support president obama has from his democratic base. and our series on the recommendation of the national commission on fiscal responsibility and reform continues. we will have a look at health care savings. part guest -- our guest is a special course, with kaiser health news. "washington journal" ♪ ♪ host: it is a headline spread across the newspaper this morning. the standard and poor credit rating agency downgrades the u.s. debt to negative. good morning, everyone on this tuesday morning, april 19, 2011. we begin this morning on "washington journal" on the

s&p's decision yesterday. they have lowered the long-term outlook to negative, pointing to the deficit growth in 2009. we have a one in three chance the u.s. could lose its aaa- rating in the next two beers. the last bullet point was one of their key determinants in giving the u.s. aid lower rating on its debt. here's how it plays out in the papers. here is "the washington post" headline. and then "the wall street journal" -- worl here is "the financial times" this morning.

it goes on to say this. that is "the financial times" this morning. we want to live from you. what do think about this? here are the phone numbers for you. we want to get your thoughts on this. let me show you a swetweet. this person says, "the question

is, how credible is standard and poor's warning?" you can send us a tweet, as well. you can also send us an e-mail. manchester, connecticut. pat, you are a democrat. what do you think about this? caller: what i think is going on is that investigation report that senator coburn from oklahoma and senator levin from michigan did -- the crisis in 2008, they did a big report. it was on c-span and they talked about it. are you still with me? host: yeah, we are listening. caller: one of the things in the report is what moody's and s&p

-- their ratings were involved in it. at the end of an hour reports -- the report, by the way, its pages long. senate staff spent two years on it. host: you are saying you do not trust s&p? caller: right. also aet's go to jeanne, democrat. good morning. caller: good morning. i really hope america does not lose its rating. if you would just give me a moment, please. i'm just so upset. i may not get to call in again. listen up, democrats and others who say you cannot support obama because he is weak and ineffective. the fact is, against all odds, he has accomplished approximately 80% of what he said he was going to accomplish.

host: we're going to talk about that later on in the program at 8:30 a.m. we'll talk about president obama and the democratic base. good morning. caller: good morning. the credit rating of america after 70 years of keeping track -- the end results of democrats being in charge for four years consecutively. you've had no high speed rail to save the people in new orleans, if there's another hurricane. you've had a cut in nasa. those scientists were not used in the gulf. host: do you think republicans should take responsibility for the deficit situation? critics point to wars in afghanistan and iraq and unfunded tax cuts, as well as medicare prescription drug program that was not paid for.

what do you think? caller: medicare, first of all, that is something that should not be touched. yes, it was on funded how the you repay the people who have put into this system? when you start class warfare, you are not looking to grow the economy in any way. there's no one talking about growing the economy. the president gives you a mandate of health care, but he does not even raise the minimum wage to allow you to pay for it. it is total chaos. of the choices, you assumed obama to be the sharpest pencil in the drawer, but all you see from him is an eraser. host: here is analysis from "the financial times" this morning.

host: that is "the financial times" this morning. here is "the washington times" this morning.

they say this. here is "the atlanta journal constitution" courtesy of the newseum this morning. host: akron, ohio. joe is an independent. your thoughts on this?

go ahead. caller: we are taking the word of s&p and i do not know if they have any credibility. if you look get out they rated mortgage-backed securities three years ago. you know, they went to congress and they said that is just their opinion. people should take more -- take a better look into this situation and if they feel like they should invest in treasury bills and the u.s. government, then they should go ahead. the rating system is flawed. who is checking how they rate these things? host: joe, do you have concern over the nation's debt and deficit? caller: oh, yes, i have concerns over the nation's debt and deficit. host: put s&p aside, or the political aspects of s&p, do you

think the debt-deficit situation warrants a warning and alarm? caller: you know what? i'm sorry. i really don't see the fire storm that is approaching. i see what s&p is saying. i do not see the united states defaulting on any debt that we have. we are a unique country and a unique situation. there's no other country with as much wealth as us. they can talk about china and it growing. it is growing economy and we are not growing as fast as china. you know what? they're going to have to grow a lot to be like us. a lot. i do not see that any time in the future.

host: the white house responded yesterday. jay carney, the spokesman, during his daily briefing, talk about what's s&p had to say. >> s&p affirmed the aaa bond rating of the united states but emphasized the importance of timely fiscal reform. the same emphasis the president made when he gave his speech last wednesday. the s&p analysis also said the american economy is strong, growing, a diversified, dynamic, and continues to be the most important and powerful economy in about world. host: "the wall street journal" this morning says "s&p currently rates 19 out of the 27 sovereign aaa. the u.s. is the only one among the 19 that has a negative outlook."

"those downgrade's usually take place within six months of the outlook change." let's go to don, a republican in maryland. caller: this will be typical of the calls. you have to go to "the wall street journal" or "the financial time" to get any factual information. i would imagine that if you read the headlines from "of the new york times or -- headlines from "the new york times" or "the washington post" you will

probably find stories about charlie sheen. host: hold on. is on the front page of both of those newspapers. let's go to michael in st. louis, missouri. go ahead. caller: i think it is a bunch of baloney. corporations and bankers trying to dictate what's going on with politics and trying to make america look bad. i feel that all the american people should understand that if china wants to -- let them go. we need to make our own televisions. we have enough people in america to create our own economic stability. we do not need other countries. if you look at your household

right now, 90% of everything is made in china and overseas. that is why our economy went overseas. these big corporations do not want to pay taxes. they want to go overseas. they do not worry about child labor laws. they were called a long and pay them whatever they want to pay them. host: let's hear from carol in florida -- let's hear from harold in florida. caller: what everybody is not talking about is we have the reserve currency of the world. if we lose our rating, we will not have the reserve currency, which means everyone will get rid of their dollars. there are far more dollars overseas than at home. if people get rid of their dollars and use some kind of combined currency as a reserve currency, that means when they use -- when they buy oil or

anything, they will not use dollars. people do not use dollars, it will collapse. we're spending over 40% of every dollar and it is borrowed. this makes no sense whatsoever. if obama keeps doing this, our country will turn into something none of us recognize. it will be worse than the great depression. it will happen and it will be soon. host: how do you tackle the debt issue? are you willing to compromise? caller: of course i am. host: are you also willing to compromise on taxes? caller: young lady, the country changed in the last 20 or 30 years. for all of us that are over 40 or 50, we remember when things were a little bit different. yes, i'm willing to sacrifice. yes, i'm willing to accept less pay. we have got to do that sooner rather than later. this young man in the white house, he is troubled.

this is insane, borrowing more than 40% of every dollar. there's no way this can end happily unless we change now. he says he wants coal to go under. he wants to raise the price on gas high enough so people use alternative energy. that's insane premier the third largest producer in the world. we have got it all here. we need to use it. we need to cut back spending, raise taxes a little, and we will be safe. we have a man in the white house who has all these theories. if you just listen to him, he will change from week to week and we will go over the cliff. host: he talked about the ramifications of what s&p did yesterday, downgrading the debt rating from stable to negative. here is "the washington times" on the interest on the debt.

"possibly creating a debt trap. that is what has led to the downfall of greece, ireland, and portugal." host: let's go to iowa. tim is a democrat. good morning. caller: i think s&p's move was purely political. they have very little credit worthiness. we can recall that they withheld

the aaa credit rating on 10 may and freddie mac -- on fannie mae and freddie mac until the u.s. but eight censorship on them. i'm concerned about the debt, also. i also think it's time to put tax breaks back to where they were during the clinton years. host: as a democrat, are you willing to reduce spending for programs like medicaid and medicare? caller: absolutely. anything has to be on the table. the republicans seem to be fighting that they do not want the corporations and the very wealthy to pay their share. that is something that they're going to have to accept. they will have to bring that to the table, as well. host: you are concerned about the debt-deficit, but you do not think it rises to the level s&p is talking about. caller: they did not say anything that nobody did not already know. host: ok.

you think it was political to spark debate and get the two sides to come together? caller: oh, absolutely. i'm sure they have their own political agenda on the table they are trying to push for. host: ok. here's some more reaction for you from members of congress yesterday. here's a statement put out by house majority leader erick kanter, virginia republican. he said this. host: let's go to northampton, massachusetts. liz, an independent, you are on the air. caller: if i remember correctly, standard and poor's and moody's, when they testified to congress after the collapse of the banks, they had raided all the banks and financial institutions as aaa -- they had rated the

banks and financial institutions as aaa. they said it was just their opinion. i agree with the caller before that i think there's something very political about this. host: would you like to see washington call s&p before one of its committees to dig into this a little bit more. would you watch that? caller: absolutely. host: bethesda, maryland. amy is a republican. good morning. caller: i totally agree with the last two callers. i feel this has a political agenda. i'm not sure what it is. i'm concerned about the debt and deficits. i think this will make the bickering worse. both sides are going to dig in their heels and they're not going to do anything. i do not know how important an

s&p bond rating is. the spending has to go down, but revenue also has to go up. it has been going on for the last two decades. it is not like all of a sudden we found ourselves in a $14 trillion debt crisis overnight. i think people are being disingenuous. host: members of congress have been tweeting about this. here's one from speaker john boehner. if you are interested in reading this, you can go to tweetcongress.org. here's one from connecticut democrat jim himes.

arlington, virginia. tony is a democrat. what are your thoughts on this? caller: good morning. i know they do not care about these deficits. if they did, you would not have the bush extension on his tax cuts. you know what, obama cave on that and it really disappointed me. i know congress and i know the white house -- are not concerned about tax cuts. host: go ahead. caller: they passed the $38 billion tax cut, you know. host: back in december. caller: this was a joke. it was less than 1% of the total budget. it was just a joke. this has been going on forever and ever.

