to those in my own party, i said that if we truly believe in a progressive vision of our society, we have an obligation to prove that we can afford our commitments. if we believe that government can make a difference in people's lives, we have the obligation to prove that it works by making government smarter and leaner and more effective.

of course, there are those who simply say there is no way we can come together at all and agree on a solution to this challenge. they will say that the politics of the city are just too broken, the choices are just too hard, the parties are just too far apart. after a few years on this job, i have some sympathy for this view. [laughter] but i also know that we have come together before and met big challenges. ronald reagan and tip o'neill can together to save social security for future generations. the first president bush and a democratic congress can together to reduce the deficit. president clinton and a republican congress battled each other ferociously, disagreed on everything, but found a way to balance the budget. and in the last few months, both parties have done together to

pass a historic tax relief and spending cuts. i know there are republicans and democrats in congress who want to see a balanced approach to deficit reduction. even those republicans i disagree with most strongly i believe our sincere about wanting to do right by their country. we may disagree on our visions, but i truly believe they want to do the right thing. so i believe we can and must come together again. this morning, i met with republican and democratic leaders in congress to discuss the approach that i laid out today. in early may, the vice president will begin regular meetings with leaders in both parties with the aim of reaching a final agreement on a plan to reduce the deficit and get it done by the end of june. i do not expect the details or

any final agreement to look exactly like the approach i laid out today. this is a democracy. i am eager to hear other ideas from all ends of the political spectrum. and although i am sure the criticism of what i have said here today will be fierce in some quarters and my critique of the house republican approach has been strong, americans deserve and will demand that we all make an effort to reach our differences and find common ground. this larger debate that we are having, this larger debate about the size and the role of government, it has been with us since our founding days. during moments of great challenge and change, like the one that we're living through now, the debate gets sharper and more rigorous. that is not a bad thing. in fact, it is a good thing.

as a country that prizes both our individual freedom and our obligations to one another, this is one of the most important debates that we can have. but no matter what we argue, no matter where we stand, we have always held certain beliefs as .he americanamericans we believe that in order to preserve their freedoms and in our own happiness, we cannot only think of ourselves. we have to think about the country that made these liberties possible. we have to think about our fellow citizens with whom we share a community. and we have to think about what is required to preserve the american dream for future generations. this sense of responsibility to each other and to our country,

this is not a partisan feeling. this is not a democratic or republican idea. it is patriotism. the other day, i received a letter from a man in florida. he started off by telling me that he did not vote for me and he has not always agreed with me. but even though he is worried about our economy and the state of our politics, here's what he said. he said, "i still believe. i believe in that great country that my great grandfather told me about. i believe that somewhere, lost in this quagmire of petty bickering on every new station, the american dream is still alive." we need to use their dollars here, rebuilding, refurbishing,

and restoring all the things that our ancestors created. we must do this together. no matter of this -- no matter of the color of the state one comes from or the side of the aisle one might sit on. i still believe. i still believe as well. i know that, if we can come together and uphold our responsibilities to one another and to this larger enterprise that is america, we will keep the dream of our founding fathers alive in our time and we will pass it on to our children. we will pass on to our children a country that we believe in. thank you. god bless you. and may god bless the united states of america. thank you. [applause]

>> house republicans reacted to the president's speech with a press conference on capitol hill. we will hear from budget committee chairman paul ryan and ways and means chairman paul camp. this is 20 minutes.

>> good afternoon, everyone. late yesterday, myself and chairman ryan and chairman camp were invited to a front-row seat to the president's review of his budget. there was a half an hour history lesson on blaming everyone on the country's fiscal woes but himself, attacking the prosperity budget, and setting a new standard for class warfare rhetoric. i do not know about my colleagues, but i sought -- but i thought to myself, " did i miss lunch for this?" although i was glad to receive the invitation, this was

something i could have waited to watch on television. this was a speech that prioritizes the next election over the next generation. it was a speech that was heavy on aspirational goals and exceedingly light on specific proposals. those that were present deserved comments. first, at a time when millions of our countrymen remain unemployed, the president, again, proposes a tax increases on job creators. if i had an opportunity, i would say, mr. president, how do you expect to help the job seeker by punishing the job creator?" i know of no nation that has ever taxed its way into job creation. the deficit is the simpson.

it is spending that is the disease -- the deficit is the symptom string it is spending that is the disease. medicare is on an unsustainable path. however, putting price controls and rationing on steroids is not the answer. the president passes on social security claiming that it does not appear to be any type of an immediate fiscal threat appeare. tell that to all the americans scheduled to receive a 22% automatic benefit cuts in the years to come. so, again, very light on specific proposals. i will touch upon one more and then yelled to my colleagues. the president claims to put together a debt failsafe.

it can only lead to either a completely gutting of national defence or adding implicit huge tax increases on those who're already explicit in his plan. to ensure that our social safety net, which he been a president implicitly admits is going broke is saved for future generations. our path to prosperity is about saving the american dream for the next generation, ensuring that our children have greater opportunities than we have. now i would like to yield to the republican leader.

