then we will discuss the white house announcement that taxpayers could lose about $14 billion of the money spent on the auto industry bailout. later, the president and ceo of the national association of student financial aid administrators has a look at the student loan application process. "washington journal" is next. ♪ host: formal federal chairman alan greenspan said -- former fed chairman alan greenspan made some statements. the "question of post" spoke -- washington post said federal

dollars are poorly being tracked. and there is a nonbinding resolution asking president obama to provide a rationale regarding current operations in libya. that will be the topic for our next 45 minutes or so. it will be on your thoughts on what president obama should be saying about it. as well as the vote yesterday, and if it is significant. the numbers to call or at the bottom of your screen. you can reach out to us by e- mail if you want. you can also reach us on twitter.

the story comes from the hill this morning regarding house proceedings. the house friday approved a resolution that scolds the obama administration for failing to seek congressional authority on the military operations in libya.

we will read more on this. we will have some sound on this as well in a few moments to give you a flavor of what happens on the house floor. in the meantime, here is how you can participate. we are looking at the boat as far as the rationale on the -- vote as far as the rationale on libya. once again, the numbers are at the bottom of your screen. you can read just on e-mail and twitter. birmingham, alabama, you are up

first on our democrats line. what do you think about yesterday's vote? caller: it amazes me that they are seeking a rationale for our involvement in libya. we should have had this a long time ago with iraq and afghanistan as well. we see how much money the task -- taxpayers will lose or waste in these war zones with no accountability. we have spent $1 trillion, and all of the programs that the republicans are deciding to cut, we could actually find the savings and much more if we took a hard look at what we are spending in these other countries. host: what about specifically about yesterday's vote that it had to come to that? >> it was warranted. it should have been in place for

the previous wars. host: the next call is from tampa, florida. caller: what i wanted to save was basically, i agree with the previous caller. i think what we have to do is have some sort of limitation as to when we can go into military conflicts. and all-out war, bombing -- there should be a process for the people to think about if we want to go as a nation into libya for "x", y, and "z." there was a brat -- bad precedents set with the korean conflict. set with thedent

korean conflict. host: what about your thoughts regarding president obama? caller: many people want to say that sarah palin does not know about what is going on in the affairs, but does anyone? [unintelligible] host: here is a comment from twitter. here is what the house speaker said yesterday. >> this resolution puts the president on notice.

if he does not get it right, congress will get it right. i yield back. host: new york is next. democrats line. caller: mr. boehner is a piece of work. the republicans are so against president obama that it borders on insanity. one really has to be taken aback by the whole situation by the political atmosphere in washington, d.c. host: can you apply that specifically to yesterday's vote? caller: not necessarily. the republicans would not be reacting this way if it were a republican president. we have a democratic president and the republicans are like an

addict arnold when it comes to the economy, war, -- been a dick arnold when it comes to the economy and war. host: when it comes to libya, what should the president do? the president has access to intel that we do not. i trust him to stay the course necessary. host: independent line, alabama , close to low bill. -- mobile. caller: i am terribly concerned about what is going on in the middle east.

i am so afraid that what we are seeing is a smokescreen and going to end up with a very radical people in charge of these countries trying to supposedly get freedom. i just have to believe or see what has happened in the past. if you go to iran in the past, when one leader was taken out of power, and they put in radical islam believes out there that everybody has to live by -- they do not want freedom over their like people think. i think they want to push israel right into the sea. it concerns me that we are not noticing what is actually going on. it is a small strip of land. israel is very tiny.

religion over there is ingrained in their society to the point where their governments -- host: what are your thoughts on the current operations in libya? caller: i think we spend too much money on countries like this. they will continue to fight with each other no matter what we do. host: more from the "kill." -- hill." they have more comments from the house speaker brainer. -- john boehner. we will hear from one person in a second.

california, and democrats line. caller: when muammar gaddafi in the previous administration, president bush, got together to negotiate a peaceful relationship between the two countries, ththat is when the people turned against gaddafi. people did not say much about being a friend of terrorists. being a friend of terrorists. people turn against him, and i think the united states should leave those people alone and let them work things out of themselves. we support terrorists when we support those rebel leaders. host: joe of twitter says this.

here is what was said about the amendment yesterday. >> we have undertaken a huge mission through the united states in the name of nato, without coming to congress. that is what we are debating. if on the other hand the information that the administration has communicated as of late to the congress, if it suggests a lighter footprint, there should be no difficulty in pulling out of libya in 15 days. if there is, we need to start asking questions about how deeply enmeshed we are, and if our participation is truly no boats on the ground. host: the amend failed yesterday.

-- amendment failed yesterday. oklahoma, republican line. caller: in the recent defense authorization bill, congress is authorized the u.s. to give the president and limited war making authority -- unlimited war making authority against any sources of al qaeda in the indefinite future. that means that the united states is at war with the united states, because the united states is associated with al qaeda, because the united states are helping the rebels in libya, which are associated with al qaeda.

problem that, the people cannot understand is that under our constitution it is supposed to be extremely difficult to engage in war. congress is given the power to declare war. congress is a fact-finding body, which finds that the us is in a state of war. host: the president in yemen nearly survived an attack.

riverdale, ga., your thoughts on president obama providing a rationale for libya. caller: good morning. i agree with some of the callers this morning. the rebels in libya that we are helping could be in cahoots with al qaeda for all we know. i think president obama needs to enlist an exit strategy.

we are in pakistan, afghanistan, and now libya. i am an independent. we need to come home and fix our country. the libyans, egyptians, they will be all right. the arabs, they will be all right. we need to come home. the president needs to listen to colin powell. we need some exit strategies so we can come on home. host: sal off of twitter says this. we will continue on with your thoughts on president obama having a rationalization for what is going on in libya. for a few moments, we want to

focus on the news from yesterday. john edwards broke law to cover up his indictment. j. andrew curliss is on the phone. can you explain what the prosecution is arguing and what edwards defense is? guest: the prosecutors have kept it simple. they said all of the hundreds of thousands of dollars that went from -- to wealthy donors involved in the edwards campaign paid the expenses of his mistress for a time frame and should have been reported as campaign contributions, because they were made to keep the campaign going. the edwards' team says that is not what the law says. what you are seeing is a focus

on the intenst. a big part of a criminal case is the intent to violate a law. the intent to violate a law. they have to know what it is and squint their eyes at it and say, i will violate that law. yesterday afternoon, standing before the courthouse, after his first appearance, he says i never knew that i was breaking the law. host: hold on for a second. we have tape from mr. edwards yesterday. >> i regret for the rest of my life the pain and the harm that i caused. , and iot break the law th never ever thought of as breaking the law. host: as far as his argument is concerned, what will be the rationale from his lawyers?

guest: they will attack him on several fronts. the main one will be the that the money is to hide the affair from his wife, and it had nothing to do with the campaign. they will say that there is a lot of people to use money for that sort of thing, and it was not connected to the campaign. they have experts to say even if it was, it is not a criminal violation of the campaign finance law. that is not what the campaign finance law is about. it will be a battle of the experts for some time. host: is there any evidence that the money exchanged in this process was filtered through any

campaign account? guest: not at all. that is not the allegation of the government. they looked at the campaign account in the money that went in and out. it was not part of any indictment. if it was all money flowing directly from donors in going through an intermediary, an interior decorator in north carolina, and then the mistress or campaign staffer. host: as far as the department of justice's approach to this, why are they making this a criminal case? guest: this has gone pretty high up in the justice department', and they are convinced that this money would not have gone from these donors to edwards'

mistress at the time that it did. this was late 2007, early 2008, before he dropped out. this money would not have gone but for the candidacy of john edwards. they are convinced that this qualifies as campaign donations. host: he could take a plea agreement on this couldn't he? guest: he could. we are reporting today that it got down to a final offer that edwards could have pleaded to three misdemeanors, being the value of a dollar amount. it was rejected, because he likely still would have faced some prison time. host: what is the timetable now that the indictments have been

handed down? guest: later this year, we should get to a trial. there will be a battle of experts and several attempts by the edwards team to have this thrown out before it would get to a jury. there could be a trial later this year. host: j. andrew curliss joining us on the phone. he is a reporter with the "news and observer" in raleigh, n.c. the t we have more information on our web site at thec-span.org. thanks for your time. guest: thank you. host: yesterday the house of representatives voted on a

resolution asking president obama for a rationale, on the invasion in libya. we continue with your comments with norm on the republican line. what do you think about yesterday's action? caller: congress is doing what congress does. you had a few callers that talked about the iraqi war. when we voted in our president, he said he would pull out of iraq and afghanistan. there is a lot of confusion. host: what does the president need to provide in your mind as far as the situation in libya? caller: i am sure it is information he can not divulged.

he has to take the lead in every situation -- he cannot divulge. he has to take the lead in every situation. host: in 2002, the house and senate authorized president bush as far as the operation in iraq. as far as the operation in iraq. the resolution approved thursday evening. north carolina -- caller go ahe. go ahe. what do you think about yesterday's action concerning

libya? caller: i wanted to make a comment about john edwards. host: we are talking about libya right now. caller: i have no comment about libya. host: go ahead and make your comment. caller: i wanted to speak about -- host: if you want to join us with this question, here is how you can do so. the numbers are at the bottom of the screen. the screen. journal@cspan.org is the email.