you cannot fight two wars that are costing $9 billion per week. you just cannot do that. fiscally, it is absurd. you know what? if america wants to fight these wars, they have to pay for them. what i would do at the get-go is impose a $1 gas tax and throw it towards the budget. if america wants to fight these wars, they will have to pay for them. if they want as gas, they will have to pay for it. delusionalbeing about this. the republicans cracked me up. they keep saying they will raise taxes. you know what? we're headed for the cliff and we're probably almost over it. when the national debt is going up at $2,700 a second, there's no way you can take it. host: the white house announced

on thursday, may 5, the vice president will hold a meeting on deficit reduction. in the president's fiscal policy speech, he announced biden will lead a bipartisan group for a comprehensive deficit reduction. also out of the white house last night, president obama had his annual state for dinner -- annual sader dinner. in 2008, the president and staff ended up in harrisburg. it was late in the evening and had an impromptu passover seder. since that, president obama has hosted a seder at the white house. we will go to richmond, virginia. jack, an independent. we're talking about the s&p

downgrade. jack, you are on the "washington journal." caller: i cannot think the sky is falling. i think the s&p warning just got people on the edge. is this guy is not falling, -- if the sky is not falling, we do not need to panic. the united states is strong. our dollar is strong. everyone on the plant uses the u.s. dollar. everyone needs to stop panicking. if everybody is mad, nothing will get accomplished. sit down and take a break. let's get this thing together. in reference to three callers back, this fellow said you do not mind compromising. in mind. first of all, you have to get

wall street, standard and poor's, s&p, out of the mainstream. we bailed out the banks and the big car companies. we bailed out everybody. now this time for the united states to be bailed out. now all the big companies are ducking their heads. host: coming up at 7:45 a.m. eastern time, we will get wall street's perspective from john fund, a columnist with "the wall street journal." we will talk to them about all the questions that you raised. here is "the new york post" this morning with president obama's tax return from 2010. the white house issued a released showing what president obama paid, as well as the vice president and his wife there is president obama and michelle obama 1040.

let me read a little bit from "the new york post." "they paid about $435,000 in taxes, a $51,000 in illinois state taxes, and they contributed $245,000 to charities. the bulk of the earnings continue to come from books sales that generated $1.5 million." this is from "the washington post" this morning. if you look at vice president joe biden. "the wall street journal" says they paid $86,000 in federal

taxes last year. several host: the stories break down the charities -- host: several of the stories break down the charities that president obama and michelle obama gave to, as well. we're talking about the dead. caller: we have two problems. the debt -- we really want to make a difference in this country. nobody talks about this. they have exported all our jobs overseas. let's start taxing foreign labor

today to the point where their eyeballs are bleeding. bring jobs back to this country. it would do three things. it would make china drop. starting factories back in the country. host: also, more on the president's schedule. today he will hold a town hall in northern virginia to discuss his vision for reducing the nation's debt and deficit. on wednesday, he will look a town hall at facebook headquarters in california to explain his plans for the debt and the deficit. also, other news for you this morning. here is the associated press reporting that arizona gov. brewer vetoed a bill that would have required president obama and other presidential candidates to approve their u.s. citizenship before their names could appear on the state's

ballot. host: governor brought word, the republican in arizona, be noted that legislation. out of kentucky, rand paul, the new republican senator, who has talked about possibly running for president, filed to seek reelection to the u.s. senate in 2016. cleveland, ohio. maxine is a democrat. good morning. caller: good morning. i absolutely believe that s&p is just political. however, we probably needed to see that. we need to be talking about it. i believe that since we for started the entitlements, social security and medicare, the republican party has always been against it, has always been after it, and i believe they are

enjoying this deficit. they talked about how they were going to go jobs, jobs, jobs. the minute everybody voted, they have not mentioned jobs since then. people working pay taxes. that's another avenue out of the deficit, but they do not talk about that. they do not talk about that because they have us right where they want us. they want to destroy medicare and medicaid. they want to take it out on the children and the old people who built this country, the sick and the fragile. if we listen to what they do, not what they say, we will see that they're not on the side of working-class people. they are absolutely for the rich. if we continue to believe the propaganda and vote for them, the sky may not be falling out, but it will fall in the future. host: that is maxine, a democrat in cleveland, ohio.

here is a tweet. north carolina. pete is a republican. caller: good morning. the s&p ratings, while is not an official thing that controls anything -- wall street makes money on currency exchange. small things like this can mean millions of dollars for people that are trading in the market. our country is so far in debt. we do not need s&p to tell us that our credit rating should be down. it should have been down years and years ago. we're spending 40 cents on every dollar. i have friends that are in the

military and they say that once a month, in afghanistan, iran, they just go out and shoot out hundreds of thousand dollars of ammunition. host: are you an investor? caller: no, i'm not. that just shows waste. that is just a microscopic view of the waste. when you have things like fannie mae and freddie mac, their perfect examples. people went into debt and they borrowed more than they could afford, and the entire industry collapse. that contributed to our economic downfall. that's what our country is doing. we are pouring so much money -- we cannot ever afford to repay it at the rate we're going. host: john, a democrat in michigan. good morning. you're on the air. caller: good morning.

host: i'm listening. caller: i sent good morning. i agree with some of the callers. i just wish common sense would prevail in little more often. years back, when reagan was in office, they call it voodoo economics. trickle-down economics did not work then. he got us in a tremendous amount of debt. if you look at history, the republicans love for the government to be in debt. meanwhile, the multinational corporations that pull the strings, that grease the wheels of the government, they love this. they want a corporate america are running a corporation. it is ridiculous. i believe in the united states. i think it's the greatest country on earth. it is not a perfect union, but the powers that be -- it's real different than when jimmy carter was in office. he was a humanitarian. what do they do to the interest rates? who controls the interest rates?

they raise them. who controls that? if you look at the big picture, and who controls the money, you will find a lot of answers. host: "usa today" says oil spill recovery is still a work in progress. tomorrow on "washington journal" we'll be talking to two members of congress who have been impacted by the oil spill. that is tomorrow on the "washington journal." here is the marketplace section of "the wall street journal." they say, "big u.s. firms shift hiring of brought -- shift ."ring of broabroad that is "the wall street journal" marketplace section. "the los angeles *" takes taught journalism award."

host: also, another headline that many of you will be interested in. it's in "the new york times" and many of the newspapers this morning. pentagon clears general mcchrystal over profile in magazine.

"the executive editor said on monday that the article is accurate in every detail." bates was a recent guest on "washington journal." go to c-span.org and you can listen to our interview. he talked about that article and he talked about the most recent piece in "the wall street journal" over photographs in afghanistan. an independent. we're talking about the downgrade. go ahead. caller: i just happen to be looking to one of my coins. there are two sides to every coin. is says "in god we trust." that should be the splitting point of the two sides. i think everybody has pretty much taken god out of schools.

we do not even say pledge of allegiance to the flight in the morning. we all wonder why the economy and everybody is the way they are today. everybody were to pick up a bible and go back to our roots, we could survive. host: a republican in pennsylvania, you are on the air. caller: good morning. one thing i'm hearing today is that a lot of people do not know the difference between deficit and debt. this is leading to a lot of misconceptions here. our debt is so bad that nations such as brazil, russia, india, and china are considering using the chinese yuan as a standard currency for paying their obligations. host: that was the headline last week out of china, when those countries all met at the so- called bric countries, when they

were welcoming south africa into their group. caller: that is correct. what else is contributing to our debt that is putting us in the status of almost a third world nation? it is making our rating the crease. consumer price inflation has grown by 6.1% over the last three months compared to producer prices rising even faster at 13%. we have added $6 trillion to our debt under obama, a sure sign we're on the road to being a world -- a third row nation. also something that contributes to our debt status, 45% of americans have jobs last year, the lowest since 1983. among men, a 63% had worked last year, the lowest ever. we start looking at things like

that and you have to wonder why our rating is lowered. we're in a sad situation. we are on a fast track to becoming a third world nation. if we do not get our debt ratio to receipts in hand. that's just the fact. host: before you go, explain the difference between debt and deficit. caller: that is what we owe our creditors -- debt is what we owe our creditors. deficit is the difference between what goes in and what comes out on a yearly basis. host: a democrat in chicago, go ahead. caller: i have two points. the framework that obama encountered when he came into office is what republicans want to go back to. policing every issue that goes on in america and other countries. also, the lower taxes.

that's the framework for the situation we're in. yet we want to return back to that. the man has been in office 29 months and he is used as a villain as the one who calls all of this. like a couple caller said, -- like a couple callers said, one person said correctly that it is the wars. we are called upon by many countries to police the entire world. there has to be some kind of quid pro quo that we can suggest. why shouldn't our debt be forgiven for part of it? no one talks about that. there has to be some agreement that if we are going to do this, should get some of our debt be forgiven? theyw that's something -- really depend on us.

it is very costly on our part. host: let me get your reaction to "the washington post" front a survey on president obama's job approval rating. says the economy is battering him in the polls. 47% approved of the job obama is doing. 37% say they strongly disapprove. what do you think? concerned about this and president obama's chances for reelection? caller: when he first came into office, i knew the economy was so bad that he would be subjected to a great deal criticism. it takes a while to get out of the hole we ryan to the business cycle runs in five years.

because there's a continued focus on the dead and the deficit issue, it kind of overshadows the improvements -- focus on the debt and deficit issue, it's kind of overshadowing improvements. we have job growth that we have. we were losing 700,000 jobs per month before the man took office. that has stabilized. . host: i want to show you one more political headline this morning. is the front page of "the financial times" about donald trump on a potential run for president.

the front page of "the washington times" on donald trump. also, president obama, as we mentioned, is headed to virginia for a town hall meeting to we will have live coverage of that at 10:15 a.m. eastern time, 715 a & a time. he will be talking about his plan for tackling the debt and deficit. good morning. caller: thank you for having me on. i have a question for the guy three or four callers ago. i've been going to canada for years. you think the dollar is strong, you have got to be kidding me. second of all, where are the democrats on the price of gas?