>> we had a very serious discussion with the president. the request really was for all of us to be mindful of the challenges that we face and to have an adult conversation to try to come to a resolution. then, what happened after that, the president goes and delivers his speech in which the only concrete proposal that he proposed was raising taxes. that solution falls far short of dealing with the kind of crisis that we are facing as far as the debt concern in this country. as a jab just said, raising taxes is not what we need right now two days before tax day, especially while we are trying to get job creators back into the game. we are serious. as you know, we have the ryan

budget plan on the floor this week. we laid out our vision in specifics as to how to manage down this debt and to get our economy back on track and to repair the future for our kids. that is what we are about. we are serious. we care about these entitlement programs. that is why we say you have to have a safety net for those who need it, but not for those who do not. we have spoken to the specifics, mr. president. we are serious. where are you? >> i am very disappointed in the president's. i was excited when we got invited to attend his speech today. i thought the president's invitation wasn't all a branch. instead, what we got was a speech that was excessively partisan, dramatically inaccurate, and hopelessly

inadequate to address our country's pressing fiscal challenges. what we heard today was not fiscal leadership from our commander in chief. what we heard today was a political broadside from our computer-in-chief. last week, when they -- from our campaigner-in-chief. last year, in the absence of a serious budget, the president created a physical condition. with his budget, he disavowed the fiscal commission. he admitted that he ignored all its recommendations. now he wants to delegate leadership again to a new commission. how are we to expect different results? and the measurements of success of this new commission are lower than the measurements of to assess from the last commission. we need leadership. we do not need a doubling down

on a -- on the failed politics of the past. this is very sad and very unfortunate. rather than building bridges, he is poisoning wells. by failing seriously to confront the most predictable economic crisis in our nation's history, the president's policies are committing us and our children to a diminished future. we are looking for a bipartisan solutions, not partisan rhetoric. when the president is ready to get serious about it, we will be here working. exploiting people's emotions of fear, envy, antianxiety is not hope. it is not changed. it is partisanship. we do not -- we do not need partisanship. we do not need demagoguery. we need solutions. and we do not need to keep pointing to other people to make tough decisions. if we do not make tough decisions today, our children

will have to make much tougher decisions tomorrow. so i am seriously -- i am sincerely disappointed at the president at the moment that we are putting ideas on the table to engage in a pop -- in a thoughtful dialogue to fix this country's fiscal problems. he makes it that much harder for the two parties to come together with respect to get things done. >> thank you. i agree. much of the speech was rhetoric that was unnecessary, and helpful, unproductive, far too partisan. i think it is helpful that the president admitted that his first budget did not go far enough. clearly, it did not.

tax reform is something that i have been advocating, that we need to look at the entire code. but $1 trillion in new taxes, the higher taxes on small businesses, at the rate he is suggesting, is about half of the small business income. we need to those small businesses paying employees, not higher taxes. i stand ready to continue to work on these issues, but i think that much of the approach made it harder for us to do that. i think that tax reform is fundamental to getting our economy moving again, getting the kind of job creation we need to help grow. that will assist in the difficult challenge we have about addressing our debt. thank you. >> i, too, was very discouraged this afternoon when the president gave his response, when he came to talk again about

a budget after he had given us a budget just a little over a month ago. i was excited to think that perhaps we would have an opportunity to have some creative ideas. i was excited when i first came here as a freshman, to hear the president and his state of the union speech, knowing that this country was in a debt crisis. but we did not hear any solutions in that speech and neither did we hear solutions today. what we heard was political rhetoric. we heard scare tactics. i am very disappointed. i think we are already four democrats and republicans to get the country on the right track. and to get us back to prosperity. i know that during the times i have sat back in the district hearing from my businessmen and individuals, people are scared. they do not need the leaders here scaring them. we need to give them hope. and the past the prosperity budget gives them just that. i hope that come in the upcoming

week as we begin to talk about this budget, that we will have leadership from the president on dealing with this issue in a very positive way and giving people hope rather than the same old political rhetoric and scare tactics. >> questions? >> when you talk about rhetoric and scare tactics, it sounds like you are assuming he will not stand by this. do you agree with that? >> first of all, i have said that the president is not serious because his proposals are a far cry from trying to tackle the tough problems we face. we have a detailed specific plan on the table that we will be building on this week. the president's proposal is not a comprehensive fix. it does not address the entitlement programs. the only concrete thing he came out with a was to raise taxes. again, this is the tired old way to raise class warfare, and the

president does not serious. we are at work here. we are serious. we have put forth their proposals and we would like to have the president join us in a serious discussion to fix the problem. again, this is all we have seen. one time, two months ago, in the state of the union address, there was lofty rhetoric without any follow-through. this time, no, we are getting into the partisan attacks and the rhetoric with one concrete proposal on the table, which is raising taxes. that is unacceptable. that is not serious. >> this is not even a plan. this was a speech. this was a plan to have a bunch of other people set up a commission to come up with a planned and have spending and deficit targets that are less ambitious than the last planned he came up with to have a commission to come up with a plan. so this was not a plan. this was punting.