the obama administration -- the headline says it will host bahrain to push reforms there.

hampton, va., co-head. caller: hello. -- go ahead. caller: hello. i was initially against president obama, even though i am a democrat, invading libya. i thought, we need to mind our own business. i recently changed my mind, because of a situation with a 13 year old boy in syria. i have a 5-year-old boy. i cannot imagine going outside fighting for my freedom and being taken down the way these people have been taken down. we initially thought to this country, we had to fight. we had to make it so that we could get our freedom away from

the united kingdom and things of that natioure. i was initially against them and being libya. many middle eastern countries do not take the united states seriously, because we are spread so thin. look at the way we are being treated by our own government right now. it is not as bad as the middle east. republicans are trying to take us back to the 1960's. they are trying to strip away our rights so that we will have to go on the streets and fight for what we deserve. we should not turn a blind eye to what we see going on over there. when you do not speak up against something, that means you condone it. host: the vote on the rationale, acceptable to you or not? caller: to be honest with you,

the republicans and do things -- it is like give or take. we will just push it underneath the red. anytime barack does anything -- underneath the rug. anytime barack does anything, it is not a good thing. in iraq ande war's afghanistan were started over oil not terrorism. they are not invading africa, because they have nothing to offer. host: missouri, democrats line. caller: i believe it was a show, a waste of time, that is what

the republicans do, oppose barack obama. i believe the president would not care if the congress would declare that this is not a war and we need to get out. the president put out public statements before we went in. it is a you in action not the u.s. invading anybody's. -- u.n. action not the u.s. invading anybody. we are fighting a war in afghanistan and iraq against who? it is ridiculous that we are spending so much money in the losing human lives over this mess. the republicans do not want to do anything but oppose the president. host: political reporting that gates is conferring with troops.

san bernadino, ca, mike on our republican line. caller: another example of political posturing and empty meaningless back-and-forth. the energy giants are finding whatever market they can create and meanwhile are feeding the public this nonsense. host: what about yesterday's

action? caller: it is empty and meaningless. host: it is a non-binding resolution. louisiana, go ahead. caller: thanks for taking my call. i would like to echo what the previous caller was saying. as i recall, president eisenhower warned the people of this country about military industrialized complex. concerning the libya matter, it concerning the libya matter, it is very clear to any outside observer that democrats and republican parties dominated the u.s. congress are pretty much in distinguishable when it comes to

what president eisenhower warned us concerning the military industrialize complex. host: should the president provide a rationale? caller: absolutely. i think it is very clear. he should provide an explanation as to why we are there. if you look at it from the perspective of a great power like china or the soviet union -- rather the russian empire, they are sitting back watching the united states of america deplete its resources militarily, economically. it seems to me they are biding their time.

the objective of an outsider, the governing authorities in china -- >> host: florida, democrats line. caller: i am a die-hard democrat and i agree with a republican caller to some extent. there was nothing binding so it was political theater. he did the same thing with bush as he did with obama. to establish a no-fly zone. we did that. now we are fighting with the rebels and we do not know who they are. obama is bordering on grounds of

impeachment, because he has violated an act. the woman that called about iran, does she know her history? using the shop as an example is not a good one. thanks for taking threeshaw -- shaw as an example is not a good one. thanks for taking my call. host: next caller. caller: the united states army was not put in place to go around and intervene in every war around america. it was put in place to guard this country only.

unless we had to go to war with another country. host: what does it mean about libya? caller: we should get out of libya. let them take care of their own business. they are not going to listen to us once we leave there. they are going to do what they want to do regardless of what america says. we should get out of afghanistan right near and iraq. host: somerville, alabama, that was built on a republican line. the top democrat on the house committee will talk about many things related to the jobless things related to the jobless numbers. sander levin spoke about addressing the national debt and also on whether tax breaks for

upper individuals should be extended. >> the upper income people have done so well these last 10-12 years, while 90% of the population has had stagnant income. for the upper income groups, it has gone up. we have more income disparity today in what we have had in a long time. i am confident that what the president says about the tax cuts is where he stands. i think it will be resolved and president obama reelected will make sure there is tax equity. that means that we cannot extend beyond next year the upper income tax cuts. host: you can watch more

tomorrow at 10:00 right after this program. you can also see it at 6:00 p.m. on c-span. you heard about the outbreak of e. coli in europe. here is a follow-up in the newspaper this morning. they are trying to tighten rules on food safety here in the u.s.

"the wall street journal" reporting on alan greenspan and the interview that he conducted talks in about tax breaks -- talking about tax breaks. it was regarding going back to the clinton era tax structure. a discussion about the economy coming away in a few moments on this program. one more from the "washington

post" about the low income housing in the united states. you can read more in today's "washington post." independent line. caller: thanks for having this forum.

i wonder if the politicians watch this program on saturday mornings. i wonder if they are as i wonder if they are as concerned about things as the people are here. it is nice to hear from the different colors from the different sides. host: us seven politicians are watching, what would you say concerning libya? -- assuming politicians are watching, what would you say concerning libya? caller: get out. before we went in iraq, the night before we launched our shock and are, a couple of cruise missiles were launched a. the gloves are off in terms of world leaders.

if someone wants to be a terrorists, they can beat the president of a country or not. we are wasting more tax dollars bombing countries, because of the industrialized complex. host: california, democrats line. caller: i was wondering why is it that the republicans are always saying the american people are on their policies. what are they emphasizing on that fact when the constitution says that if you are not born in america, you are not fully in american. does that mean the american people are all white people or all republicans? who are the american people? host: west virginia. host: west virginia. caller: i think it is in

violation of an act. the actions of the congressmen put them and the president up for impeachment by the full powers of the senate. host: tennessee, you are next. independent line. caller: i think we need to get out of libya. these other countries will catch us with our pants down. countries over their hate the united states anyway. if we are not careful, they are going to bomb us. host: you would support a pullout within 15 days? caller: yes sir. host: the front page of the

"washington post which >> "washington post which >> supports -- discusses drone attacks.

georgia, democrats line. caller: i am a retired marine corps seal grade officer. i worked with military intelligence during the 1980's and 1990's. this is our business. in an english court of law system, the gaddafi regime was found guilty of killing about 200 u.s. americans by blowing up an airplane. i am conflicted about this entire engagement in libya, because on one hand, i am looking forward to seeing this guy fall and being brought before the international court of justice, which is where people lost -- belongs. i am talking about muammar gaddafi. the president did exploit to the war powers act. he told the american people we were going in for humanitarian purposes to stop the slaughter

of civilians. now he has said that we are there for the long haul, and the goal is regime change. he has been concluded himself. if he is so concerned about the humanitarian crisis, do you know how many civilians are being killed in the bombing t is tripoli? a lot. i wish he had said from the beginning that we are going in for reaching change, being up front and honest about it. we would not have the dilemma now. republicans are dealing with their responsibilities under the war powers act. after 60 days, they have a right to shut it down. they are concerned about muammar gaddafi getting away. they told the president, we are putting you on notice. you may have to be clearer about

what we are doing and how long we will be there, or we will stop the funding. it costs a lot of money for this operation. there has been no supplemental for the department of defense, which means in the middle of two other wars in afghanistan and iraq, you are taking equipment away from the troops that have to fight those wars. it is not being supplemented. host: time for one more call, raleigh, north carolina, republican line. caller: i believe we should pull out of libya, bring our warships over and protect afghanistan with them. what we are talking about in congress yesterday is far worse than what nixon did.

not going through congress is just as bad if not worse as what mr. nixon did. host: we will take a look at the state of the auto industry coming up. the pages of most of the paper this morning reflects economic news by the labor purer -- bureau. bureau. the unemployment rate changed to 9.1%. 54,000 jobs were added in may.

the employment number is up 4.1%. economic news will be the topic for our next segment. kevin hall will join us from the mcclatchy newspapers economics. we will be right back. ♪ ♪ ♪ >> he was known in the day as czar reed.

he was impugned as a tyrant, because the overturned a long standing congress. >> sunday night, james grant on his new biography of thomas reed. you can download this and other"q and a" podcasts at c- span.org. this weekend on american history the sex.m.cspan 3, discrimination lawsuit against the paper with eileen shanahan. we will look back 50 years at america's failed attempt to overthrow the castro regime at the bay of pigs. it the complete we can schedule an c-span.org/history.