they said bush was an oil man. what is this guy doing? i do not hear the democrats saying a thing about the price of gas. where are they on the price of gas? this guy in the white house is smiling about $5 gas because it makes his green policies look better. we cannot change our energy policy in two weeks like they think they can. it will take years. host: that's a republican in pennsylvania. we will continue with your phone calls about the s&p warning on the u.s. debt. i want to point out a couple of the op-ed pages this morning. this is "usa today." this is "the obama speech downgrade" from "the wall street journal." "the new york times" and "the washington post" did not have an

editorial about the s&p morning in their papers this morning. we will continue this discussion when we come back momentarily. ♪ ♪ >> this weekend on c-span2, jennet conant. on "afterwards" edward engle. also this weekend, ceresarah vowell. find a complete schedule at booktv.org. >> i think we are already, both democrats and republicans, to

get the country on the right track. >> the debate ahead of us is about more than spending levels. it's about the role of government itself. >> with the current year spending result, lawmakers now turn their attention to the 2012 budget and the nation's debt limit. watch the debate from capitol hill, the white house, and around washington on-line, any time with the c-span video library. it is what you want, when you want. you are watching c-span, bringing you politics and public affairs. every morning, is "washington journal" about the news of the day. weekdays, wash live coverage of the u.s. house -- weekdays, watch live coverage of the u.s. house and supreme court oral arguments. on saturdays, "the communicators." on sundays, prime minister's

questions from the house of commons. you can watch our programming any time at c-span.org and it is all searchable. c-span, washington, your way. a public service created by america's cable companies. >> "washington journal" continues. host: we are back from new york. john fund is a columnist with "the wall street journal." let's begin with what s&p said yesterday. the lower the u.s. debt from stable set negative. they said there's a one in three chance the u.s. could lose its aaa rating in two years. they expressed little confidence washington could come together on some sort of agreement before the 2012 election. what does this mean? can you explain that to begin with?

guest: it is a wake-up call and if we do not heed the warning, we will sink into deep trouble. the kind of debt trap that was described earlier in the program. what s&p said was a political statement after president obama's speech last week. the concluded there's very little chance on an agreement towards fiscal sanity between congress and the white house before the 2012 election. in a sense, the president began his reelection campaign. i do not think we have the luxury of debating this issue for the next year and half. i think we'll have to tackle this. s&p is saying political paralysis in washington for the next 18 months can do serious damage to the economy, of course this recovery, and plunges into a kind of debt spiral that we've

seen in europe. greece, portugal, ireland. this is not a prospect we should not welcome. host: there also pointing to republicans, looking to the budget proposal by paul ryan -- that there will be no new revenues coming in from taxes, no tax increases, and say that the two sides are too are part because one does not want to address spending and the other does not want to address tax increases. guest: in december, the president and congress came to agreement on taxes. they extended the tax cuts. both sides privately agreed -- and i talked to both sides -- if you raise taxes in a recession, you are going to hurt the economy. there's no school of economic thought. i do not care if it is marxism, tenzing as some, or vegetarianism.

it will only hurt job creation. that's what the american people are worried about. host: do republicans need to take responsibility for this morning from s&p for the tenure of the bush administration? the tax increases than that many say were not paid for and then the medicare prescription drug part d program that many say is not paid for. do republicans need to take responsibility for this morning that s&p put out yesterday? guest: we had a horrible decade of public policy in many respects in the last 10 years. the bush administration had a horrible mistake in trying to expand the entitlements with prescription drug benefits that were not paid for. the wars were certainly a drain on our fiscal future. obviously, president obama and here today very bad situation and the economy was very weak. the bush administration made

many mistakes. since then, president obama has had two and half years, and i think he has only compounded the mistakes. the debt has gone from $7.9 trillion to over $14 trillion. the stimulus spending has been universally acknowledged to not have accomplished its goals. it raised the stakes dramatically by trying to extend coverage for health insurance. it is a laudable goal, but we cannot afford it. half of the people will be dumped into our medicaid program, which is substandard medicine. i think the president has taken a bad hand that he was dealt and made it much worse for all americans. host: how did wall street reacts yesterday to this news from s&p?

caller: -- guest: it dropped 140 points. i think it recognized that this was a signal that the economic recovery can be aborted because of political paralysis and the refusal to try to change our policies to make us more competitive with the world. a lot of people say we have shifted jobs overseas. a lot of people say we have a weak manufacturing sector. i'm not here to debate that. the way to solve that is for us to become more competitive. we have, for example, the second highest corporate tax rate of any nation world, other than japan. japan is not doing so well, frankly, even before the horrible tsunami of last month. s&p downgraded japan's bond rating in january. i think we need to make some changes that can increase the chances of an economic recovery taking hold and we start to create jobs. we have not done that. i think both parties need to come to the table and we need to figure out in a bipartisan way

what are the few things that the two parties can agree on that will make this recovery better and not wait to simply have bickering for the next 18 months? host: our tax increases on the table in your opinion? guest: i'm sure that will be part of the negotiation. in december, both parties agreed that tax increases in a weak economy does not help the economy. if you can bring me the school of economic thought that says you raise taxes in a weak economy and that will improve things, i will send you a check to your favorite charity. such a school of economics does not exist. host: paul krugman wrote yesterday on his blog.

guest: markets respond to signals. the fact that it looks as if the president and the congress will be in a stalemate for the next 18 months, that cost s&p to do the downgrade. because the market to drop. the dollar continues to weaken. i disagree with that. i think waiting for another 18 months only makes matters worse. i do not think we have that much time. greece, portugal, and ireland but they have all the time in the world. when they lost credibility in the markets and people with ninth -- and people would not buy their bonds, we was out very quickly. we are not immune to these pressures. even though we are the greatest nation via world, laws of

economics apply to us. host: some said the market was comforted that washington could come together on some sort of an agreement. guest: of course, you do not look at any one-day or two-day or three-day fluctuation in the market and try to override what that means. clearly, the markets are nervous. some have said that s&p could be followed by moody's. the international monetary fund, which is the institution that normally jumps in to try to help troubled economies, they reported just a couple of months ago that since the u.s. deficit is likely to hit a 11% of our total gross national product, that this was a real warning signal. s&p is a lagging indicator. all of the serious economic observers are looking at this and saying we're in real trouble. s&p is late to the game.

host: let's go to our first phone call for john fund. ruth is a democrat in memphis, tenn.. go ahead. caller: i'm so profoundly disappointed in c-span for introducing this man as a journalist. host: columnist. caller: the headline said journalist. he has been called a journalist. he's been a spokesperson for the republican party's for years. i'm seeing strategy -- this whole thing is exactly what the star of the beast -- starve the beast strategy wanted to accomplish. it is just crazy. everybody remembers -- deficits do not matter. host: let's get a response to that, john fund.

guest: if the caller was listening, they heard me criticize the bush administration on its management of the economy and spending that went out of control. secondly, i spent 25 years observing washington politicians. i can never sure you -- i can assure you i've looked at both democrats and republicans. it is just that republicans might feel a little more guilty about it. i think republicans have often abandoned their principles. i've been critical of republicans. i forced a couple out of office because of corruption and malfeasance and other issues. if the caller listened carefully, she might have heard some very stern criticism of the bush administration. host: let's go to st. joseph, missouri. maggie, a republican, go ahead. caller: good morning. host: good morning.

caller: in this country, we have far too many people that are not educated enough to understand the way the economy slows and the deficits and taxes. what we have is we have been democrats using scare tactics in order to keep their big agenda going. we have a president who shamelessly intends to crash our economy. everywhere you look from oil drilling to epa regulations, all he does is throw roadblocks and undermines our economy, our growth. he has escalated any kind of problems that he had when he came into office three he has far exhilarated us down the road -- he has accelerated us down the road to destruction. host: kent, go ahead. caller: good morning.

i'm glad for the job c-span does this morning and every morning. what i would like to ask your guest is, where were these red- flag raising agencies when the mortgage crisis was heating up and all the money was pouring in to make places like aig too big to fail? why don't guest: first of all, the caller before this one, it is unfair to say that obama wants to crash the economy. i think there's a fundamental disagreement as to whether or not what he is doing is working. as to your current caller, the reason why we should worry about what the s and p adjusted its

that -- the bond rating agencies are often wearing the gas mask. when it kills over, you know you are really in trouble. if you look at all of the state's municipal debt disasters, often the bond rating agencies went way too long to warn about the dangers of public pension obligations that for going out of control. the reason the warning is very appropriate from the s&p is they are the people to make this call first. many have been warning about this for a long time. that is why the rating agencies have a finally woken up. host: what will happen throughout the day? guest: i think the markets will

continue with a narrow band of gains into losses. there is a lack of confidence in this economy. there is a couple of trillion dollars of capital sitting on the sidelines that is not being invested in jobs, because of the uncertainty of the economic conditions that we now have. these are real. so much uncertainty about what the tax policy will be, new regulations that will be heaped onto the economy. the democratic congress chose not to do that. i think we have to be worried. if right now, the former budget director that has become a liberal on many policies, he was on c-span last night. if right now we had $2 trillion in capital sitting there, not

being invested in jobs, it would be invested overseas. places like that, where they have economic policies that are much more stable. our competitors are not waiting for our -- not waiting for us to get our house in order. they are building new factories. the face that we are so stagnant in this country should tell us that we have to take steps to improve our competitiveness as fast as possible. we cannot stand still. host: what is your reaction to this line? what do you think? guest: the other nations do not want to see a debt crisis.

i think it is rallying around the flag. there is not in immediate short- term crisis. this is a warning sign that we do not have a 18 months to wait. the consensus from the economic experts that i spoke to is that we could be two or three years away from a debt crisis like the one we saw in portugal and greece. we should not wait to take serious steps to try to improve our competitive position and tried to get some of that trillions of dollars in capital waiting on the sideline into productive jobs. i think unemployment is still almost as 9% because of this. host: if the s&p says we will down grade the aaa rating of the u.s. in six months, what will happen? guest: it will be a signal to the rest of the world that we

are not serious about dealing with our debt crisis. i was in japan in january. it was a couple of months before the tsunami. they have had two lost a decade of economic growth. visit to japan, it is a normal society. there are many things in the shops. life goes on. there is a growing sense among young people that japan's future has slipped away from it. this was an economy that was supposed to be the world's preeminent, and it slipped into the second, third, fourth slot of economic growth. i do not want that to happen to us. i think we are the most growth oriented and optimistic country in the world. i want that to remain so. just because we will not slip into a depression, does not mean that we do not have something to worry about. our optimism, our strength, and

a person born in america for many decades has a better chance of entering the middle class, even if they came from modest circumstances. all of those things are in jeopardy if we do not return to economic growth and economic opportunity policies that made this country great. host:here is a tweet. guest: i will just say that we had the slowest economic recovery that i can remember in my lifetime. probably the slowest since world war ii. we are almost two years in the economic recovery. before we would have seen unemployment at 6%.