he did so in the budget and now he is doing so on another commission. >> mr. ryan's plan does not focus on social security. what do you propose that the republican party will do to fix those in the next two years? >> in the path to prosperity budget, we have a resolution. we at least acknowledge the problem. approaches have been discussed. i will let chairman ryan speak to his budget. the president says that it is not a problem. it is not a problem, then you accept the status quo. it is an acceptable to republicans. >> i talked about this three hours ago. i was excited because i thought he would give us something on

social security, a plan. the reason we put our social security trigger in our budget is because we wanted to be delegate to make sure that we could get toward a bipartisan solution toward social security. we have different opinions on health care. everybody knows that. we do not believe in government rationing or a government takeover of health care. what we were hoping -- hoping for was possibly getting some bipartisan agreement on another entitlement program that is going insolvent like social security. so we put a trigger that says, if the trustees are going insolvent, which it is, that requires the president to submit a plan, the house to submit a plan, and the senate to submit a plan. that would lead this to move towards solutions. that was the one thing i was looking forward to his speech when given his invitation to come and attend this. all we got was what he wants to do, not what he wants to do.

chalk that up as one more disappointment. >> you have taken this president to places where he did not want to go on a variety of issues. what makes you see it -- what makes you think that you cannot do it here? >> the deal is this. why did not the president take the opportunity once again that he was given? why did he not lead? we want to go in and solve this problem. again, we defied all political convention by laying out what we have done in the budget this week. paul and his committee will be on the floor advocating for these very specific proposals. why is it that we are leaving and the president is not. >> back to the question of tax reform, there seems to be consensus on what the president

says about clearing out the code and so on. but in the fiscal commission, some of that revenue was dedicated toward fiscal reduction. what is a tax increase? revenues orsed increases in rates? >> there is the entitlement fees here. as far as the tax revenues are concerned, we are proposing a change for reform so we can grow this economy. it is not just waiting the magic want expecting revenues to grow. it is putting in place an environment? lines of that businesses can begin to invest, create jobs, and grow. >> the president never said he would lower rates. the only thing he said about taxes was to increase them on a

certain part of the electorate. he wants higher rates on half of that income which would be small business income. he did add the peas that he thought individual tax reform ought to be on the table, i think, largely because, in order to get economic growth we need, you have to include pass through entities, which includes partnerships and others because they file as individuals. if you want to have a positive economic impact, you want to make sure it they get that. he wants higher rates. he wants $1 trillion in revenue. our approach is that we want to have revenue-neutral tax reform. that is the way you get it done. but james baker and richard gephardt, before the joint committee on taxation, they both said you have a much better chance of getting the

fundamental tax reform if it is revenue-neutral. >> the president took some hard swipes at the rye and plan i've talked with senator simpson after the speech. his statement was "pray for the gang of six." [laughter] i know you had a lot of issues, but that was senator simpson's statement. is he right? is the only solution here is to pray for the gang of six? >> i pray for many of my colleagues. [laughter] here is my point. again, the deficit is the symptom. spending is the disease. the president talks about shared sacrifice. the problem is on the spending side.

we know that in a post-war. , revenue averaged 18.5% of gdp. they have recently been done because of the recession. we believe it is exasperated because of the president's policy. revenue comes back and largely increases beyond that point. it is spending that goes from its historic 20% of gdp to 40% over the next generation. you have to double taxes on the next generation, crush the economy, the crush of jobs, and frankly lose the american dream if you define as your children having greater opportunities and a higher standard of living than you have had. when you see shared sacrifice, the only thing we see is massive tax increases when spending is the problem. therefore, it is a nonstarter, thank you. >> chairman brian? -- chairman ryan?

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> massachusetts gov. developer patrick to more on tomorrow's "washington journal." and indeed president of the american hospital association. "washington journal" begins live at 7:00 a.m. eastern time on c- span. >> to be a parent means that you are training the people you cannot live without to live without you. >> the college admissions process, the sats, college rankings, financial aid storms -- andrew -- financial it forms

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with everything that we have covered since 1987. it is what you want when you want. >> the house rules committee worked on bills for next year's budget ahead of tomorrow's floor debate. each presented their own budget proposals for fiscal year 2012 which begins in october. this is 2 hours 20 minutes. the rules committee will come to order. we are very happy to welcome the distinguished and understated share of the committee on the

budget, my friend mr. ryan and -- is mr. van hollen not going to join us? any prepared statement will be put in the record in its entirety. please join us, mr. van hollen. please proceed. >> thank you, mr. chairman. first of all, i want to start by thanking my colleague mr. van hollen. it is not often that we agree on the budget. there is something that we agree that we can have a full and rigorous debate that is civil and orderly. we have had that and expect we will continue to have that going into the floor. we have an enormous challenge on our hands. i will dispense with my written

remarks and ask that it be included. thank you. heading towards a fiscal crisis in this country. that is because we have a mountain of debt that will crash our economy. the numbers are pretty clear. we hear it from independent-non- partisan number-cruncher's all the time, whether it is the general accountability office, the congressional budget office, or what have you. we believe we have a moral obligation to our constituents, to our country, to the future generations of this country to get this under control. there are four things that guide us, of four objectives that we are trying to achieve with their budget. number one, get the job creation back on track in america. get this economy growing again. that is why we call this the

path of prosperity. there are a number of economic reforms in your current getting the deficit and debt down in itself is job creation. every year that you have a tax death -- a deficit, it puts a chilling effect on hiring in america. it tells businesses to wait, do not do anything, because your tax rates will be worse tomorrow because washington is out of -- is out of control. lower tax rates. we have some mass of corporations in america making billions of dollars in america paying no taxes legally and some

businesses struggling, making some money, and paying a lot of taxes. not fair. let's clean it up. we want a flatter, fairer, more internationally competitive tax system. the second thing we want to do is fulfill the mission of retirement security. you cannot look anybody in the eye with a straight face around here and tell them that medicare, medicaid, and social security are not the big driver of our spending. number one, ask any person on these programs, doctors are not taking patients anymore because of price controls. providers are -- cutting back. when medicare and medicaid were created, men lived to their sixties and women live into their 70's. the program costs and a whole lot more now than we thought it would when it started.