each year, congress works to pass the spending bills. the house has started work on the first two of the 12th. -- 12. you can follow daily hearings into videos of the house and senate sessions. this weekend on book tv on c- span2 live coverage of the chicago printers row, and in depth with a live studio audience and your calls and questions for the university of chicago law professor eric poster. posner.'tp --

you can sign of for the schedule. "washington journal" continues. host: kevin hall is the correspondent for mcclatchy newspapers economics. one administration called the economics a bump in the road. guest: is it a pothole, or a gaping hole filling up over the next several months? my instinct is that it is a bump in the road and factors have weighed heavily on the growth, among those the crisis in japan. the automotive is a big part of the manufacturing component. friday appointed to a slowdown

in manufacturing. -- friday had data that pointed to a slowdown in manufacturing. hopefully it will get better as prices come down. host: a lot of people make comparisons on the bigger numbers we saw and then these. is that a fair comparison? guest: no. the average of a three month is about 184. you are still creating more than 150,000 jobs over three months. that is the number you have to create to start eating away at the unemployment rate. and number that is 54,000 is really bad, because it is well below the 150. no one thinks this is a good sign for this year.

host: the differences between describing it as a pothole or a pit -- what do we have to see over the next months as far as whether one of those things comes true? guest: there are a bunch of indicators such as the second indicators such as the second quarter growth numbers. there is a sharp deceleration. the hiring numbers. consumer sentiment, retail sales. durable goods. a bunch of different elements point to whether or not the country is firing or misfiring. is it a slowdown like last year? the question is what ammunition do we have? congress does not want to spend

any more money for stimulus. the federal reserve does not want to buy any more treasury reserves. you are going into a slowdown and god forbid a recession. host: would that be a double-dip recession? guest: yes, that is what it would be if we fell backwards. the problem with sluggish growth is that if something happened to a saudi oil field or violence in europe, and external shock could throw the economy in a tailspin. that is where we are vulnerable. host: you talk about these outside influences. would we see a higher number than what we saw yesterday? guest: i do not think anyone is predicting a gangbusters economy.

-- robust numbers in a gang busters economy. there was a bubble in housing and an employment. people are asking what is full employment? -- full employment. some say 5%. that was the definition. most people are thinking around 7%. that changes the expectation. we as a society have not grasped as low as it has been. expectation is a big part of this. host: we are discussing the economy until 8:30. here is how you can ask a question.

the numbers are at the bottom of your screen. you can reach us on e-mail and a twitter. there was a response from a senator from tennessee talking about private sector jobs specifically. here is what he said. i apply to get your response. >> i want to talk about making it easier and cheaper to create private sector jobs here in america. america. we can start by helping companies make what they sell in the united states -- make in the united states what they sell in the united states. some corporations are making it hard to accomplish. last month, the national labor relations board made the boeing company not build in south carolina, suggesting that it cannot expand its operations in one of 22 states with right to

work laws, protecting the rights of workers to join or not to join a union. host: what are the political elements concerning job creation? guest: debt issue of whether boeing could transfer toth -- that issue of whether boeing could transfer right to work e -- transfer to a right to work area is a factor. homeowners can not bowel -- borrow against your house with expectation. these things have changed the equation for the consumer. that is a fundamental reason why you are not seeing a lot of hiring of people.

without customers, you cannot add work. host: there is a story this out greece lookingbi at their economic situation in the taking out another bailout. the taking out another bailout. year is one line. -- here is one line. you may want to consider a bailout. guest: the message you are sending is not necessarily the expectation. quantitative easing is a fancy term for buying enough assets so you buy down the yield. the treasury bond will pay 1%

instead of 2%. it forces people to take risk taking. expectations are a big part of it. they can try to keep rates lower than what they expect. these are designed to keep things moving along. people should be realistic in their expectations of how quickly this economy can recover. recover. you cannot -- she and a creeg from harvard wrote a book called "this time is different" and they wrote about 800 years of financial crises and each time people made the same mistake, it's different from our economy.

we say we're the world's biggest economy, it's different for us. well, it's not. i worked from mexico during the mexico criteria and we're following the same script. when you have the financial skeletal system of your economy crashed, it doesn't snap back right away. it takes time to reverse imbalances, to work off the debt. homeowners are working off debt. they're not working off by savings. it looks good on paper but a lot of that is banks for giving debt. host: kevin hall with us in the late 30. middleburg, florida, republican line. francisco, good morning. caller: i was in reference is this the employment 1% lower even though they added 54,000 jobs, i'm former navy marine corps, i just got done retiring 22 years of service and graduated from my associates degree and my economics class,

we're discussing a lot of this stuff last year, before the numbers keep changes. our instructors say lie is figure, figure is lie. if these numbers were correct, media and wherever else keep pushing the media. the numbers don't add up. the numbers don't add up. if you sit down and look at the track records, you vote -- you see that something is wrong. 54,000 added jobs at 9.1% unemployment rate and it's supposed to be dropping. no, i don't think so. i look around here where i live at locally. there are so many place houses that fore closed on, it's not even a joke. my property is worthless right now. i cannot sell the property for what it's worth. just like everybody else. we're stuck between a rock and a we're stuck between a rock and a hard place. host: where are you going to school for? caller: i'm going on for computer networking system and administrator.

host: was that your first career or a career switch for you? caller: that was my hope, a career switch but i'm going back to school to get my certification because nobody wants to talk do you when off piece of paper in your hand. host: thank you. guest: it's funny that you mentioned. congratulations on getting you degree. the good news is at least the jobs numbers that you're questioning but in those jobs numbers, one of the areas that are showing consistent growth has been professional and business service and your computer area is one of those that will be continue to grow. you're going to hamper by your geography because you're in a state that has been distressed and home sales are virtually the only sales. and i think that's a problem and one of the things that is characterizing this is that you have people who aren't able to pick up and move to another part of the country because they've of the country because they've got their problem with the house. banks are sitting about a million properties and you've

got another million property in the process and all of this is banks not wanting to lead because two years from now, they're not sure what the house they're not sure what the house is going to be what they're giving mortgage at today. host: health care is an area that saw an increase of jobs. transportation, warehousing, 8,000 jobs and construction, up 2,000 jobs. is that constructive number good? guest: again, you have to look at these moving averages over three and six months and there's nothing that points to a rebound in construction. any positive number is good but i don't think we're about to see an explosion in residential and business construction. the manufacturing numbers have been the most positive over a steady climb and they declined last month but i do think, even the national association of manufacturer said they thought it was a temporary thing. host: now jobs going down, the cheap number is government jobs. 29,000 down followed by retail

and manufacturing down 5,000 and leisure and hospitality down 6,000. guest: yeah. i don't want to defend the administration. someone else can do that. but if you look at what the economic stimulus did, they're going to be arguing next year in the presidential campaign whether it worked or didn't work. one of the things that clearly happened is you're starting to see these job layoffs nowle they would have happened last year, a year and a half ago if not for that stimulus money. if you had layered those job losses on top of the private sector job losses. so you know, a lot depends on how you're measuring success. if you're measuring the stimulus success as the economy roaring back to health, then obviously it was not a success. you're measuring it about keeping a bad situation from spiraling into a really disastrous situation, then you can argue who did that. host: danny on our democrats line. good morning. caller: good morning. last night on cnbc, there was a program on about the rise of china.

it's on again sunday night. everybody in this country needs to watch. these job problems were predicted by ross perot. we've seen millions of jobs go off to asia and china and mexico and if we don't six that problem -- the only way we can compete is we lower our wage scales to the equivalent of china and that's about $3,000 a year. i'm not exaggerating. that's the real numbers. this country will go into a this country will go into a revolution. we've got many times and millions of people who are unemployed. we have people who have no hope of get iting a real job. the economist, the big corporations wanted this. they make money by global trade whether they pay cheap products in china and they wanted this. the economists are making predictions based on what they

learned from college but they've broke then supply and demand system. the demand side has been exported to asia. exported to asia. people can't consume in america if their wages are driven down. all they can do is pay their bills these days. host: we'll leave it there. guest: i think a clarification that ross perot was wanting a great second sucking sound in mexico but he's wrong. it was going to china. china's succession to the world trade organization changed everything. the chinese model, the caller is absolutely right to focus on the chinese model. and it's not that we haven't benefited from it. if you read the last chapter of alan greenspan's book, he warned what he thought the world would look like in 15 years when all the benefits of cheap chinese imports go away because china's prices are rising. today, china is not the low cost producer. if you look at a fender guitar

or a musical instrument, they're not made in china anymore. it's made in indonesia. mexico lost jobs to china because it no longer is the low-cost producer. this is the first time in world history that we've had awe these countries doing well at the same time and not having plagues and scourges and wars and in fact, sadly, it's a curse of plenty. host: you mentioned alan greenspan, are you surprised he told cnbc yesterday looking for -- looking again. numbers as far as tax rates are concerned, he said he would support the idea of taxes going back to clinton area levels. did that surprise you? did that surprise you? guest: it surprise med a little bit, i guess, do i think he's right is an interesting question. we did a story that didn't win a lot of friends but it pointed out four different measures that americans by historical

standards are undertaxed. and if you wanted, you know, everybody's talking, the world's coming to an end. we've got to reduce the deficit. it's a way you get all of that done by going back to 1999 tax levels. raising a 3% rise in top tax rate isn't going to cost the sky to fall. we've had a very healthy economy in 1999. arguably, there were other factors that boosted the economy, the goebel situation, but -- global situation, there's so much demagogue in this stuff if you mixed spending cuts with irreparable increase in taxes back to where they were you could get that. host: barry on our independent line, good morning. caller: good morning. i served the military during the vietnam era. when jimmy carter was in, you know, oscar, that he was one of the greatest president ever, he