we have not the last -- lost as much money from the highs of 2007, but the average person is not in the stock market. they need a job. they want to work 40 hours a week, but their employer will only give them 30 hours a week. for the average american, it is whether or not they have a job and have to worry about losing it. it is about having work been made available to them. host: that go to the democrat line. caller: it is like nobody understands what happened to america's economy. president eisenhower said there is a secret organization in the industrial field, which is trying to bring us down. nobody listened. kennedy and reagan sounded out. even george bush, when he tried

to do his thing, paying for the war with iraq and the oil, and all of the money that they found over there -- where did it go? if they use that money and put it to the economy, we would not be in this trouble. guest: i remember president eisenhower's farewell address very well. he talked about the military industrial complex and it was a concern. he never said it was a secret. i do not know what the caller is saying about what kennedy learned and reagan learned about the military industrial complex. both were fighting a cold war and put an enormous amount of resources into our military. i am sure there was waste. we won the cold war without firing a shot.

what they did a ultimately prevailed. host: republican line. caller: i want to ask you a question. would you say that if we were to raise taxes on the wealthy, say 90%, would that into the government create jobs, rather than waiting on the super rich people to create jobs, which we know they have not done over the past 8-10 years, would you say that would help the economy? guest: we ran an editorial in yesterday's. -- yesterday. if you tax them 100%, it would

bring in 1.9 trillion dollars a year -- $1.90 trillion a year. it would not pay for anything that the government spends money on. it would barely cover the cost of medicare and medicaid and social security. those costs are going up so much that all of the money collected from them, it would not pay the bill for those three programs by 2016. the sad part is that even though the top 1% top income earners pay 30% and moderate income people pay lot in other taxes -- the sad part is that there are not enough rich people out there. we cannot pay our bills with them. if anyone says they want to tax the rich, they are talking about taxing the middle class as well.

host:mike, go ahead. caller: i want to take it a little bit different. i want to say that when you have kids -- when we were kids, the adults say, shut up in the station a child plays. when we become an adult, everyone says, let's not talk about it and hope it goes away. the real problem is that there is no right accountability. the republicans and the rich, they take advantage of people. obama came in there being a humble man. they broke his hamas, took him from the church. himrokenhumbleness and took

from the church. he cannot do anything when people around him say he is the wrong color to fix things. then you have other people screaming, we would rather vote for rich people who are our color and they will do a bad job, even though obama has tried to [inaudible] we went through everything and tried our best, but it seems like everybody looks past that. host: any thoughts and reactions to his comments? guest: one of the things that the election of obama proved is that while we still have a long ways to go, we have still made progress in this country. millions of americans of all colors voted for obama. they voted for change. i have relatives that voted for him.

ultimately, we judge people by the content of their character and their policies as president, not their color. his approval rating is 41%. his approval rating among hispanics has fallen. this is a report card not based on his race, but his performance. after about 2.5 years in office, you have to be judged by your own policies and not blame your predecessors, even though there is much to blame their. host: here is a comment to an earlier tweet. do you agree with that? guest: several people have left the federal reserve board of governors and express their public distain for this qualitative easing, which is

basically printing money. a lot of this economic recovery that we see may have been sustained from just printing money. we are seeing inflation -- not just in gasoline. go to your local supermarket. you see how much food is going up. the economic stability at the price of long-term inflation -- if we continue with these policies, we suffer a danger that we may see what we saw in the 1970's. we had stagnation in the economy, low job creation, and inflation. rising prices destroys people's savings. that was one of the worst things that ever happened. i do not want to have that happen. the fed policies are miss kate -- misguided.

host: some republicans and comment tea party members of congress say they will not vote for it unless it includes a long-term fiscal plan to address the debt and deficit. should that be part of the condition before republicans agreed to vote yes? guest: something has to be attached to the debt limit. this is not the time to negotiate dramatic budget cuts. there are a few things we should certainly do. we should into this game but if you fail to raise the debt limit, it will hurt the credit worthiness of the united states. if the dead sea's -- ceiling is not race, the money thief --

raised, the money that the federal government takes in will go to covering the bonds. the states are putting pressure on the federal government to bail them out or their financial mistakes. i think the federal government, which [inaudible] we should demand a full transparency from the state. there are all kinds of reforms. some think we should look to a two year budget. many states have that. the first year they decide where to spend the money. the second year is oversight. figuring out how the taxpayers' money is spent and if it is spent wisely. there is transparency. obama teamed up with coburn for

the transparency bill when he was a senator. they put the records in budgets on the web, so people could find out where the money is being spent. that bill dropped off of the radar screen when obama ran for president. i think that was a great idea, and we should bring that back. i would think bill -- obama would feel compelled to sign it, since it was his bill. host: there is debate on whether or not to vote for a bill that would raise the debt ceiling. here is what they said.

guest: i agree with the first part of his analysis. i think there has been way too much uncertainty. everyone has frozen of that capital on the sidelines and has not been invested into job creation. not having the debt ceiling raised would have some bad signals. i think it is a game of chicken, similar to what we saw with the lame duck session. i do not think that wall street for anyone else is going to allow the debt ceiling not to be raised.

should we take prudent steps to attach realistic reforms that most people can't agree on such as transparency -- can agree on, such as transparency? the answer is yes. should it be a showdown over future spending? i do not think so. there will be political, a round of the debt ceiling. -- around the debt ceiling. both sides i think are playing this for all political worth. host:nick in michigan. caller: did the president know and it congress know when they spent the money that it was.

to require an increase in the debt ceiling now? did we know that -- that it was going to require an increase in the debt ceiling now? did we know that? guest: the debt ceiling has been raised something like 18 times in the past few years. it has happened on a bickering basis. barack obama -- on a recurring basis. many have used the debt ceiling as a political football. the stimulus package was a down payment on what we ran up spending the last few years. they knew what they patrolling. they probably should have done something different. we have to deal with the hand that has been dealt us. host: independent mind, ed.

-- line, ed. caller: i am tired of the infighting going on. we have to stop this class war. we have to save our country. i am 62 years old. i would hate to see us going down this road. host: i want to ask you about cover debt and how much we spend on defense, since he said you were in the military and an expert on airplanes. the money that we spent on military and equipment is part of the debate. should there be spending cuts for the pentagon? caller: a lot of the money goes

towards retirement and people hurt overseas. a lot of the money goes to research and development. we have tankers that cost billions of dollars. maybe we have too many carriers. a lot of our money goes toward paying retirement, disability, and a host of other things. i do not want to see the military pay the price for cuts. guest: a, from a military family. there is waste -- i come from a military family. certainly, there is waste. my father was stationed in germany. we still have a 50,000 troops in germany. we may be able to reduce that amount to some extent.

we have military bases in many countries. the real money are the promises we have made to future generations in medicare, medicaid, social security. it has been a cruel hoax from many people. singing they cannot meet the pension obligations that they promised people -- saying they cannot meet the pension obligations that they promise people -- we need to reform this. we have to update these changes for the 20% century. medicare was -- 21st century. medicare was a gold standard for 1965. it has not changed much since the prescription drug benefit. we need to figure out which health outcomes can be altered for the better. we do not need to abolish these programs, but make them

relevant for future generations. there is not a single part of the private sector that has stayed the same from 1965. we need to learn from the knowledge from the private sector and apply it to the public sector. host: to use support paul reince plan for medicare and medicaid? plan for medicare and medicaid? guest: i do not support every part of it. many medicare patients can go out and shop from many different plans. politically, we are not one to change this plan for anyone under the age of 55. we will give them all kinds of options. it can be a better plan, because it can bring the forces of

competition to play. in the federal government, we say we should give people the same kind of health benefits the federal government has. they have a range of choices. we should give the same range of choices to medicare patients, so they can buy plants that are better suited to their circumstances. host: there is an opinion piece in your paper, the wall street journal, called reverse robin hood. what is your reaction? guest: price controls -- nearly half the positions -- physicians

will see medicaid patients. the status quo is unsustainable. the basis of what paul ryan has proposed was endorsed by a bipartisan commission set up by bill clinton. it had a couple of democratic senators on it. since then, the budget director has endorsed the basic concept behind the ryan plan. there is a support on this because of the partisanship. we have to change something about medicare to update it for the future. supporting the status quo and taking pot shots at anything that is presented as an alternative is not responsible. what is your alternative other than price controls? i have lived in countries with nationalized health insurance. rationing is not good for old people. you wait nine months for a hip

replacement treatment. you wait nine months for procedures. some people die because they are waiting to long. that is a scene in canada. the wait list -- seen in canada. the way this is so long that people died waiting on it. host: we will look at the bipartisan deficit commission and aspects of its leader. today we will look at medicare and medicaid. each day we are looking at different things. wednesday will be defense and security spending. thursday, overhauling the tax policy. friday, a look at social security and what the bipartisan commission proposed on that. michigan, a democrat line. host: i want to thank c-span.

i want to make a request before a comment. would you in the future do something on all of these think tanks that are across the united states that are preparing this extremist, right rwing legislation? i will send an e-mail, but i would hope that you consider doing that. mr. fund, as i have listened to you, i have made a long list. so security has not caused this deficit. it will be solvent for years in the years to come. when you speak of ireland and other countries of a symbol of what could happen to us -- you were pricing -- praising

ireland. they followed your business model. they collapsed because of it. now they are falling in an austerity plan. china is investing. you are praising china now. china is investing in high-speed rail and developing their country and improving their roads, improving their education. host: we are running late. we got your point. guest: we have neglected our infrastructure in many parts of the country for a long time, because we treated to new programs and entitlements like obama care. if we did not create so many entitlements, maybe we would have money to repair our roads and maintain them. i think the china comparison is apples and oranges. host: thanks for being with us

this morning. we appreciate your time. next, we will talk about president obama and the democratic base and but many think about what he has said recently on spending and tax increases as well as the budget debt and deficit. then we will turn our attention to our series on medicare and medicaid and what the bipartisan deficit commission has said about those programs. we will be right back right after this. >> let's meet one of our top winners in the student can competition from this year. they discuss a topic that helps them better understand the role of the federal government. today we go to moscow, seek to speak with and a greater -- knoxville, tenn. to speak with an eighth grader who won second

place. >> all of our group of members were interested in energy. we did more research to see have to get more efficient energy. when it was started in the second world war, it was completely funded by the federal government. >> what is it best known for? >> elkridge is known as the secret city. it was started in the second world war part of the manhattan project to make iranian for the bonds. it is known for that. today it is known for continuing the research and innovation along with the federal government. >> what impact does it have on your community? >> it supplies us with the jobs. support jobs in community jobs.