no. 3, when medicare was greeted, baby boomers were teenagers. now they are retiring and they are doubling the amount of retirees in the program. no. 4, health care costs are skyrocketing, growing twice as fast as our economy. it is on a collision course with their budget. it is the primary reason we're going into a mountain of debt and you have to address that point considering that government spends 60 cents on every dollar on health care, that is one of the primary drivers of inflation. the answer is not to put more control in the hands of government and have them to price control. price controls do not work. the answer is what has always worked, to go after price increases -- competition, choice. the kinds of reforms we talk about are the proven ideas. the medicare prescription drug benefit came in 40% below cost projections because it has choice and competition. it puts the medicare beneficiary

in the center of the equation where they have the power. it is not favoritism from a government formulaic writer. the patient is the beneficiary who has the power mission to is to fill the mission of entitlements security and bring solvency to these critical programs. no one who is 55 and above will see a change. i reforming this program for future generations, we can keep it intact for current generation's. no. 3, our social safety net -- it is tearing apart by the seams. it is on an unsustainable path right now. it is not working right. throwing more money at broken systems does not fix those systems. we want our social safety net to be a springboard to self- sufficiency, not a handout to dependency. we fundamentally believe that the kinds of reforms we put in

place for welfare in the 1990's, which were so successful, should be replicated to other areas for those in need so that we have welfare reform that is geared to the 21st century. it is adapted, resilience, that is sustainable and it is geared not to keeping people on welfare, but getting people back on their feet. it is to get people into educational training so they can get into careers that are good for the economy of the 21st century. and the final point is this. of all points, this is a plan to pay down our deficit. my parents' generation was world war ii. we have had great depressions and civil wars. america has had its share of problems. every generation has conquered those problems, has taken them on, did not deduct from the problems, solving them so that

their children could have a better life. for the first time in the history of this country, we are on the brink of severing the legacy of leading the debt -- the next generation better off. i am not saying that theoretically. every year, there is a long-term production. they run their models that they got the economy further. two years ago, they told us that the economy crashes in 2015 for because of debt. this year, they are telling us that the economy will crash into thousand 37. -- will crash in 2037. that means our kids will experience it when they are my age. one of the worst experiences i have had, one of the most troubling things i have seen, is the financial crisis of 2008. most of us were here then. it was like it happened yesterday. millions of people lost their

jobs. trillions of dollars in wealth just vanished from savings. we are still reeling from this. that caught us by surprise. none of us saw this coming. out of that emerged pretty ugly legislation. our debt crisis is worse. a debt crisis would make that look like a walk in the park. here is the rub. we see this one coming. we know it is coming. we know it is happening. if we do not do what we need to do to prevent this a debt crisis from happening, shame on us. if we can get together to fix this problem because of politics, then we are really abdicating leadership. we are feeling constituents. we're failing our children. and we are failing this country of leadership that it so desperately needs at this hour of crisis. i have seen a lot of political rhetoric just today. that will not fix this problem. so we want to come to the floor

with a plan to do that. i appreciate your consideration and i would appreciate it if you would take the amendments as well. >> thank you, mr. chairman. i want to start by thanking the chairman for the conduct of the conversation, the debate, and the proceeding in the budget committee. as paul indicated, we had a vigorous and spirited debate. but it was a civil debate. choices were laid out clearly through the amendment process that we had in the committee. i want to thank him for that. i want to thank all the members on both sides of the aisle who participated in that, as well as our staffs. we all love this country.

the question is how do we move forward in a way that keeps our country dynamic and makes sure that we preserve the exceptional is and that is at the root of the country. we have differences of views as to how we move the country forward. there are fundamental choices. but we all agree that we should come together to put a plan before this congress that reduces the deficit. the question is not whether we do that, but how we go about doing that the democratic alternative that we put forward will strengthen the economy and it will reduce the deficit in a steady, predictable way. it achieves primary balance in the year 2018. it reduces the deficit over the 10-year period beyond the

president's plan that was introduced. and we'd do it without creating destruction in the economy and preserve what we believe our fundamental american values and priorities. we believe that we have had a strong and dynamic economy for two reasons. one reason is that the freedom that people have to pursue their entrepreneurialism dreams and ambitions is the key driver in the economy. but it is also true that there are some things that no one individual or one corporation can do alone and requires a strategic national investments. the united states of america has become an economic powerhouse in

part because we have been able to come together as a nation and a people to achieve things together that no individual or " -- individual or corporation can do alone. we have done it since the creation of the republic. we come together to go to the moon. we have come together to build an interstate highway system. we have come together to have a research and development budget that helped create the origins of the semiconductor industry. those things were accomplished because, as a country, we decided to take risks that no corporation would be willing to take. that has been on important part of what has distinguished the united states of america to this day. we want to retain both those parts of the american success story. our budget invests in america. the budget put forward by the