took a bum deal with the iran situation, but, you know, when i was in new york, i was one of them people that got hired but through the seated program and they had some government programs and they also kept factories, you know, in the cities, in the urban areas, you know, back then and i believe it helped a lot of people get back to work. but one thing about the unemployment rate when you look at it and i think this is under the reagan administration. it only affected people from the -- but i come from the urban city where i seen the unemployment high and you don't count these people when you look at it, it's like 15-20% in the urban cities and some rural areas was basically tore and people don't have the money. so i think the stats is unreal. and i think you can't blame barack obama's administration for what's going on if it's a ongoing thing and you need to tax the rich because they're getting richer and the poor is getting poorer. so let's be real. let's come up with something

like the seeded program that is going to keep these factories and businesses in our neighborhood. if the auto industry came up, then give these other companies a chance to come up and the small businesses are going down. that's what kept our communities going and we need to go back to those days that we can bring back our neighborhoods. host: kevin hall. guest: two point ts that caught me ear with what that caller said. one, being the urban unemployment place. if you look at the northeast, or newark, it's 1-5. there's no easy answer to this. one of the answer is support program, the safety net. all that is under threat with the -- from these steep cuts people are talking about for discretionary spending. there are no easy answers and on top of that, you have a situation where lamar yankees situation where lamar yankees was talking about the boeing

situation. when they start doing away with tax expenditures which are basically tax writeoffs, well, a bunch of american manufacturers get a lot of tax benefits for producing here in the country. what are you going to do about that if you're going to close these tax loopholes? >> the president in toledo, ohio, yesterday talking mainly about the auto industry but made reference to current economy situations. here's what he had to say. >> even though the economy's growing, even though it's created more than two million jobs over the past 15 months, we still face some tough times. we still face some challenges. this economy took a big hit. it's just like if you had a bad illness. illness. if you got hit by a truck, you know, it's going to take a while for you to mend. and that's what's happened to our economy. it's taking a while to mend. and, you know, there's still some headwinds that are coming

at us. lately, it's been high gas prices that's caused a lot of hardship for a lot of working families and then you have the economic disruptions falling the tragedy in japan. you've got the instability in the middle east which makes folks uncertain. there are always going to be bumps on the road to recover. >> and all of that, kevin hall, never mentioning the numbers at all. guest: no. he touched on the number, 2.1 million jobs in the last 15 months. that's a pretty remarkable number and it gets to attention because we lost 8 million jobs. he's got a tough road to haul. you achieve and you're still to an expectation that you know, it's beyond what you can achieve and people need to be realistic about what this president or the next president can do. host: atlanta, georgia, good morning. jim, republican line. caller: yes.

good morning. i'm concerned that so much of the focus is on tactical policies. we voted in politicians that allow these policies to happen where unemployment rate is high and not getting any better. but where is the focus on long-term or strategic initiatives? i have an 18-month-old son and no one is talking about this next generation and what is the unemployment rate going to be like when he's -- when he graduates from school? is he going to be able to find a good job? where's the focus on that? everything is focused on how to get the unemployment better next month and the month after. what about the future? guest: and let me add to this. -- host: jim heinz saying what happened to the president's green job agenda? what's the amendment on that putting fast forward? guest: it's been moving forward at a fairly decent clip. it's what you're going to do that has an effect.

there has to be a market. you can't build something out. it's not like if you build it, they will come. you've seen a lot of good things happening. electric batteries for electric cars. we got next generation batteries. a lot of money has been leveraged for battery research. not so much in the ethanol. there was a lot of talk about alternative fuels. that doesn't seem to have gone anywhere. for your twitter comment, there are some areas that's worked are some areas that's worked well and other areas that's not so well. host: houston, texas, good morning. patty, democrats line. caller: yes. yes, sir. please let me finish, please, because i always get cut off. you know, the reason why i'm calling right now, it seems to me that everything is going on all of this disaster and everything's going on. everything getting blown away like everything.

the only company thing has been blown away and everything else there's a lot of job. and you still is saying but they still put all of the blame on the president right now. well, he's not doing enough. he's not doing this. this is not right at all here. because we did have that war. we had a good, good company when clinton came in. and everything's been happening all disaster right after another. and it seems to me that everybody is just like, well, blame it on -- getting it right away like -- he's 18. how is he going to do when gets a job if we need to start right now. there's people been working all their lives and serving their country and everything else. country and everything else. then they always want to cut the poor, poor, poor peoples off their money. but -- host: valid points. if you're the president, you're going to take the heat. you're going to take the glory

and the good times and the glory and the bad times. do i think obama has made his own situation worse by coming in with an unrealistic projection. he projected an unemployment rate of 8%. i don't think they realized how bad things were. guest: and that's going to be something that will haunt him next year on the campaign trail. i agree with the caller. the gist of what she's saying is people are playing politics when poor people are struggling to get by and are getting hurt. anybody sees this game being played all the time and it does, i feel what she's saying. you do get the sense that people forget the real working people. host: is there any forecast as far as how long we might see the current unemployment number we have? guest: well the federal reserve doesn't see it going below 8% until i think 2015 or 2016. that's five years from now. so that gives you a sense of how unusual a predicament we're in and there are others who see it in 2020. i've got a 9-year-old.

by the time my kid gets in trouble, you're still having an 8% unemployment rate. that's a very dismal short-term future. the future is a long-term horizon but we need to do a few things. a lot of things have to happen at the right time and the right way for us to get back to what used to be, what we consider normal. host: do they have any tools in the tool backs since to apply it at this point for the president and the congress? guest: that's an interesting question pause the stimulus, depending on how you measure it did or didn't help. i don't think there's much appetite and the debt is a real problem. i think we have one of the problems is this is all hitting us a. a time where boomers are going into retirement. 75 million people born in 1946 and 1964 all are about to go into retirement. a lot of them are retiring later. so we're going into it with a structural problem with the medicare crunch but we also did things and people need to remember that we did things that made this worse.

we lowered taxes. we have less revenue coming in and we did the part d medicare where we gave seniors care virtually no pay-in for. those are the things that outsized our budget deficit, not lending to foreign governments or even the wars. host: another response to yesterday's news came from republicans yesterday. a press conference. one of the responsibilities was jeff. >> if you look at the history of recessions in the post-war era, now, you have never seen a longer recession attached to a more tepid recovery. the net which is recurring under president barack obama. by any historic standard, this nation ought to be back to work. there ought to be more money in the pockets of american families to send their kids to college, to start a small business. but there isn't. again, it is another day to

point on their failure. host: the response to the history of that. guest: yeah. again, you can look at it two ways. you can say this is the longest recession attached to a recovery or you can look at it and say this recession and several wall street analysts have note there's been more hiring in a shorter period of time in this recession than any other time. the problem is we have not had an economic impact this great since the great depression and there's a growing body of research that suggests had the fed not moved this aggressively under the bush administration, we would be very close to teetering on recession. people have to be realistic. this sort of talk is the demagoguing that doesn't help in terms of our understanding to this kind of situation we're in. host: independent like, david. caller: good morning. my question is how we're going to recover from the -- from this recession when nobody is addressing the energy situation.

right now, the whole economy is based on the consumption to oil and because we've had so much oil here for so many years, everybody's so spread out in the country and the oil supply is not growing any and now we've got three wars going on over in the part of the world where we get most of our oil from and i think all it's going to take is one catalyst, you know, to drop drive the gas up, 10 bucks a gallon we might see. i'm wrong when this happens, how we're ever going to get out of this recession. host: very good question. guest: the u.s. automakers are doing -- all the automakers are all moving to hybrid cars and hybrid electrics. if we get to one of those crunches where you got a $7 or $10 barrel of gasoline, then the

car makers have already put in place building their platforms to manufacture and where they're going to get these out the doors quickly. that's not going to help people get a new car. but i do think the car makers are thinking about this and i've done a couple of stories on this in the last year of how ford, for instance, is building on a platform for its ford focus that they can do outen a conventional gasoline hybrid or straight electric battery. so they're preparing for any eventual tism that tells you they think the end of cheap oil is coming to an end. host: treasure secretary, you're talking to fram republicans about the situation. whereas far as the arguments from republicans and raising the debts, wouldn't cause any harm to the white house saying it wouldn't, other people in between. where do you see it taking place and what's the harm if we don't? >> guest: if we don't raise the debt ceiling, then the question debt ceiling, then the question is how long has this drag on?