an entire city grew out of these labs. out of that group thousands of jobs. one of our interviewees and they funnel people to make supplies to make buildings there. that gave about 1000 jobs. >> what role does the federal government play with the labs? >> it funds the national level. there are programs at the department of energy. >> you interviewed the director of sciences at the lab. what did you learn from her? >> it was how the networks applied the grants for each individual project. that is have they get the money

for the variety of things they do. we also learn about different projects. help those projects affect our daily life. >> what kind of projects are being conducted at the lab? >> a huge range, computer technology, biotechnology. there is an atom collider, where you smash them together to see how they work. there is ongoing cleanup that they started after the second world war. too many projects to name. >> what is the message you would like to share with people from your documentary? >> the biggest thing is that i but like them to appreciate what they had son back in the second

world war, and what it does now, and what it will do in the future. >> a lot of different projects that deal with energy technology -- we would like to get into advanced nuclear programs, so we can get more electricity and better materials for the electric grids. >> there are so many that computing is huge. they had a great computing center out there. there is a neutron source, which is a great user facility to look at materials and learn some of the most fundamental things about some of the things we use every day, and how to improve them. too many to even talk about. >> it contains an installation source, one of the finest in the

world. >> it is one-of-a-kind in the world. no one else has that capability. >> you can see this entire video and other winning documentaries tcam dot org. >> "washington journal" continues. host: allen next guest is here to talk about frustration with the debates. here is what obama said -- our next guest is here to talk about the frustration that obama has discussed regarding debates. >> there have been times where i

had felt the same way you do. host: are you frustrated? guest: on some issues i am. i think there is a disconnect between washington and the country. everywhere around the country where i travel, i see the effect of massive unemployment. [inaudible] host: what is he talking about that you like and do not like? guest: in the speech, he articulated a vision for why we needed the government to do something we cannot do for ourselves. he says that we rely on each other to do certain things that we cannot do alone. that was very positive. what i am troubled by is that we

seem to only talk about the deficit, at a time when there is another crisis, which is the unemployment crisis. host: here is the headline from last week's washington post. why? guest: we have unemployment rates across the country where half of the people in the neighborhood are unemployed. this is a social catastrophe. we see no proposals from anybody to do anything about that crisis. it is coupled with a foreclosure crisis, and thousands of people continuing to lose their home. i think the frustration that i feel is the same frustration that millions of americans feel, that the government is not responding to that intense pain and suffering. host: front-page headlines.

why should president obama and deal with the deficit, when you look at those headlines this morning? guest: how did we get into this problem? the bush tax cuts for the very wealthiest people in the country, a massive redistribution of wealth in that direction. we had wars that we cannot afford in cannot pay for that are still going on. and a huge economic calamity brought about by deregulation of the corporate sector of the financial sector. the solution to the deficit problem is to get the economy moving again and to invest in jobs right here in america through infrastructure, aide to

state and local governments, to stop the hemorrhaging. the solution to the deficit problem is taking the jobs problem seriously. host: here is a side peace in the "washington journal." -- piece in the "washington journal." guest: it is important to understand in the last 20 years, 80% of the gains in our economy have gone to the top 1% of households. tax rates for the top 400

households have been reduced by one-third. that is a dramatic reduction. that would be real money making a real difference in bringing our deficit down. we need to cut defense and get out of a foreign entanglements that are reducing our ability to invest at home. we need a major investment in infrastructure to get the economy building again. the economic recovery package did not go far enough. that was the problem. it had imported programs to get the country moving again. it was not bold enough to jump- start the economy to a level we needed it to go. host: some say this country has not responded to the financial crisis as they should have let other countries. they are saying opposite of what he said. those countries had austere programs, which has helped them

with their economy. the u.s. needs to start doing the same. guest: we are seeing what austerity looks like in the united kingdom. they see a slowdown in economic growth. they are on the verge of going back to a beast -- severe recession as a result of that. the real issue with the report is that the republicans are threatening to potentially hold ever countries creditworthiness hostage to some of the most extreme proposals to destroy medicare, medicaid, and so security, the foundation for social contract in america. they are playing with the picture of the country. host: sedation not agree to touch medicare, medicaid at all -- so you agree that they should not touch medicare and medicaid at all?

guest: some measures were included in the health reform law. paul ryan did include some of that in the proposal he released. giving vouchers for medicare is essentially transferring thousands of dollars from the most normal people -- that is not who we are in this country. there is enough if we take a different course and increase taxes on those that can afford to pay. host: the latest poll numbers are seven points below where they were in the most recent other poll, nearly matching the worst level of his presidency, have fisher message appeal to independents, which president obama needs to win the election? guest: they are hungry for something that speaks to the crisis they see in the country. we had the worst financial crisis in the country in 70

years. nobody went to jail. we had a regulatory reform package that was not tough enough. foreclosures and unemployment continue to increase. what is the other path? a robust alternative, investing in jobs in this country, that would be the winning recipe for independents. host: santa barbara, california. caller: jesse jackson jr. commented on the eye patch from unemployment. pad for for unemployment. i have heard many say there are many jobs, but there are too few people educated women to take these jobs. -- educated or willing to take

these jobs. guest: we have five unemployed jobs in this country. no amount of job training by itself will solve this problem. we need a robust program to create jobs in the united states of america or we will have a 10% unemployment as far as the eye can see. there are important investments the country can make to retrain workers were emerging sectors in the economy. a growing occupation for hearing of baby boomers is one area for work. we need a bold job creation

agenda to get out of the pickle we are in. host: what does your group do? guest: we are an advocacy group organization for low income people and people of color. host: medicare and medicaid? guest: a big part of your job. host: democrat line. caller: i have a question i would like to ask you. how much of our money was spent by average government to help relocate the companies that moved to foreign countries? where can i find names of our elected officials who voted to fund these moves? is there anyone who has traced a product from china or wherever it came from a back to the united states to find out who is

paying taxes, if any? how can we get out of this mess until we get jobs back in this country? guest: we have had a perverse tax policy that has rewarded companies for offshore and jobs from the united states to other countries -- offshoring jobs from the united states to other countries. we have not done what we need to do for those countries that do not have wage protections like we do. a big part of the strategy for getting the economy moving has to be to insist that other countries around the world have those same kinds of standards. i would recommend an organization here in washington, the economic policy institute, on the question of trade and how it relates to our economic future.

host: georgia, independent caller. caller: my question is about medicare. our 65 senior citizen pays a certain amount of social security ever month. i have not heard anyone talk about that. every time we look, the public and get us in trouble. what will get us out of the economic mess we are in? guest: people do pay into medicare and they pay premiums. what the republican plan would do if implemented is increase the amount people paid by $6,000 a year. that is a radical change in the structure of the medicaid program and a radical cost shift

to people that cannot afford to pay that amount of money. it is a. dangerous proposal that would undermine american -- undermine medicare as we know it. public investment to create jobs at a time where the private sector is not doing so. that is what our strategy has to be to get the economy moving again. president roosevelt responded to the suffering in the country by creating safety net to address people out of work through no fault of their own and cannot find a job. host: we will continue our series, looking at what the bipartisan commission recommended when it comes to medicare and medicaid. did you agree with what the debt commission said? guest: i did not. i thought it was wildly out of whack in terms of what is proposed for spending cuts and

tax increases. their plan would continue this radical redistribution of wealth from ordinary working class families to the top 1% or 2% of the country. the plan is no road map for a prosperous, thriving, equal america. host: we will get into that more as we continue our week long series on the different issues. a reminder that president obama will talk about what he wants to do on the debt and deficit, kicking off a three day trip that begins in virginia with a town hall meeting. live coverage at 10:15 a.m. eastern time. let's go to california. are you there? we will move onto a democrat in washington, d.c.

caller: you mentioned that you are an advocate for immigration reform. i do not think anyone has looked at how much money is spent on people who are here in this country illegally, as far as some of the grants that organizations get. they benefit people here that are illegal -- that are here illegally. some rights are given to children who were born here -- the parents of children who were born here. if they have a disability, they have benefits that citizens have

put into the system are benefiting the some that are here illegally. guest: immigrants pay more in taxes in this country then they take in benefits. people here illegally are in eligible for almost all of those benefit programs, with the exception of emergency room care and public education for children. the larger question that the caller is getting to is, is immigration the -- a part of the reform for this country. i think it is. they have brought energy, and many other things that make this country unique. this generation is no different than prior generations. it is a piece of what we need to do to thrive in the 21st century. host: gallup polls showed that

hispanic voters are not happy with president obama. guest: they have reason to be troubled. the president made public commitments to move immigration reform in his first year of office. it did not happen. many understand there were competing priorities on his plate. this administration has supported more people than at any other time in the united states history. this means that we have a families being separated where someone is undocumented, someone is a citizen. there is enormous pain, suffering, and anger. that is what is reflected in those numbers. host: will they possibly vote for the republican candidate instead of obama? guest: the question is whether the president will respond to the failure with an aggressive policy to deal with the can.

it is unlikely that congress will do anything regarding immigration reform for the next year and a half. obama could say that we will focus our resources on people that pose a genuine threat to the country and will not support students who have only known the united states as their home. we will not support housekeepers, people with deep roots in the country with u.s. children.i they are an important fabric of our country. we need to focus the resources on security threats. host: what do you have behind you as far as resources? what can you mobilize for president obama? guest: we work with an

organization that organizes people all over the country in low-income communities and people of color. we organized people to participate in the political process. we registered voters. that is a source. only when people participate can we overcome the extraordinary influence of organized money and worker money in our society. ordinary people have to organize and set out -- participate. people always have a choice in an election. they have to exercise the right that people have fought for and died for in this country. people cannot sit on their hands.