republicans in the house decimates critical investments in the things that have made america strong and are necessary to make america strong going forward. educating our kids -- everybody recognizes that if you want your child to have a better chance in this country, you have to invest in education. we need to invest in science and research and nih to cure diseases like cancer and other diseases. we need to invest in the other sciences to continue to make our economy grow. the spinoffs of those investments are incredible. we have a "make it in america" agenda that says that we need to continue to make those investments. the republican budget cuts deeply into those investments. in fact, if you look into the cbo projections that were done in the republican budget in the out years, at some point, the

entire budget that we now have for discretionary spending, defense discretionary, is essentially wiped out. it goes to a lower percentage of gdp than defense alone is today. it wipes out the rest of government activities. that is in the cbo. we believe you need to make those investments and that is what we do in this bill while, at the same time, we say that, as you go through the budget, you have to make decisions to get rid of the duplication, to get rid of some of the wastes out there, the general accountability office identified areas. we have to tighten our belt, but we should not, at the same time, throughout those investments that helped make us an economic powerhouse, especially at a time when our international competitors, china, and india and others, are beginning to emulate the model that helped empower the american

economy. that would be a big mistake. yet to the republican budget slashes investment in that. if you project far enough out, it totally eliminates the portion of the budget 100%. no. 2, tax reform -- we believe that we need to do tax reform. we have tax reform in our budget. as the chairman said, we have to cut out clutter in the corporate tax reform. there are things that we can sign on today. we do not need any justification for providing too big oil companies with special tax breaks. my goodness, we have fulfilled our tank recently. >> prices are at an all-time high and profits are higher. they do not need another give away from the united states congress. we believe that we can immediately begin to close some of the loopholes that reward

companies for shipping american jobs rather than american products overseas. we do not need a steady to do it. there are the reforms that need to be made and we call for that in our budget. what we do not call for is another round of tax breaks for the wealthiest people in this country. our budget says that, at the end of 2012, we should go back to applying the same tax rates to the top 2% income earners that were in place during the clinton administration. that was a time when we had very rapid economic growth. 20 million jobs were created during that time. for anyone to suggest that relatively minor differences in the top marginal tax rate is the key economic drivers of the economy is taking a view that is distorted. it is counter to the facts.

we have seen a net loss by the end of 2008 of 650,000 private sector jobs. we say we need to have shared responsibility and that people at the very high and of the tax letter can contribute more to this great country. the chairman mentioned tax reform. let me be very clear about what it does. it's as the ways and means committee, you will lower the top rate from 35%, where it is today, to 25%. it is almost a 30% tax breaks for millionaires, billionaires' -- whatever it may be. here's the catch. with respect to that part of the budget, it says you will do that

peace in a revenue-neutral way. that will mean tax increases on middle-income americans, to give additional tax breaks to folks at the top. we do not think that is tax reform. we call for tax reform that protect its middle-income americans, not that which attacks the very wealthy at the expense of middle income americans. health care -- we obviously had a very spirited debate in little more than a year ago over the affordable care act, the health reform bill. there is a reason that the congressional budget office said it would reduce deficits over time and there is a reason that people, like dr. rivlin and so many others came before the budget committee and said it would be a huge mistake to

repeal the health care reform bill for a lot of reasons that we debated. it would get rid of the protections that are in place now for some many patients and consumers. also, repealing it would have the effect of increasing, per- capita, health care costs in the future because that legislation contains hundreds of different proposals for bending the cost curve in health care. medicare and medicaid are not islands into themselves. they are part of the entire health-care system. if you want to reduce costs in medicare and medicaid, yes, there are things you can do, but you also benefit if you bring down costs in the whole system in fact, if you look at the rate of increase in health-care costs, they have been pretty similar. the medicaid growth of health care cost is lower than the national average.

the private market skyrocketed between 2000 and 2008. industry profits quadrupled. we believe that you have to continue to work through the changes that were made as part of the fair and affordable care act. the republican proposal eliminates that process. at the same time, it eliminates a process designed to contain costs. it shifts those costs onto our seniors and others who rely on both medicare and medicaid. it does it in a very clear way. it says we will get rid of the medicare program. seniors will now be required, forced to go into private insurance market.

they will be given a voucher of premium support or whatever you want to call it. henry aaron, the father of premium support, said it was like a voucher. no matter what you call it, it ends up saving money for the treasury by throwing the entire risk and burden on the senior citizen. seniors under this republican plan will now have to pay a huge amount of the costs. the reason henry aaron and others who originally came up with the idea premium support said that this was not premium support is because it does not support the premiums. when you go into the private health-care market, private insurance company will charge whatever they want. medicare will not keep pace with the premium they charge. in fact, that is how they save

money, shifting the premium to seniors. it has been said by many people that we are only offering seniors the same deal that members of congress have. it is just not accurate. in fact, there is a statement out today that the republican member made that comment on sunday. i looked at it. it is false. it is false for this reason. federal employees, members of congress are called -- are given what is called "fair share." we share the risk of rising health-care costs. under the republican budget, they are not shared. seniors eat those costs. so this republican budget give members of congress a much better deal than it gives seniors. we believe that there are alternative methods, some of which the president talked about today, to reducing health-care