it doesn't mean we stop paying the bond holders. but i don't think the bond market is going to sit tight and do nothing and see what happens. if we get to mid july, the consensus view is if we get to mid july and nothing is still happening, you're going to have the credit agencies give us another one last warning that if you don't get this done, we're going to downgrade your credit. the u.s. credit rating how our bonds are rating in terms of our ability to repay, if that falls, that cascades through the economy. consumer borrowing, business borrowing, everything goes up and once their downgraded, they're not going to upgrade the minute after the congress gets its act together. so i do think they're playing with fire here. again, there's nothing magical about the debt ceiling. it's simply you've done it 10 times in the last decade. i understand the desire for spending cuts and i think what you'll see, you have one or two options. go to the wire and then it's going to -- they'll come up with a deal with steep spending cuts

that extend past the 2012 election, i think that's what the administration would like of the the republicans would like to agree to a six-month election and fight again and then you get political hay out of it. that's the game that's being played but i do think that, you know, it has consequences. host: what's the current credit rating for the u.s.? guest: a.a.a. host: what could it be downgraded to? guest: a.a. it's not like they are going to put us to junk bond status. the united states has always had ale a rating. we quoted the former vice president of the fed. he said once you go down this path, then you've set in motion any time an opposition party wants to really get the president's attention, this is the vehicle to do it. and it's a dangerous road to go down when you're playing with a full face of credit. host: kevin hall joins. he's the national economics

reporter. correspondent west palm beach, florida. waldo, you are on the republican line. go ahead. caller: yes. i'm here. well, i hear your debate and i believe the nice thing in all this matter is it's time for america to -- [inaudible] the president has responsibility of most of the responsibility in all this -- not -- [inaudible] this is coming from their congress. the congress never been actively responsible in any of the issue we got into the economy. it is predictable of what's happening in america because there was plenty of recession when -- honestly, we are in depression. with the public opinion needs to understand is that america will become poor and poor and poor because we facing a big issue that they only want to talk

about us the cost of life nowadays increase in progression nowadays increase in progression [inaudible] they are going to grow in medical. guest: i think the last point, wage votes has been very flat. for a number of years now. and we've got also the income of quality that's widing dramatically and these are things that have transcended either democrats or republicans. as a society, people are beginning to take note of that in terms of being in a depression, it's defined 10% decline in economic growth or more. i don't think in technical terms we're in a depression but i do think the middle class is strained like never before. a whole other question for a whole other day, commodity prices and whether these markets are doing what they're supposed to do, which is determined a

price b.g. versus casino. you look at the volumes that are being traded versus the physical products, whether it's grain or oil. host: maryland, independent line. jake, go ahead. caller: hi. i only have about 30 seconds. so i got speak in generation. so -- generalization. so please take my overall question and not try to pick out one thing. i voted for ross perot twice and i think he was very richingte today it's ron paul who's telling the truth. this ongoing crisis was caused by investment which is caused by loose monetary policy. that economics says that bad debt must be liquidated. you're going to experience pain of this debt liquidation either now or later. the medicine that you have to take just depends on when you're going to take it. so we've had tight stimulus act qe-1 and qe-2 and now we're

talking about qe-3 last night on television. you say the fed sees unemployment high through 2016. if we had taken our medicine in between 2009, we would already be rebuilding. when are you going to start thinking about these type of things? god bless you. host: good question. when you think back to how when you think back to how latin-american crises were solved, it was through what the caller is advocating. guest: raised taxes, have a terrible tough period of one or two years of adjustment and then start growing. there are some evidence that worked in some cases. some cases, it didn't the -- and the political costs are always high. i've spent a lot of my life working in latin america and chili is always the example. chili didn't take that i. i.m.s. advice. they had a rainy day fund and when things got bad, they had an aggressive stimulus program but

it was a program created that -- one of the fair stimulus of our program, a lot of the funds were distributed as they were highway distributed as they were highway funds. when you get that, it's money to use on whatever. it's not directed towards boosting productivity which has an economic belt. it's similar to what the japanese did in their debt crisis. they built bridges that didn't go to anywhere and didn't add a lot to the output of the country. and i think that's a fair criticism of our stimulus as well and you look at what the chileans have done during their down turns and built ports and highways that have opened up new areas. it's a lesson to learn for us. it's a lesson to learn for us. host: boulder, crofrl. kathleen, democrats line. caller: hi, kevin. thank you for c-span. you guys are the best. you tell us whether the banking institutions that bored billons of taxpayers dollars, via the

fed, have they paid those loans back and can you explain, i mean, other than cats having control of some of our congress folks is why there was little to no interest? can you explain that on those loans and whether they paid them back? and i wanted to ask "washington journal" if you folks could have some more programs where you help the american public get some real facts on the israeli plan yin conflicts that keep impeding any kind of real impeding any kind of real negotiate. guest: most of the big banks have repaid all of that. if people want to get out just a quick history, the way it

happened was paulson, the then treasury secretary went to the largest banks, 13 or sa of them and basically got them in a room and said i'm going to give you this money. and wells fargo one that comes to mind says we don't need this money. the government insisted on everybody taking so that markets wouldn't be picking out the next week's -- weak fish because bear stearns went down and lehman brothers was under pressure and people were looking at merrill lynch and everybody ended up marrying up. a big psychologist in the industry and oddly enough created berg sbinities and not a smaller one. but these banks did pay all the big banks except citibank is big banks except citibank is still the last one. if you're suggesting there's a flop the banks, the flop that the fed fund rates has been zero

since late 2008, that amounts to almost free money to the banking system and they're not lending it. they're investing it. they're investing it. i saw something in the "wall street journal" that commod distrading was up 55%. distrading was up 55%. host: one more call. scottsdale, arizona, republican line, steve. caller: i was going to say that maybe we're just looking at this pessimistically. doesn't 9% unemployment mean 90% employment and maybe, you know, because we're in an automation age with, you know, the computers and robots, i mean, isn't it likely we're going to start having more employment just for that reason because of robots doing that now? guest: good question. services, is why you've seen a drop in manufacturing in construction and why the services sector is now the

leading employer and health care in particular. so that is happening. i don't think we're going have structurally 9% with the world's largest economy and most competitive. so i think the expectation is you are in that 5-6% range and that's why 9% is such a painful experience and an anomaly. this is not a normal rate for this economy. host: the next thing you look at as far as the telltale as far as the state of the economy. guest: energy prices. i don't think people appreciate fully how that feeds into the food prices. the federal reserve is worried about inflations but they look at core inflation, they don't measure food and energy but average americans, you know, food and energy is what it's about for most americans and there's a big disconnect there. going forward, what happens there? i mean, we have weak demand. we have -- there's no reason energy prices should be where they are and yet, you know, wall street firms are talking about $ 130 oil in the third quarter of

130 oil in the third quarter of the year. that doesn't match up what demand is for that product. host: kevin hall is the national correspondent for the mcclatchy newspaper. thanks for your time. guest: thank you. host: we are going to have an expert talk about the prospector applying for student loans and answer questions about student loans process that you may have. that will start at 9:15. our next segment deals with the auto industry. justin hyde joins us. he was kind enough to tweet his experience on "washington journal" he said about the chat with all things automotive. that's not a fake backdrop of the capitol. he's right about that. he will join us after we take a look at the week's news through political cartoon. ♪

>> jim abramson is the first executive editor of the "new york times." watch her almost 40 appearances from 1988 as editor of the legal times through managing editor of the "new york times" online at the espn video library. just one of the more 100,000 people you can search and watch for free any time. it's washington your way. now available, c-span's congressional directory. inside, new and returning house and senate members, with contact information including twitter addresses, district maps and committee assignments and information on the white house, supreme court justices and governors. order online at c-span.org/shop.

>> "washington journal" continues. host: barack obama traveled to toledo yesterday. what was the message he was sending as far as the automotive industry was concerned? guest: it was advantageous for him. the government and chrysler happened to arrange the final sale of the treasury stake and chrysler on the slice that the company owned back to fiat. company owned back to fiat. giving fiat the majority of control. ending the bailout. so the president going to toledo, ohio, where chrysler has been building cars for about 100 years. it was sort of the contradict lap for the administration, a chance to try to start the highlighting process of, you know, showing these tough decisions that they made and how it's benefiting chrysler, the community that the auto industry is in and trying to see something larger about the economy as a whole and trying to attempt to rebut some of the criticisms that the president

hasn't done enough. host: as far as the president's appearance, he did spend some of the time talking about the automotive industries. here's what he had to say. >> today, all three automakers are turning a profit. that hasn't happened since 2004. that hasn't happened since 2004. today, all three american automakers are gaining market share. that hasn't happened since 1995. and today, i'm proud to announce the government has been completely repaid for the investments we made under my watch by chrysler. because of the outstanding work that you guys did. [applause] because of you. host: so working backwards, was chrysler able to repay it because they seen a surge in profit, profitability so they had the resources to do that if guest: in part. part of the reason is fiat. fiat came in as a partner in the bailout and the bankruptcy.

sergio allowed chrysler to draw on fiat's technology to build new models. chrysler is making a net budget. for a long time, it was bumping around. it was keeping out of profit. but between the bankruptcy slashing its cost and the slew of new models that have been fairly well received and bring in more cash to the company, it's clear that they are making some profits. that said, the main reason they're able to pay off the loans is we refans financed. they were able to go ack to wall street and they we're stable now. we've got fought as a fa partner. can -- fiat as partner and you lend us again? fiat came in and paid about $500 million with a slice of chrysler's equity the treasury still owned. now, it's interesting what obama said there. he was in campaign mode with his coat off, shirt sleeves up.