we encourage people to register and participate in come out to the polls for what ever candidate they think is supportive of their community's interest. we think maximum participation of everyone in the american society will produce the best outcome in terms of policies. host: michigan. caller: i was pretty sure that back in december that they had settled on increasing the bush tax cuts and that was in order to prevent [unintelligible] it would not have been wise to cut them in the state that we were in. this lower rating that we are getting from the s&p, obama's plan is to rob peter to pay paul. the problem with president obama is that he is running out of

peters and has more polls. -- pauls. that makes the problem worse. guest: i think it is important for the caller to understand that inequality in this country, the gap between the rich, middle class, and poor is at the widest point and it has been at any time in the 20th century. 80% of the prosperity of the last few decades has gone to the top 1% of households. there is an enormous amount of concentration of wealth that has occurred because of tax policies and other policies. it is only fair to ask those with the most resources that have benefited the most from the recovery -- we encourage people success, but it depends in part

to the help of the rest of society. they have an obligation to contribute back. it is only fair that they do so. caller.ndependent schola caller: i was with you until you spoke about immigration. you are very wrong on your comment. as far as the stimulus plan, it was not focused on what it should have been focused on. it was focused on retiring police. it should have been a focused on on building machinery. i'd like to get a pair of american underwear made in the united states. there is none. you cannot find it. they are all overseas. they should have financed to start entrepreneur worss

these facilities back up again, so that we can compete with these foreign nationals. these multinational business people who are not american citizens are using us as a market. guest: i think the recovery package did include a number of very important provisions. i agreed with the caller that more needs to be done in that regard. we have infrastructure at every level -- investing in that would help broadbased economic growth. we need aggressive policy to get credit in the hands of small business people, who do create jobs and wealth in the country.

we have had a shrinkage. the big banks are not lending to small businesses. we need aggressive policies set up by the federal government to stimulate the credit extensions of people can higher, as -- hire others in those manufacturing sectors. host: next caller. caller: you let people speak their own troops on the liberal side. truths on the liberal side. it appears that this gentleman has not read the poem ryan plan. it does not say that medicare recipients will pay an additional -- has not read the paul ryan plan. it does not say that medicare recipients will pay an additional $6,000. host: that is the beauty of the

program, that you get to call in and challenge our guests. guest: it would give vouchers to the medicare benefits at a level that is far inadequate to buy private insurance on the private market. the cost of medicare is substantially lower, because we negotiate a lower rate. there are not administrative costs associated with private insurance. they get the same amount of money to buy a policy that is $6,000 or more expensive. go to the website that analyzes how the host: let's go next to westminster, calif. caller: 1 think about myself in

california, i am the son of an immigrant. i understand what it is for someone to try to become a citizen. my mom was legal. the thing is, in california i have watched what has happened to california. our immigration in california has gone from so many illegals it is unbelievable. wages have also gone down. i am a construction worker. i have worked in the trade 22 years. i also talk construction for 17 years. -- taught construction for 17 years. illegals are in the union. they are taking the jobs that should be going to our veterans. and you really do not know too much about what really truly

happened. host: let's get a response. guest: the truth is we have entire sectors of our economy. but state agricultural for example. agricultural for example. we have a whole sectors of the economy that depends on immigrant labor. the united states has an interest in making sure that we do not have two glasses of worker in this country. one that has no ability to bargain or exercise the rights, because that will depress wages for native-born workers. they have a path to citizenship. it is in no one's interest to have a second class group of

people in our country to bring down labor conditions for everybody. it is in the country's interest to bring them out of the shadows and let them participate fully in our society. host: let's go to don next to his in an independent in new jersey. -- who is an independent in new jersey. caller: i have been watching you for many years and i am sick and tired of people saying it is his fault, her fault. do not ever look in the mirror. you have to say i accepted -- i voted for these people that have these ideologies, that is what is causing us to go down the tubes. it is simple as that. we have a president in office. before he got in office, i was all set to vote for him. the more i heard him talk, the more i said he is a candy man.

host: what about the republicans? caller: there is no republicans. they are conservatives. just like there are no more democrats. they're all liberals. they will not take care of you. i am sick and tired of hearing about the rich. the rich create jobs. yes, they can go where they can create the most money, and that means china, brazil, india, because the atmosphere here for the american worker. host: i think we got your point. let's stick to 2012 politics and get your thoughts on the republican side of the ideal. here are some pictures of potential candidates. of these, who do you think represents the best challenge to

president obama? guest: honestly, i am not sure there is a strong competitor in the entire bunch. elementsextreme not run the process. i am not sure any of them are a delectable under these conditions. it will be very hard for even those like romney who passed a health care plan and massachusetts much like what the president pushed in washington. host: was that extreme? guest: moved a reasonable plan because he is running of the primary electorate. they have a dilemma, which is how do they find someone that can survive the primary process, and still appeal to a broad section of the country? it is not clear to me they can

do it. host: judy in new hampshire. caller: i have a, because they always talk about social security. i have a hair salon. and i do my own peril. it made me sick to see people telling they are getting a 2% increase, yet they took it from social security. they get a 2% increase now, but later on down the road they will not have this also security. they are already telling people we do not have enough in our budget. on top of it, obama says -- i personally think they should put their heads together and work together, but they now started taking anywhere from $7 to $10 more on a paycheck of $300 to $350 per week. there is obama taken from the working class to pay for

everything else that goes on with this country. now i also hear that minimum wage will be going up to $9.25 per hour. whether that is true, i do not know. do you know how many small businesses like me it will put us out of business? guest: i am not sure i am clear on what the calller was referring to in terms of the extra deduction from the paycheck. i would say this on the tax question, it is really important for people to understand that the extreme inequality that we see in our country is not a natural phenomenon, an act of god, it is a deliberate results over a set of tax policies that have dramatically brought down rates at the very top by a third, and that that is a good chunk of where the revenue needs to come from to put the economy on the right track and make the investment they need. host: "the washington post"

reports yesterday -- i actually support of the progressive caucus that came out with a plan that essentially would take effect -- take effective tax rates in the clinton area so they would not just repeal the tax cuts for people making over $250,000, it would be all of the tax cuts. i think given the state the economy is in that that is a good proposal. it is important no while tax rates up fallen for the rich, they actually had dropped substantially for everybody in our country. that is not a perception, dealing withe such dea such economic stress. host: patricia is a democrat in washington, d.c..

caller: i am health-care professionals in the washington metropolitan area, which includes maryland and virginia. i have worked with a very rich, also worked with the very poor. i would like to say this country will have to find a way to fund health care for everyone. we are all intermingling in the society. if you are middle-class or very wealthy, you are going to mix with people that are very poor debtor want to take care of your laundry, and your house, your family. if they do not have health care and they contract ecumenical disease, they will pass it on to you and your family -- and they communicable disease, they will give it to your family. guest: i appreciate what the

calller is saying and i want to bring it home to the radical cuts that are being proposed in the ryan plan. that is not just bad for them, it is bad for the country as a whole, because we are interconnected. we are one society. when you have a set of people that are in poor health and unable to contribute it has an effect on the economy of everyone. i completely agree, the calller did a great job of articulating a vision for what types of society we could be and should be. host: 50 and on the line. -- dan on the line. caller: have you ever had a job in the private sector are running a business where you have been responsible for the pay roll in to make money, or have you always been in a think

tank sort of a thing you are in now? my point being is why we as individuals have a compassion for people, i do not see anywhere in our government where we are chartered as a government to do the social engineering you want to do. it is not the government's position at all to redistribute the wealth and correct inequalities. guest: i have worked for nonprofits my whole life, and i am very proud to have done so. i think calller is speaking to a basic philosophical difference. i think we do have obligations to each other, that we are our brothers' keepers and sisters' keepers, that we are interconnected. there is also a place for

individual success, advantage, initiative. we have gone way out of whack to focusing solely on what the individual does, and not how we create the conditions for everyone to thrive. it is in all of our interests to do so. host: don on the line from san diego. caller: i would like to talk to my fellow democrats about the president. he is doing a pretty good job in my view. comparing him to roosevelt. roosevelt had big majorities in congress. he had a bulletproof majority in the senate so he could get stuck past. even though they got it passed, a lot of it got overturned by the supreme court. there is only a certain amount of things that the president can do without the rest of the government backing him up. i just want to talk about that a

little bit. host: are you drinking democratic-based groups like those represented by our guest are just being too hard on the president? caller: i think so. for example, one comment earlier was it should have been larger. let's get a response. guest: the calller is right about this. the contrast between what the president is proposing and what congress is proposing could not be more stark. the president said in his speech last week that he wants to protect and defend the medicare, medicaid, so security. he said he thought the border -- burden should be borne by the

people that had gained the most in the boom years. what the republicans have said is they want to gut the entire social score contract in this country and take us back to an era where elderly americans did not have the security of income or health care. that we did not have health care provisions for the poorest and most vulnerable people in our country. that is a radically different vision that will play out over the next few months. i think the president did a great job last week of articulating the different vision. host: our last phone call. rick in chicago. caller: i was wondering if the guest would comment on his comment when he was referring to not taxing people more as a redistribution of wealth. how does he see that as a redistribution of wealth?

guest: i am not undressed -- sure i understand the frame of the question. i think in our society, everyone creates wealth. people who care for the elderly, the people who build bridges, workers. everyone creates wealth. it is a thing that we do together. the entrepreneurs play a critical role. they do not do it by themselves. they rely on the work and labor of others. it is appropriate in a good society to say we all contribute and deserves our return, and when the returns are so wildly out of skew that we have people at the top making hundreds and hundreds of more than people who are working for a living, that is very dangerous for a democracy, because it means we're not living in the same country with the same

values. host: thank you for coming back to "washington journal." coming up next, we will continue our series looking at what the bipartisan commission on deficits had to say with medicare and medicaid. first, news update. >> home construction rose over 7% in march, the most of the last six months. the commerce department also says building permits rose over 11%. this after hitting a five-decade low in february. the national association of home builders says that each new home built creates the equivalent of three jobs per year and generate $90,000 in taxes. dow futures are up 20 on the news. interior secretary can salazar heads to boston today to outline details of the wind project in nantucket.