costs. we believe it is a mistake to go down the road of the republican budget. i would urge you to take what we believe is a more balanced approach. i will end by pointing out that the co-authors of the fiscal commission said, "falls short of the balanced approach needed to achieve the broad bipartisan agreement necessary to enact a responsible plan." we believe that we have a balanced and responsible plan that accomplishes the goal of job creation, tax reform in a fair way, and addresses the question in medicare and medicaid without asking seniors and the most of all mobile people in this country to bear all the risks in the process. >> thank you both for being

here. thank you for your hard work. i will assure you, mr. van hollen, that you will have an opportunity on the house floor to make those arguments. we will let the house work its will. there has been a lot of attention focused on the 96 newly-elected members in the house. last week, i had a chance to meet with a guy named matthew hancock, a freshman member of parliament in great britain. he talked with me about how nick clegg and david cameron have successfully come together. the reason i was just thinking about this was, when mr. ryan mentioned this notion of headed towards the edge and we see it coming, it is right across the pond. that is where we see it happening right now. these two have come together and boldly tackled the issue of spending and they have taken on

this extraordinary challenge of painful cuts. guess what. in years past, we all know that the class warfare arguments and the notion of saying, with all due respect to my friend, republicans wanting to throw people in the streets and depriving children of need to better their, they have gone through that. but there is support in great britain right now for what could be described as a draconian steps that are being taken. why? because there is a realization that they, portugal, greece, and other countries in the region are facing it, and other countries are being drawn into that. it seems to me that we need to

realize that we can not only see what is coming, but point to what is happening right now. i want to do everything i can to ensure that united states of america does not face a situation that is as difficult as the one that they are facing now. i also want to take a moment to touch on this issue of revenue- neutral and the ramifications. i saw mr. ryan shake his head, as i did come out to the notion that tax reform automatically means a tax increase on middle class americans. that is a stretch. it means that -- i happen to be one who would argue that bringing about the marmargins tt we were talking about actually

not be revenue neutral. i am convinced that, if we have corporations today that are paying zero simply taking on responsibility and corporations today that are struggling to keep people working while paying taxes, i am convinced that we would, if we were able to reduce the top rate would actually create an increase in the flow of revenues to the federal treasury. this kind of marginal rate reduction under presidents kennedy, writing, and bush, has in fact been successful. we can go through all the arguments of scoring at all, which i do not think is necessary. let me also say there is something that i have addressed with both of you and worked on for a noblnumber of years. when we went through several

years ago when our former colleague jim also was leading the budget committee, the overall global view of budget process reform -- i had an amendment that had the highest number of votes of any process reform proposal that was out there. i got two hundred two votes. it would establish a biannual budget, a two-year process. last few months, my colleagues and i and lots of members of this newly-elected freshman class, including some democrats, have joined, making this a very bipartisan effort. i would like to say that this would go a long way toward dealing with going to a two-year but process and save tremendous amounts of taxpayer dollars. the ability to engage in

planning would be greater. i would like to let both of you know that i believe that -- i am not letting up on this, having worked for years on the issue of going to a two-year process. i know there are many states that have a greater role in leading members of this body, democrat and republican alike, to be supportive of that notion. i we know we will do something they have not done. we will go through a budget debate. i will recommend that we make a substitute. there are a wide range of substitutes. i can count five or six of them here. we have the republican committee substitute. i think that to consider as many

of these as possible so we can have the kind of debate tomorrow and friday and make a determination as to where we are going to go. i was managing the rule on the cr minutes before the president delivered his remakrs. i was encouraged that he is talking about the need for entitlement reform. one party controls everything. i hope this is being done now.

we have been able to do this on a number of things. i think the president realizes how serious the problem is. offer anyike to remarks. >> i will be brief. i wo uld like to respond but i won't. i guess three things. i will save it for later. i am glad he is putting out the budget. the majority does not have to do that. ther eis always pressure not to put a budget out ther. i think it shows wisdom. it helps showcase opinions. it is my inention they will get

into the budget process reform. we will get some ideas from both side of the aisle. i am in favor of the budget. i do not know where you are on this. >> we will work together in a bipartisan weay. >> i know conrad is in favor of it. i think there is an opportunity here on some bipartisan solutions. i will be that. >> thank you. and the whole issue of the biannual approach, i am very open to the idea.

i look forward to considering that. i think the president is very interested. he is trying to find a path forward here. >> annual medflight to find a path forward. the question is what choices we make in that process. he mentioned taxes. when the tax rates went down, it does 2003. the heritage foundation would create huge job growth. it is did not happen. it was the opposite. the heritage foundation cannot the other day. they passed the republican budget. it creates a lot of jobs.

i think even the republicans would can see their projections. i just want to say this about the tax reform. those are just the facts about what happened. you have stronger economic growth. no one is arguing that by increasing the marginal space. this is that the main economic driver in the economy. we are going to move forward to get that done. there is a very small slice of overall revenue. the republican plan does not

drop the corporate tax rate. it is raising taxes on middle and come. >> it is the ways and means committee. >> we eagerly anticipated that only be here is there is amazement. there is your thoughtfulness about how to approach it. there is a lot at risk by how successful we could be.