he said something about they paid back all the money that we've put into them during my term. they didn't -- chrysler isn't paying back all the money. there's still about a billion and a third lost. the government is going to take on its investment. but chrysler did pay back everything that the obama administration put in that probably are never going to be paid back. host: was that part of the number as far as $14 billion? as far as that will lose that we've given so the auto industry? >> right, right. working backwards a little bit. the total rescue of the auto industry cost roughly $86 billion. the biggest of that was general motors. chrysler was about $12 million. the rest was ally financial and other entities like that. you know, the original cost estimates were that the government might lose up to half of that. the number was probably closer do $12 billion.

this week was $14 billion. the majority of that loss was g.m. g.m. took so much money to go through bankruptcy that it's going to be hard in its shares for treasure troy make all of is money back on general motors. there will be a loss on g.m. there's a smaller loss on chrysler. the investments will probably fairly well pay off in the end. host: our guest is with us until 9:15 and talk about the automotive industry. justin hyde. justin hyde. you can ask him questions at -- host: what is jelopny? guest: we have 4 million unique

readers per month. host: who funds it? how did jalopnik get itself start? guest: we were started five or six years ago. the name comes from jalopnik beatnik. we're a fairly small group. host: so michael motley has tweet this morning saying in response to what you were talking about chrysler. he said taxpayers are now subsidizing fiat for their purchase of chrysler guest: yes but it's not risk-free for fiat either. fiat was really the only alternative that the government had when chrysler went into bankruptcy in 2009. there was no other partner available who was really going to step in and take the risk of keeping chrysler afloat. so yes, they did give fiat some

sort of break but fiat has had to put its own money on the table. fiat owns a stake in chrysler but it has paid up the loans and whatever was owed by the new entity that came out of bankruptcy. host: as far as the big three automakers, where are have we seeing this change as far as how they do its business? guest: you've seen a massive shrinking of the big three. they have shed tense of thousands of jobs. they are much more efficient, you know, the new jobs at general motors and chrysler, if you go into a plant now, you're looking at paying $14 an hour rather than before bankruptcy we're looking at $20 something dollars with much more generous benefits. they are able to compete on price and a more even level with

the best of what's coming in in imports in japan, korea or in germany. they are profitable. they are growing market share right now in part because japan has been weakened by the tsunami and the effects of the quake there and there's a realization in detroit that's part of the reason for the growth they want chief c.e.o. saying we're not happy. we want our exetters to be healthy. we're not happy fighting against people who are damaged. we want to grow market share against tough competitors. and i think that's the goal of going forward. host: is there a difference about the cars that are produced? guest: yeah. guest: yeah. you're seeing more focus on fuel-efficiency. there's a downturn from 2008-2009. that was the period when they

had to pull back on spending to develop new models while they saved money. and all three automakers including ford. there will be a little bit of break in new models going forward. starting again in 2012, you will see that ramp back up again. host: you could take it where you want. you want. turns out americans still prefer s.u.v.'s over fiat. chrysler got lucky. guest: americans still do prefer s.u.v.'s but chrysler is doing very well. it is an pournt part of the it is an pournt part of the profit line -- the 500 is doing fairly well. there's plans to bring more fiat models to the united states. it's very much a work in progress but fiat has an opportunity to try to re-establish itself after decades of absence. host: with a was ford's secret to success? guest: ford got lucky in a

different way. before the downturn, ford mortgaged everything that it owned. it mortgaged the office building. it mortgaged the boardroom table in dearborne. for more than $20 billion, they got a giant loan. and that loan was able to carry it through the recession in a way that g.m. and chrysler simply couldn't. it was a very smart timing by the c.e.o.. and it gave ford the weather withtoll not have to go through bankruptcy and not have to rely on government intervention in order to survive. host: call number one is from michigan. dennis. democrats line. dennis, are you there? caller: yes, i am. host: go ahead. caller: yes. i have a question. how come our -- they haven't put in natural gas and electrical hookups at any of the gas stations yet? stations yet? how come they're not doing that? guest: there's two different issues there. first, let's start with natural gas.

there is some movements towards natural gas vehicles particularly on the commercial side. and i think because all three of these automakers are relying more on global assets and natural gases, a fuel that's used more overseas than the united states, you'll start to see a few more things trickle in. the issue is cost versus return. you're you get into a chicken and egg issue yes do you build and egg issue yes do you build the vehicles first or the stations first? as far as electrical vehicles go, you run into the same thing. there's not tremendous number of electrical vehicles on the road just yet. the charters are poultering. we tried to rent a chevy volt and it depart turn out too well. it's a very hard grind to try to get some of these new technologies out. the issue with electricity is it takes a lot of time to recharge even when using some of the rapid charging system available rapid charging system available today. there's some work in the labs to

try to come up with more rapid charging. there's a company that can switch out the battery packs like you swid switch the batteries on your kid's toys so people can park over a pit and get a new battery pack and drive on. but it's going to take years to develop that structure. host: angela on our republican line. go ahead. caller: yes. i just would like to say that i'm glad that the auto industry is doing well. i think maybe we should think about bringing some other jobs back that were sent across to other nations. but our system is set up to work, our government system, that taxes that are set is more than adequate that you got so many people that are trying to get out of paying a lot, the independent contractors to hire people from other prices for cheap kerr labor. why can't they put -- like if you work from another state and

you live in one state, you have to pay taxes for more than one state. why can't it be set up to one country to another? it's draining our country's jobs because they get the free benefits and everything, but they're not being dpt on what they're getting paid. and i think that's something that should be checked into. they were benefiting over here and they're till coming here. so i think that the tax issue for them to have to pay something because the conditions here are better. so that's why they come. host: thanks. guest: well, i think you have seen something of a downtrend immigration because of the economy in the united states. you have, you know, roughly 20 million people in the united states who want to work and can't. but people who have given up search for jobs. the supply of immigrant labor in the united states is steady and depends on the rest of the

economy growing. as far as jobs going overseas, that is an issue. a lot of parts makers, especially on smaller less technical pieces of equipment have shut down and move production to either mexico or china. there's still an issue with low cost productions fighting for jobs in the united states. that said, there had been a few moves of canadians that are coming back to the united states who have gone to china or foreign locals for the low costs and the cheap wages and found more problems than it was worth in terms of supplies and just getting the basic materials from china to the united states and back and forth. it's a very fluid situation. host: talk a little about cap a standard in the corporate average fuel chism according to the white house, some of the fans, they want to see is a 35.5 mile per gallon average per passenger vehicles, this would save about two billion barrels of oil over five years. guest: back in 2009, the auto

industry agreed with the white house and the state of california to set this target of 35 1/2 miles by 2016 and it will save oil. it was kind of a weird amal gum of interest. it was the first time the auto industry had agreed to a number like this rather than having to battle it through the agency . it is the first time california had been involved. there's some legal issues with california state law and the e.p.a. that allows california to set its own fuel city areas. that applied from about a dozen states but it covered about half the new cars in the united states. unless california is on board, they can set their own and start to have problems. the progress is made. when you go to buy a new car, if you to look for your spare tire, it won't be there. removing the spare tire saves to

100 pounds and you're going to find every last little bit of efficiency to make that car get better and better mileage, that's one of the ways they're going to do it. the next step is the big step that's under debate right now. environmentalists, some people in california want to see the standard upped to 62 miles per glan by 2025. that sounds like a lot and that sounds like a pretty steep increase croo is and it is. it is due to the math behind it. the feeling is with electrics, plug-ins, hybrid vehicles here that these groups argue is feasible for the industry to get there. so far, the industry has not come nearly as far to get back to 2016. it's been warning that 62 mile it's been warning that 62 mile per glan number is not feasible. host: how do you keep those numbers and keep car safety? guest: it's less of a concern simply because they have done a very good job of being able to lower the weight of vehicles

while keeping the rigidity and keeping the cell around the passengers, using new technology like stability control, advanced airbags, driver's warning, things of that nature that are keeping drivers safer. the real issue is cost. to get to 62 miles per gallon, you need a majority of vehicles sold to be hybrids. last month, less than 2% of the vehicles sold are hybrids. once that backs off, the cost benefit goes astray. and right now, there's a lot of new cars coming to the market that are not quite as efficient as hybrids but are close than they used to be. you can get 40 miles per gallon of a compact car on the highway. there's never really been a there's never really been a successful mass market hybrid in the united states outside of the toyota prius. it is the juggernaut of hybrids. once you get below the prius,

there's not a model that's done more than 25,000 units a year and that i think worries the auto industry. it's very concerned that it's going to have to build these hybrids. it's going to be expensive for them to do so and it's not going to be accepted by consumers who are going to look at the price and decide to go somewhere else. host: and there's no longer tax breaks for hybrid purchase, are there? guest: it's specific to company. toyota, honda, ford, they don't have them anymore. g.m. still has them. hon day will have some. kia will have some. but they run out after these companies sell after 2,000 units. host: oakridge, tennessee. he's their automotive experts rights about the automotive industry. richard. independent line. caller:. i was talking about paying back the -- the auto paying back the money they buy, general motors, i've been seeing stuff from them

where they had sold out the government -- to somebody else and they've lost $10 billion and was going to do some more and some other thing. the hybrids, your poor and middle class people cannot afford to buy those cars. they're out of work, and they're not going to stand their last dime on a hybrid car. guest: well, two things there. the situation in g.m. g.m. has paid back about $24 billion of the $50 billion that the government gave to pay for the bankruptcy. the treasury still has a 2 3% -- 33% in the equity. the stake is worth about $14.6 billion. g.m. shares have gone down about 12% since they started being sold in the market again last year and there's a real

complicated balance here for treasury and the obama administration. on the one hand, it wants to make back as much money as possible and then it would like to be free free from g.m. the latest word we've seen is that treasury may try to sell some shares. there's lots of effects on wall street because treasury is still there and still a possible seller. they lose some money on g.m. when they sell. that's pretty much inevitable. your point of a hybrid is very correct. and it goes to a larger point and it goes to a larger point about the industry. when president obama is out talking about the auto industry, he made mention of general motors and chrysler coming out of the industry. suns the took office in 2008, the industry has lost about 26% of its jobs. so even the a bright spot the u.s. economy is something that's struggling. it is something that's not come back to full health.