130 turbine projects have been in the works for a decade. though the final permit has been approved, it still faces legal challenges from opponents. war on the situation in libya. a senior official is ruling out the possibility of allowing foreign troops to escort me -- humanitarian aid convoy troops. meanwhile, british foreign secretary william hague says his country is sending military advisers to libya to help organize opposition forces with communications and logistics, although they would not be involved in supplying weapons to the rebels or assist with fighting. those are some of the latest headlines on c-span radio. >> this weekend, in a covert affair, we will recount paul and julia child's career during world war ii. afterwards, inventing george washington.

a fresh look at the legends of america's first presents it -- first president. find the complete schedule at booktv.org. >> the c-span networks provide coverage of politics, public affairs, non-fiction books and american history. it is a ball -- it is all available on television, on- line, and social networking sites. find the content any time through c-span library. we take c-span on the road with digital bus of local content vehicle. the c-span networks, now available in more than 100 million homes. created by cable, provided as a public service. host: president obama task a

group of bipartisan folks to come together and look at the debt and deficit problems. that was been -- that was called the simpson bowl condition. guest today we looked up proposals to cut and cut discretionary spending. today we will take a look at medicare and medicaid. tomorrow an examination of the proposals relating to defense and security spending. on thursday the decks -- the guest will be one of the commission members. we will talk about proposals to overhaul the tax cut. on friday we will take a look at social security solvency. our guest for that will be another member, and the stern. joining us now is marilyn serafini here to talk about restructuring medicare and medicaid. the report stated federal health-care spending represents our single largest fiscal challenge over the long run.

why? guest: this is one of the stranger in a few areas that democrats and republicans can actually agree on. health-care spending is huge. it is going up every year. members from both sides and economists agree it is unsustainable. they like to compare it to how it has grown in relation to the economy, and health care is growing faster. that is why it is such a big problem. polls and simpson -- bowls and simpson compared to the congressional budget office, which says health care spending is 6% of domestic product. they worry that if nothing is done, in 25 years, it will be at 10% of gross domestic product and will keep growing from there. >> it could reach as far as 24% if nothing is done. the commission say?

guest: they take a fairly bold position by saying they feel it would be important to create some kind of a target for spending. currently our federal health- care programs, mainly medicare, which is the health-care program for senior citizens and the disabled, medicaid, which is a federal slashed a partnership for the poor -- federal/state partnership for the poor. also, we have to remember the new health-care law is going to -- we will have the health insurance exchanges, and there are federal subsidies that will go to a lot of people to help them purchase private insurance through these exchanges. these are all mandatory

spending. meaning that it is a defined benefit. what ever it takes to get these benefits to these people, that is what the government will spend. there is really don't live it to that. what they're talking about doing is creating a limit, saying this is how much we want to spend, and they are generally talking about gdp, plus 1%, which is a lot different than a growing at 6%. they are talking about bringing it down. whatever the limit ends up being, they are talking about creating a limit. how do they say we're going to put a cap on how much we're going to spend and control the cost on the outside? guest: first of all, it is important to remember that this particular proposal was not agreed to buy enough of the commission members to make it an

official proposal that went back to the president and have further action. what we ended up with was a proposal from the league commissioners and a lot of ideas that came out of various commissioners. it is important to remember that this was not -- the commission did not overwhelmingly come out and say this is what we have to do. host: 11 of the 15 voted for it. -- 11 of 18 voted fo it. r it. guest: what various commissioners did was they then put forth some ideas with how you could get there.

ahe the idea is really that you have some kind of a limit, and the government pays this amount of money for each participant. now, there are lots of details here. it could be a very specified, the amount could be specified, or the amount could be tied to what health care costs, what premiums cost. they could take a low-cost plan, and say we will pay 70% of that, and they could tie it to that. they could have it rising with inflation at a certain level. this is one of the main ideas that will come from the commissioners. this is also an idea that was put forth by congressman paul ryan.

he would like to see this happen. it is a very controversial idea. i spent two full days talking to my sources, asking people if it was about the program. it did not matter what party it was, there was widespread confusion. some said absolutely, it is no different than the voucher. , which basically means you have the person a certain amount of check for a certain amount of money, and they're on their own to buy private insurance. that is what obama said last week. he will not turn medicare into a voucher program. he made it very clear. he made it sound like if you do that you were throwing the seniors to the insurance wolves. that is how he made it seem, that he absolutely will not do this. on the other hand, congressman

ryan will say this is not the same thing. he has a voucher and the plant. he chose to call its premium support. the idea, and there is a very fine difference, but the difference would be the premiums support would be a percentage of a premium. the idea would be to try to cover a certain percentage of the cost of a premium in one of the lo wer-cost plans. again, there is some concerns if that would be enough. it depends on where you set it. the devil is in the details. host: when you look at the percentage is put out for medicare and medicaid. one is increased cost sharing for medicare enrollees. is that what your talking about? guest: that is a different part of the proposal. medicare has several parts, but

the main parts of our medicare part a and heartbeat. medicare part a is for hospital coverage. -- medicare has several parts, but the main parts are medicare part a and medicare part b. what the commissioners are talking about doing is combining those deductibles, so that he would have won a combined deductible of about $550. so you would say that is a lot less, that will benefit seniors. but what is it really important to remember is they would try to reject what seniors to have some skin in the game. -- they want seniors to have some skin in the game. they want them to play more of

front -- pay more up front. most seniors have supplementary coverage. what it does is help to cover some of the additional costs and co-payments, the deductibles, what ever cost sharing there is in the plan. from the first dollar that a person pays, you go to the doctor for the first time in a given year, and you have the bill. then you call on your supplemental insurance to start paying right from the first dollar. the concern is that this tends to lead to greater use of health-care services, and perhaps someone argue, and necessary services. the seniors just do not know what they're buying, and by requiring them to pay some of their own money up front, that that would cause them to think about what they're spending money on and what services they

are looking for a out of the health-care system. the commissioners would say okay, you are responsible. your deductible is only $550, but you are responsible for the first $500 of that. so the senior or disabled person would be required to pick up half of that cost, thereby giving the senior more skin in the game. >> what do they hope comes out of that. guest: if they help -- more skin in the game, and then if they are more conscious of what they are spending. they might think about what something cost. they might even compare services. if they are sent to a lab for lab work, they might look at two

different labs to see what the cost. of course, i have to say, it is very hard right now to compare costs for anything, especially hospital costs, especially physician costs. host: the hope is this is a cost-containment mechanism, that if you bring down demand from seniors, you bring down the cost of health care. guest: exactly. create competition. if you are out there shopping for health care services, the idea that it will create competition and hope would be to bring cost down. host: let's talk about medicaid. there are several different proposals. guest: there are several different proposals. some of them are a bit complicated. we currently have a system for -- right now lot of the states

provide their positions -- doctors and give them back money in federal, state money. the state spends money, and the federal government matches it to a certain extent. the commissioner said they were concerned that states were really gaming the system by taxing the providers, and then giving them back the federal state money. that was pulling down extra money, and they want to stop some of that. in addition the commissioners would like to see the states pick up more of the administrative costs for medicaid. in addition, they would like to see states pick up the responsibility for the seniors were lower income. we call them dual eligibles, because they are eligible for both medicare, and they are also

eligible for medicaid, because they are low income. we could be talking, by the way, about people who are in nursing homes who have spent down their savings and have become poor in their old age because of their needs for long-term care. they would like to see states pick up the full responsibility for dual multiple -- eligible. host: we are talking about the debt commission and what they had to say about medicare and medicaid. our first calller. you are on the phone with marilyn serafini. caller: i am a 20-years-old. i have a parent to as a federal employee, and i have always had great health care. the older i get there before i

realize that is a very precious gift that i can depend on and use whenever i need. it is something that i really appreciate. my question is when i get to my parents' age now, what kind of -- what kind of role will the government play in private insurance when i am 50 or 60, and what will healthcare be looking like when i get towards that age? guest: i have the same question. this is a big question. most of the proposals that are out there, and we have to take a serious look at the proposals that are out there by paul ryan. he really wants to completely restructure medicare so that it

is this premium support model we are talking about. it looks like from this commission, from this commission that was put together, the idea is being taken seriously of limiting the amount of money that was spent. what we have learned from paul ryan is the one to be very careful to not change the program for people butter over 65, because they are too close to retirement, so it is very likely we will not see any changes for people that are nearing retirement. however, for people that are younger and just starting out in the working world, it is very unclear what we will see. we all we see republicans want to have a limit on what the federal government spends on health care. we are really just now seeing democrats get serious about cutting back on this kind of spending. the one thing i can say for sure

is that we will probably spend less on health care when you reach retirement and we are now. host: if you take a look at what president obama wants to do in the 2012 -- 2012 budget. mandatory spending is 2.83 trillion yen. of that he wants to spend 1.73 trillion on medicare and medicaid. how much do they say they could save with what they recommend it? -- at 1.37 trillion. guest: they said they could save 4 trillion dollars between 2012 and 2020. out of that you have discretionary spending and mandatory spending. a lot of what is the mandatory spending is health care. they are called entitlement programs, because, again, they

have set benefits. the federal government must spend whatever it takes to deliver the benefits. by cutting back on these programs and setting some kind of limit, they believe over the time frame they can save $550 billion or so over the same time frame of 2012 to 2020. host: john r. republican in texas. you are next. -- john, a republican in texas. caller: on medicaid, i think it is time for every recipient of medicaid they need to pay $75 per month. if they cannot afford that, if they need to be kicked off the program. guest: there are certainly people who agree with you. there are many people who disagree with you. even people who do not like so much spending on medicaid and feel it is important for medicaid recipients to have some skin in the game, the problem is

that studies have shown over the years that for the poorest people, if you require them even to make a fairly minimum payment every month, that they simply cannot afford it. in the end, you throw these people off the program what you will end up with is these people still getting health care, but they will still end up of the emergency rooms instead of primary-care physicians, and we all know that raises prices also. in the end, the government has to step in and help to fund a some of the uncompensated care about the hospitals to get. whether you believe they should be paying $75 per month, we have some issues with doing that. many people believe you should have them pay a little bit per month, even as giving them to

pay $5 copays every time they go to the doctor. there are many people who believe we should be moving in that direction, getting them to pay a little bit. host: medicare and medicaid is the topic this morning. medicare spending as a share total federal outlays made up about 15% of total federal spending, and medicaid about 8%. other numbers, social security 20%. defense, 20%. let's go to michigan. leon, independent calller. you are up next. caller: i listened to the other man about the $75 issue. my point is this. you had a medicare. the program is supposed to be big government run by big government.