>> thank you. >> he is welcome appear. >> he went on the stage. >> thank you. i will add to it.

i would include those same accolages. -- accolades. we are all here to talk about the philosophy. i had no clue if anyone spent 16 years. hundreds of employees were trying to make ends meet. i very quickly ballot there is a philosophy that i developed. that was that the families have a job. there is a careful conscript of looking forward and making sure we subscribe to principles.

customers would buy our products. there was an equal opportunity in the marketplace. we had competition. they had once about what they would buy. there were a set of principles that would work. we did not know how they can better everyone's life. we knew was that the people who

had a job and are trying to create more jobs just like when i was in the private sector seems to have an opinion about the factors that are played out in front of them. they followed the same lines that i have learned about competition, the market place, and how to do things. it is how routinely we ignore their feedback about taxes.

we are looking at the document here. it reduces the debt and puts the nation on a path to get it off. page 20 stupack is for families. a large chunk of this is for

home mortgages. in large majority was in power for 40 years. i believe that despite our opportunity is that it could sell.

it does not create goods and services. we should reinvigorate the spirit of entrepreneurship, and self-reliance and opportunity for people to have to dig deep with the near own means to make it work. >> i appreciate gentleman. with that said, we serve as cochairs for the down syndrome caucus. we are very aware that we recognize that people cannot

take care of themselves. we do recognize there are seniors. we recognize there are poor people. my focus then i make today was not for those who cannot take care of themselves but rather a challenge for everybody. we need to bring a challenge back. it to give them not only of the advantages of the next generation to a successful way of life. i am lucky. lucky to have opportunities

that have given the advantages. i have had an opportunity to help others. i hope what we would express is with the american public. there was the ability to translate that. it was with a way to ensure that we remember it those. we would suffer an intellectual disability. i think there is balance.

it was a chance to tell that we would not join the league of nations his spend too much and become dutch shares -- dead doors - debtors. i think both of you for being here. >> i will not bore our

colleagues with reiteration. it is the very last. there was 13 trillion dollars in private debt. we took a large chunk. it consisted of home mortgages. if the budget to magically funding for public housing assistance, here are some

neighborhoods. they anticipate that communities would meet the needs of their residents. what in this budget is going to help all people. more than 40% of the public includes children. is there anything that will hurt?

we questioned each other in a favorable way. this has been a disaster. those that have lost their jobs and those that spend the last day to take care of themselves. there are those the supper a disadvantage. it was a chance to go in a new direction.

it is unemployed. i believe they will provide you that the back. i'm willing to listen to it. thank you for being here today. >> we appreciate the hard work. i will say this for tomorrow.

a couple things i like to make clear. i am concerned about the policy makers. we understand the medicare issue. we have been concerned enough with the notion that a lot of people who are physically and an

able to go into the private insurance market will have a devastating effect. i think destruction is on medicaid. do you agree? >> this is particularly poignant. what i see is that we have a system going broke.

the system implodes because of the baby boomers. they will not have a medicare system. this was to empower the individuals. what we do is preserve medicare. most of us have talked about it. do not you think it would be appropriate for members of the population to have available to them a system like the members of congress? >> we do not have a lot of time.

is this plan to cover the cost? >> there is no voucher. there is no doubt share. it provided to an individual. what we propose is this for support. it was correct for them. we can call it anything.

we are saying the we are saving the medicare program. it is not cover the cost and medicaid. heaven forbid we go through the awful thing we went with unemployment. >> it is extremely important to me. this in the same way that democrats and republican congressman say the welfare program.

it is some greater flexibility. it is different. >> every economist talks about the damage. it saved a lot of lives. this is not a committee that deals with saving lives. i want to tell about the taxes. >you plan to do if with seniors.

you are pretty lavish with corporations. the asaph we could afford to do it. -- we asked if we could afford to do it. >> i disagree. we do address this issue. we believe it ought to be decreased to 25%.

the fact that corporations has to pay no taxes. >> they have to pay their fair share. >> we are working for mr. van holloman. we have a few surprise winners. he had recently done the number. nothing could generate significant job growth.

what we salt was this. what happened is that the job growth in the bush administration is 8 million new jobs. >> 8 million new jobs created this. we were well on our way. i am afraid that what you are

talking about putting here today is i do not see a create this kind of jobs. we cannot create a single job. i do not think this is one that is here. do you have any comments. we pay no taxes. >> as long as you indicated, we had a higher tax rate. the economy was roaring. it cuts 8 million jobs.

it cut 20 million -- 20 million jobs were created in the clinton administration. higher tax rate create jobs. people who are producing jobs, that is not the new driver of what makes industries grow. any counterfactual -- it is counterfactual to say that is what happens. let me say is that it is there again.

we could do it right away. they can deal with it. individual income taxes will reduce by 40%. i am looking forward to seeing the proposal. we had an amendment in the budget committee that said let's not do that. i want to say one thing. seniors will not be able to go into medicare under it this. when the costs are rising, when we need to do is not

transferred all that risk and cost on to seniors. the president is right. baking, what ever they blunt. -- they can call it whatever they want. you get support for the premium. you get rid of medicare. it means as premiums go up, get support.