and automakers rely on the same thing that any other business do. customers who can buy and afford cars. if you have a middle class that's out of work work are not seeing their incomes grow, who have to spend their money on health care rather than cars, the industry is going to be sluggish. host: the "wall street journal" had a story this week taking a look at specific motor companies. they talked about chrysler and their strength. they talked about hon die as far as being a strong company. why is that? guest: hon die has been able to put all the building blocks together to be a successful automaker in the united states. they came in as a cheap value automaker. the car you would get if you didn't have much money and you needed a new vehicle. they were bland. they were boring. and slowly over time, they've addressed all of those issues to where their cars across the model line have decent to great quality. their style is very well. they're attractive to a lot of people.

they're attractive in terms of design and they're still affordable. it has a lot of strengths. it's in a position toyota and honda was in back in the noibts. host: is kia part of it? >> guest: yeah. it's strange in the united states because here, hon die and kia are treated by separate companies. they don't work together. they're supposed to be competitors. they're back further up in the management chain in south korea. they do become one company and use a lot of same engineering and technology. but here, they're considered the competitors. host: there's an e-mail saying what kind of cars are made in the u.s. so mr. hyde, what percentage of ford vs. chrysler autos are made in the u.s.a. guest: i believe that is correct. i would have to go back and look at the specific percentages of what's made where. ford has a large production center in mexico. chrysler builds a lot of engines

in mexico and both have a lot of plants in michigan. i would have to look at the numbers to be for certain but i do believe that chrysler does have a few more american built vehicles than ford. host: albany, new york, you're next. norman on our democrats line. caller: hello. was the president decide -- when the president decided to bail out g.m., they took an economic prognostication. had they not bailed them out, it would have cost the government over $80 billion, unemployed insurance and closing. and that was done by a young fellow from yale university. and really, only $14 billion to keep public jobs and psychologically keeping g.m. alive. it was the greatest move i think the government has made especially in those times. because g.m. who is 30 years

behind the times, -- 32 generations of people that never owns an american car and as these cars came here as -- [inaudible] the automobile company is still trying to catch up. up. host: caller, thank you. guest: e obama commission make a similar argument. even though it cost $14 billion to rescue the companies, the cost of not rescuing them would be greater. we're seeing the political sparring going on between obama and the presidential candidates. mitt romney they should be allowed to go under without a. it is an issue that republicans will have to confront and democrats will be making hay out of going forward.

the actual primaries are still a long time away. host: what are gas prices looking like for the summer? guest: they have come off of the highs a bit. there is concern about whether the economy will be growing as strong as it was. the markets are looking at the price of oil in demand for gas in the united states and wondering if the demand will be as great. they are still high, but they're not $4 a gallon nationally as they were a month ago. host: will they stay static at about $3.50 for a while? guest: it is hard to say. forecasting gas prices this impossible. i would rather forecast almost anything else. host: you have to look at it as a whole. guest: the auto industry has decided to have to have the option that gas prices will keep going up. they cannot just sit there and

hope they do not. they cannot just assume that oil prices will fall. gas prices have an effect on the economy. when the economy strengthens, gas prices rise and act as a brake on the economy. young people getting jobs and buy cars like you want. host: is there still strength in the suv and truck market? guest: there is, but the gas prices did get a hit at that. not doing as well. you do see strength in the crossover suv build off of the car frame. it is a lighter vehicle but still maintains some of the size

of a traditional suv. host: bo is on the independent line from georgetown, ky. caller: i work at toyota manufacturing here in georgetown. we have not had a layoff since 1945. people do not understand how many vehicles, toyotas are made in the united states. people do not understand. when we look at it in return, i think republicans are doing -- when they did not want to bail out the auto industries, i think they're looking more of the unions. if the united states and obama administration have not helped them, they do not understand how many small companies would have been affected. i think he should explain what people were talking about when obamas said it was better to

help them than not. the mom and pop shops and communities depend on the manufacturers to be there. i want to hear your take on that. guest: that is correct. obama mentioned this yesterday in toledo. there are 3000 workers employed in building the parts that go into a jeep wrangler. these parts factories are spread across the united states. each factor allies on suppliers spread across the united states as well. you do get these domino effect. you may not do have an auto plant in your part of the country, we may have a small factory making a component build into another part. that technology eventually ends up in a vehicle. that is part of the worry they had. if they have let these companies go, the fabric would have been torn at a time when the economy was weak. there was a very strong debate

at the time of the bailout about letting chrysler go, especially when the obama administration was not unanimous on that. it came down to a 5-4 decision on billion out. he was so far down, it would not come back. -- press the was so far down, it would not come back. -- chrysler was so far down, it would not come back. china is interesting. the chinese government put so many requirements on companies that do business there. it has been very strategic about forcing them to build in china, a partner with chinese companies, source components locally. most of what is going to be built in china -- sold in china will have to be built in china. gm is close to selling more vehicles in china than the

united states. most of them are built there. there are concerns about the role of the chinese government if there's any instability there, what may come down the pike. the chinese government has been very focused on building a home grown auto industry. there is some debate about whether there are helping themselves now to hurt themselves later. host: next call is on the republican line. caller: i have some comments regarding the auto industry control of the fuel consumption of automobiles. the first one i would like to deal with is the price of gas today. it would not be there had it not been for barack obamaa's

moratorium last year after the crisis in the gulf. the next item would be that there are means of improving the miles per gallon. it has been available for many years. i will mention a carburetors that got over 100 miles per gallon by extension of the fuel before ignition. guest: what we start with the last one first. that carburetor is one of the great white wheels of the auto industry. it is a great story that you hear. you hear that they had it on the shelf and squirreled away because they were in bed with the globe. outside of nascar, there is no car using the card reader. the injector technology get any

modern vehicle, you are looking at cars directly injecting fine mist of gasoline directly into the chamber. that is far more efficient than any carburetors ever built. a lot of technology being used now is fairly new. it is not one little thing anymore. the days when you could turn one switch in improve things really are pretty much gone. you have to add on with different technologies across the board on the engines, to the materials used to get the fuel economy. that will have to keep going for the foreseeable future. the fight will be over how fast that can come out. right now, you are talking about fuel economy improving about 4% per year. it is the steeper curve of increases that has autumn makers worried. as far as gas prices, about every six months to a year there

is a big to do about why gas prices are so high. they form committees and talk about it and talk about speculators. then nothing really happens. there is a decent amount of speculation in the market. it is fair to say that speculation in the markets is a larger factor now than any sort of a ban on domestic drilling. host: an email says that even when we switch to electric cars, we will still be power in the same way. guest: it depends on where you live on whether your power comes from coal, wind, or silver. in general, an electric car is more efficient use in the energy to move the vehicle. you have a lot of issues with electricity in terms of where it comes from, how you did to the vehicles, how long it takes to charge, and the extra cost. batteries are still very

expensive. they do not hold nearly as much energy per pound as a gallon of gasoline. electric cars tend to be fairly range-limited. maybe 100 miles or so. nil. -- maybe 100 miles or so right now. there have been owners caught off guard by how quickly the batteries have drained and left them stranded. coal is a particular one environmentalists look at. how start taxinghe or carbon, it is a complicated problem to get out of. host: augustine is on the democrats' line. go ahead. caller: i am trying to find out

how many jobs we will have lost without bailing out the industry and how many jobs were saved by bailing out the automotive industry. guest: there is just a tick under 700,000 people employed in automobiles. about one of you 10,000 jobs have been added back since the bailout. -- about 110,000 jobs have been added back since the bailout. if chrysler and gm have been allowed to fail, it could have set off a domino effect. it would have been ford. in the end, it could cost up to 1 million jobs. that is probably a bit severe. while chrysler might have gone away, parts of gm might have been able to survive. it is a tough calculation to make. i think is fair to say the

bailout save hundreds of thousands of jobs for cost of roughly $14 billion. host: green bay, wisconsin, paul is on the independents' line. caller: i am calling about your comments of going to natural gas. we have the park plans in place. what infrastructure are you talking about? -- we have the pipelines already in place. i would like to go into that in more detail. guest: the issue is not just the pipelines. it is about how to transport it to a place where vehicles can use it. with a very efficient system of hauling tanks around to our resource and gas stations. that works fairly well. automakers cannot rely on tanks that customers have a. they do not hold enough energy they do not hold enough energy to use in a car in most cases.