you just showed me a pie chart of the budget. we just spent $500 million on a no-fly zone in libya. the united states occupies 175 countries with military troops. you want to talk about government controlling the medicare program, and you can pay for this. the medicaid problems that exist today are only because our government has put us into a crunch where so many of the -- i cannot find work because everything has gone out of the country. guest: you are not the only one who feels this way. for there are many people that believe there should be cuts and all kinds of programs. the commission has proposed many cuts along the way. the four trillion dollars they're talking about in

reducing the deficit. that said, we still have the basic problem that health care costs are growing faster than inflation. really democrats, republicans, everyone seems to agree that that has to stop. not everyone is saying you need to cut benefits or you need to have people paying more, but there are also suggestions in this commission from these commissioners, and also from others that are trying to make the program more efficient. for example, these commissioners talking about trying to find at some efficiencies in the system. for example, spending more money to come back on fraud and abuse. that is a no-brainer for many people, because when you make an

investment on that, it is actually a fairly large return. they are also talking about expanding on pilot programs that were in the new health-care law. for instance, accountable care organizations and medical homes and bundling payments. these are all technical terms, but they would restructure the way that the health care is working, so that you can be more efficient with your care and better coordinate care, and hopefully bring the costs of havcare down. in the health-care law, that is the one big complaint that both democrats and republicans share this. it expands coverage. most people believe it did not do nearly what it should have done in terms of bringing down costs. both for the government and the

individual. those are related, but they are really two different things. what drove the health care reform process to begin with, the public wanted health care costs back and check. they were tired of seeing their premiums rise every year by sometimes 30% or more every year. they were very concerned. really, this is what drove the health reform process. there is a lot of concern in the end what we ended up with was expansion, but not as much as was needed to help control the cost. host: let's go to cindy in arkansas. caller: the health-care law they just pass was putting all these people on medicare. i have a son that was her in accident when he was 22-years- old. he was put on medicaid because

he had no insurance because he was 22. he could not find a position here. what are these people supposed to do when they cannot find a position? they will still have to go to the emergency room and not get the primary care they need. guest: you make an excellent point. starting in 2014, we will see a lot more people with health insurance. we are talking about over 30 million people getting health insurance and coming into the system. that is the first issue, we are expecting some a short distance -- shortages of doctors and availability. depending on what area you are harder for someo be people to get an appointment with a doctor.

the second issue is that will make it particularly hard for medicaid beneficiaries to get in to see a doctor appeared in there are many physicians who will no longer take medicaid, and that is because of medicaid pays the positions less than private insurance does. it even pays less than medicare pays to the doctor's. a lot of the doctor simply say worth my time. wor one of the things that health care law does is it increases, i think by 10%, the pay that the primary care physicians get from medicaid. the federal government will fund the increase for a while, and then they will stop. their hope is that the states will then continue to pick up the extra cost of paying the physicians more. this is all geared towards the very problem you are talking about, getting more primary-care

doctors tuesday in the business of providing care to medicaid beneficiaries. this is a very complicated issue, and when we have been grappling with for a long time. basically for about eight years now -- there was a law in 1997, and it had an unintended consequence of the putting into law physician payment cuts from medicare. we are talking about cuts -- if it happened this year or next year, we're talking about over 20% cuts. that is a lot of money. this was an unintended consequence. we know that nobody wants this to happen, and that is why every single year congress has stepped in and stop the cuts from happening. as a result, the cuts get bigger

and bigger each year. the health-care law did not fix this problem. what the commissioners would like to do is they would like to freeze physician payments for medicare in 2013, a decrease them by 1% in 2014, and during that time the department of health and human services, the centers for medicare and medicaid services would be working on a plan to completely restructure how doctors are paid in medicare to try to get past this problem and to do away with this unintended consequence once and for all. host: here is a tweet from the viewer that wants to know if you can comment on the compressor caucus people's budget. guest: i do not know anything about it. caller: good morning.

host: you have given me a perfect opening to explain what we are. guest: we have nothing to do with kaiser permanente, which is a health care plan. it is a non-profit news service. we write stories for "the washington post", "new york times." we are funded by the kaiser family foundation. it is an educational foundation. the mission is to educate both the public and also policy makers about health care policy issues. kaiser health news is funded by the foundation, but it is totally editorially separate. host: here is another tweet --

guest: perhaps, but that would not explain why they keep fixing it every year. they certainly meant to control cost and constrain costs and bring spending down somewhat. they did not intend for it to have as big of an impact as it has had. host: gym, a republican in pittsburgh. good morning. caller: i want to thank marilyn serafini for mentioning the ryan plan will have no effect on anybody over the age of 65. i am a 70-year old medicare user. i appreciate that, and so do all of the others over age 65. i would like to mention that we pay for medicare today.

we paid $96.50 for medicare b. for the supplement it is $73 per month. the medicare freedom blue supplement went up 35% this year under obama care, who is going to save us seniors some money. host: hold on a line. guest: you raise a good point, that you are ready paying money into this, and the supplemental coverage certainly is not free. you are paying for it. nevertheless, what this commission is saying is that you need to be paying for some of your medicare costs right from the first dollar, and that is the point behind limiting what your supplemental insurance could pay.

whether because of that your supplemental insurance premium would go down, again, we do not have a lot of details. these are really just concepts. host: let's go to the democratic line in detroit, michigan. good morning. caller: the first thing i would like to say is i do not appreciate the assumption that senior citizens are idiots to go to the doctor for pleasure. we do pay for what we did. my husband and i pay $240 per month. my husband is still working, so he still gets taxes taken out of this check. our copaiba to the doctor has gone up $15 in one year. we paid for what we did. -- we pay for what we get. think you very much. -- thank you very much. guest: some here in washington

would -- they do not know you personally, but some here in washington would say it is not a matter of you going to the doctor for entertainment, but the concern would be there is not a lot of court nation, and that there is not a lot of shopping for services. for instance, if you go by a new tv set, you will compare the prices of best buy and wherever else he might go. i think the intention is to get seniors, and i am not taking a position, i am just telling you what they are thinking, but the thinking is to get seniors shopping a little more, to try to negotiate prices and talk to doctors about prices. the thinking would be is that would hopefully bring down some of the prices. host: what about the quantity of care? guest: there thinking it is too

much. the study after study shows of that you do have too much care. some of that is because duplicative care. you might go to one doctor who takes an x-ray, and then you might go to a primary-care doctor, and then you might go to an orthopedic. you might get the same x-ray or lab work done by multiple doctors because lack of coordination of care. host: state augustine, florida. scott on the independent line. and caller: and you keep telling people that occupancy in this country is going up. it is just the opposite.

you constantly say skin in the game. i do not know if you ever got a paycheck, but you all know they take tax act. they take social security out. then they take medicare out of separate. host: let's take that point. guest: as you said, and as one of the previous calller said, it is not like you are paying nothing. you do have skin in the game. you know you have had tax is taken out and paying deductibles and premiums. you know what the costs are. nevertheless, these folks here in washington believe that if you do not have as much ability to use your supplemental insurance to cover from the first dollar of coverage, but that you will go out and be better shoppers of health care. host: molly a republican in

fairfax, virginia. good morning. you have to turn the television down. i will put you on hold. she let, democratic calller. good morning. -- sheilah, democratic calller. caller: first of all, medicare, our seniors have paid into the system, no doubt. they are basically entitled to what they have paid into without us having to take any more money from them. i know that seniors have a well planned of their future. they may still be in the hunt. then we have medicaid. these are people for baby did not have a future medical portfolio. medicaid can be better monitored. it can elevate a lot of waste.

when you go to the doctor's, let's not forget how many years they go to school, and their drive to help save lives and save people. then you have your insurance cost. i think the insurance companies and all of these groups need to work together. their premiums can be outrageous. even with the company you work for paying into it as well. cobra is governed by the u.s. department of labour. as a democrat, i will tell you that we got stuck with the $275,000 hospital bill that the u.s. government would not help me fight. how can hospitals take those [inaudible] ? guest: i did not much in this

earlier, but one of the things that the commission wants to do -- the new health-care law sets up this independent payment advisory board, which has some authority to recommend ways to save money in medicare, and one thing it can do is recommend cutting payments to medical providers. the hospital cut a deal early on with the white house that keeps them separate, keeps them from facing these kinds of cuts, at least for the short-term. this commission says there should not be anybody who is immune to these kinds of cuts, and that moving forward we need to be looking equally across the board at all of the different medical providers for cutting their payments if necessary. but you also mentioned a good point about doctors and the

kinds of bills they wrapped up in medical school, and it is getting more and more expensive. that is why we're seeing fewer and fewer positions going into primary care because it pays less, and they still come out of medical school with the same bill as the neurosurgeon who might be making significantly more money. host: the commission said that if you go after the fraud and waste, that you could save about 1 billion over time. guest: this is one of those areas, waste, fraud, and abuse, the studies are conclusive that what ever you spend on waste, fraud, and abuse, that you will get more money in return. what has stopped us from spending more money to get that kind of return is there is an up-front cost. host: the big savings comes from medical bell practice changes, a

statute of limitations. the commission says that could save about $70 billion. explain that more. guest: this is a huge area, medical malpractice. the problem with medical malpractice is that it is a very partisan issue. republicans have been set on wanting to cap non-economic damages. pain and suffering. they want a cap on that. they feel the court awards have gone out of hand. that has raised the cost of medical malpractice insurance for physicians and has really caused a lot of defensive medicine is. a physician who might not order an mri is now ordering that mri. that is what they are talking about. they do not mention tapping on- economic damages, but they do mention health courts. this is something that some states are already trying and

has some level of interest from both parties. this is something i think we could see a lot more of. this is a specialized court that would simply hear these cases -- it depends on how the state sets it up whether there would be any awards in the kinds of group it could present. this is an area that has been gaining in popularity. host: here is a tweet -- guest: well, it is absolutely not the fault of the user. right now it is virtually impossible to call to hospitals and find out what your bill would be for a hip replacement. it is virtually impossible to