it has been a fact check. it is false paid. under the benefit plan, there is the fair share one. that means the federal government pays a fixed share of the premium. as the premium goes up, the risks to the beneficiary is fixed. that is preen support. the whole way this plan makes money is to break the idea premium support.

it still go at a tinny little rays. -- raise. >> more resources for those who are sicker. the current system is going to go broke. >> he had given them an extra dollar. he would have to drop that health insurance. it is what ever we have to give them.

one other point is this. and wanted to talk about 2008. at that nobody will argue. this is the big grocery bill. why are you in this bill doing away with some consumer protection. >> i think if there is one objective that they will appreciate that it ensures that we will continue the bailout mentality.

it did not provide any greater flexibility. kinds so there is not the of ability for the regulators. he did not -- the bill does not empower regulators to do the job. they did not do their job. this is an interesting play. >> thank you. do you think this would take place? >> this is another word -- you

have a pension for misnaming things. you claim that what republicans are proposing is medicare termination support. i think your vocabulary is rather remarkable. i am sorry our colleague from new york walked out. i have often said that the divine comedy and the worst

place in hell is easier for lawyers. people that tried to spare the elderly of going to be held accountable. i truly believe it will happen. there are those that remain neutral. >> that is not a problem, it is it? >> a want to point out it is put into effect by democrats.

pay taxes. it was just a few ordinarily wealthy. income. differenct they wanted to reduce premiums. the find is a little strange. the proposal will increase it.

the senate going up dramatically. they have projected $800 billion fund. all of a sudden the deficit became $1 trillion. i think the american people have seen through much of the hyperbole.

but he has been delaying an announcement to the american people. i think it has gotten through. we have many more people paying attention to what is going on in washington and many more people engaged. there are responsibilities that have occurred in washington under democratic control. we are tired of the

commentary. fuel just let the government have a little more control of your live, pretty soon the government will have an idyllic situation. it is the worst thing from this country. this country was founded to provide the liberties. you can take the other way. i am sorry that sl everyone mining claim to fame. they are looking for a solution.

i hope you'll be able to adopt this budget. i just want to respond to a couple of things. i would be very careful about luxury. it is by the republican national committee.

there is the survivability of medicare. have a long speech. that would be little more cautious. the issue of medicare -- here is how i understand it. i want to make sure we are all clear. if this were to be passed, it

was seized to exist. they found $8,000. it should to support a senior citizen. >> for those of us that challenges as well? >> medical inflation is very different from regular inflation.

it is much quicker and higher. and i have a pre-existing condition or to. --two. >> we have just gone into the first of two boatvotes. i want to continue the hearing. in the members to apply to go down well obviously have 25 minutes. i encourage as many members as possible. why would we be concerned about medical inflation?

we continue to maintain with the costs. with the things the way they the support is not with that increase. what am i missing? >> we are missing that under the current status quo is that it goes away. >> with respect, it is will be done by the time that we are being told that there may be some financial difficulty. what am i misunderstanding?

why shouldn't senior citizens bay concern? >> they would see no change to what they have counted on. >> those of us who are 55 or under, we would be going into a new system. it means that we will have to pay more and get less. >> you will see a saving of the system. there are many patients out there right now that cannot find a position.

>> it is there. the system has a guarantee of quality. you want to end of medicare. >> there is a lot of health care. it is marketed as the plan. this terminates the option of seniors to stay in the medicare program as we know.

it changes it into the kind of plan we are talking about. it would rebuild their rising costs of health care. he has been clear about how it will do it. >> a me raise one of the points. he mentions a law that at run against democrats for some of the reforms that were made and medicare. we achieve savings by eliminating over payments.

we used some of those savings. there is a doughnut hole. it immediately eliminates the effort to close. the end of the effort begins now. it is based on how well they are you do not have to worry. >> i caught it. we take the saving that at

taking some once put on a new entitlement. >> our understanding was put it back in medicare. it is including the done a whole. we have all the spending in the healthcare law. we are bound to not spend another program. this is the same structure as different ones. here is what we are trying to do.

we are trying to make sure that it stretched farther. everybody is that medicare is on an unsustainable path. i'm trying to answer your question. there is a group with price controls. they give choice to the system. i believe competition does.

the benefit kamen 40% below. it gives seniors choice. they actually have a medicare program. nobody is suggesting we are. what you can do is preserve them exactly for people in retirement. >> let me ask you another question. >> 28% was the 86 reform.

i do not agree with that. the tax should is 25% on businesses. will we keep taxing ourself a lot more. why do what to do keep america's businesses at the highest tax rate the rest of the world -- when the rest of the world is at a 25% rate.

we believe the need to be competitive. >> we have gone over the guarantee. corporate income taxes are relatively small part of overall revenue. it is true that the corporate tax code is riddled with protections. this should be done. the bulk of the revenue it is from this. when you do that, they are big tax burden.

it required been transferred. i can address this. it is based on the amendment. it is a long party lines. there are couples earning less than two and a $50,000.

if we were certain so that you can get there. >> i cannot speak for him and tell you exactly what the ways and committee will do. >> this is the sense. it is taking a lot of the loopholes and the top two rate filers -- they are the ones that autumn is the deductions. they are the ones that get all the tax breaks. if we take away the tax breaks, it is a wash. it is a wash.