you need to have some sort of spigot or dispenser to make it work. there are one and 70,000 gasoline stations in the united states. -- 170,000 gasoline stations in the united states. you have to have a way of pumping it into the cars. you have to have a standardized system of refilling them. this takes money and coordination. there becomes the question of who makes the coronation and -- coordination and the choices. there was a lot of debate about who would pay to put ethanol pumps in two gas stations. moving ethanol in would be much easier than gasoline -- natural gas. ethanol has yet to make much of an impact outside of the midwest. host: the electric cars you can charge of that home with a sock it.

guest: you can, but it is not efficient and takes a lot of time. they usually require that you buy a charge of the costs several thousand dollars. it allows the vehicles to charge overnight. without that come in and take a to 24 hours to charge a vehicle from nothing to fall. they working on faster chargers, but those draw more current. you get more issues with the wiring in homes. host: what is the average length of a full charge? guest: it varies. each vehicle has its own battery set up. a tesla roadster in theory can go to hundred thousand miles. nissan advertises 100 miles. the chevy volt advertises 40

miles. it varies with the weather. it charges the battery in the car. even if the batter is low, you can usually travel extra miles. host: greg is on the republican line. caller: i was going to ask justin if he is a democrat or republican. people are trying to feed themselves before they're going to buy a car. we're trying to do that. you are talking about money people do not have. now the economy is going to turn worse. what do you have to say about that? you are pumping up all of this car stuff. it does not mean anything to people if they do not have the money to buy a car. guest: i agree completely. people have to have money to buy a car. before this got started, there's

no better idea about who would buy a car than looking at personal income. during the housing boom, unfortunately a lot of people egged on by companies used money in their houses to buy new cars. you are right. a new car is a pretty expensive purchase. the average price is $26,000. i am not suggesting it is available to everyday people. the issue is going to be with the industry is doing and whether it will survive or not . it has to have the same kind of economic growth and a strong middle class the rest of the economy reply's upon. -- relies upon. if the economy does not improve, people will not be able to buy a car. host: the next call is from san antonio. caller: franklin delano

roosevelt prevented the very wealthy from driving up oil barrel prices. now they are driven by unscrupulous speculators. i believe is a gas cap should be resurrected or inactive again -- inactive again -- enacted again so that the wealthy will keep their hands out of the oil futures market. guest: you get into a lot of issues regulating wall street when you try to put on a cat. back then, there was a lock 1 on the world that gave roosevelt the power to do that. -- there was a lot going on in the world that gives about the power to do that. if gas is cheaper, if you do not have the motivation to buy more fuel-efficient vehicles. if gas is expensive, is dragging down the economy and they do not have the money to buy fuel

efficient vehicles. it is a tough issue. i am not sure there are any answers. host: jalopnik.com is the website our guest writes for. how often do you write for the publication? guest: i write a couple of stories a day. the story you are showing now, i used to cover job of working in back in my early days -- jack kevorkian back in my early days of working for the associated press. host: next, we will look at student loans. our guest will be justin draeger from the association of financial aid administrators. we will talk about the federal loan process, what is available, and how to apply. we will have that conversation when we come back.

what he was known in the day as czar reid. >> republican thomas reed changed the power structure of the house. >> he was in hand as a tyrant because he overturned a longstanding custom in the house that the minority would be on equal parliamentary footing with the majority. >> james grant with his new book on "q&a." you can download this as the podcast online. this weekend, eileen shanahan talks about reporting in the 1960's and 1970's and her

discrimination lawsuit. the national park system house's national artifacts. a look back at the failed attempts to overthrow the castro regime with the bay of pigs. it the complete schedule online or have it emailed to you. jill abramson will be the first woman executive editor of the " new york times" in its history. watch her appearances on c-span over the years on the c-span video library. she is just one of the more than 100,000 people you can search and watch for free anytime. it is washington, your way. the c-span network to provide coverage of politics, public affairs, nonfiction books, and american history. it is all available to you on television, radio, online, and

social media networking sites. you can find our content any time through the c-span video library. we take c-span on the road with our mobile content vehicle, bringing our resources to your community. it is now available in more than 100 million homes. created by cable and provided as a public service. >> "washington journal" continues. host: this is justin draeger. if by an apparent sending a child to college, i assume i am too late in the student loan process. guest: not at all. they use prior year income information to gauge the amount you are qualified for. it is not too late to fill out a free application for student aid.

go online, fill it out. your financial aid office will work with you to get a package that will meet your needs. host: what information will i have to put down on the form? guest: it depends on a lot of different factors. if you are a traditional student under 24, not married, have not served in the military, do not have dependants, you are going to put down your own information, how much you earn, some asset information. he will also be putting down your parent's financial aid information. both you and your parents will have to electronically sign the application. that is the information the school uses to figure out which you qualify for in grant aid and self-help aid. that is student loans. host: how do the schools look at the forms?

how do they calculate if you will be eligible? guest: there is a federal methodology built into the application process. all federal financial aid is based on the methodology. they look at the number of people in your family, the number of students in college, income, and in some instances, your assets. if you have very low income, a lot of people get hung up on the complexity of the application. the lower your income and fewer assets, the more simple the process is. the large majority of financial aid applicant's file online. there is skip logic that makes this a very simple process. out of the formula that goes on, you come out with an expected family contribution. that tells the school held much you should be able to contribute

to your college education. the lower the number, the more likely you will qualify for federal grants like the pell grant program. grant program. host: if you are in the middle class family, you often hear the parents make too much money. guest: financial aid consists of federal financial aid, state aid, and institutional aid. that is far too broad an assumption for families to make. if you are in middle income family trying to get by and apply for financial aid, you may or may not qualify for a federal pell grant. that is the largest grant program for financial aid purposes. purposes. that does not mean you will not qualify for a grant or scholarship from the state. it does not disqualify you from the institution. the gateway to all of this is usually the financial aid form.

it is a consumer education p iece have to do to make students and parents understand that is not an assumption you have to make. 10 million students took federal student loans last year. that still requires an application. even if you do not qualify for grants and half to take on loans, you still have to fill up a -- fill out a fafsa. host: we are here taking questions. the numbers are on your screen. the numbers are on your screen. you can also send e-mail or twitter.through tortur--

guest: there are two categories. there are grants scholarships that do not have to be paid back. everything else are lumped into self-help. that could be federal work study. the campus will find work. you will be able to of earn money for living expenses or tuition, fees, and books. then there are loans that have to be paid back. when we talk about loans specifically, this is a growing share of how students and families pay for college. there are federal policy implications there. for consumers, i look at loan debt as an investment as long as you go in with your eyes open. you realize how much you plan on taking over the total program you are going to be in. federal loans are different from other forms of consumer credit. when you go for a mortgage, you are looking at a 30-year repayment plan. when you take out an auto loan,

you are looking at five to seven years. the difference with higher education is that financial aid is awarded on an annual basis. it can be difficult going in trying to figure out how much you are going to end up in debt at the end of the entire program. that is different afrom how we finance other things. there's an average of around $24,000 in loan debt. with a large majority, they're able to repay the loans. we are seeing that number increases year after year. that is problematic. the majority of the students who complete college are able to finish. the students who have the most difficulty repaying student loans are the ones who withdraw. they leave school. they do not have the skills they went to school for. they also have loan debt. student loan debt is not something that should be entered

into haphazardly. there are a lot of tools to help students and parents repay the loans. they're not this chargeable generally in bankruptcy. they will likely follow you for the rest of your live until you repay them or they are ultimately forgiven. host: james is on the democrat'' line. go ahead. caller: i was calling in reference to the fafsa application. i had higher income last year. this year, i am unemployed. how will that affect my fafsa application? guest: that is a good question. a lot of people are in that situation. one of the issues with the fafsa application is that they're looking at prior years of income. as we know, a lot can change from one year to the next. if your income has decreased and your current situation is not accurately reflected on the

fafsa family can go to the financial aid office and talk to them. you can ask for some sort of exception or special circumstance. financial aid administrators on college campuses have the authority by law to adjust your income so that it is accurately reflected. when you fill out the fafsa, you have to fill it out with the prior year information, the information and asks for. then you follow-up with your campus immediately and let them know that what you filled out on the fafsa form is not accurately depicting your current situation and see what they can do for you. host: brian from maryland is on the independents line. caller: i am a student. i wanted to make a comment. i find this whole process to be ridiculous.

it is ridiculously expensive to go to college in this country. i find it to be sad that our college system is like a business now. i may be mistaken about this, but in places like ireland, higher education is free. i think it is a bad thing that our youth are starting their lives in debt. they have to pay it off to banks and creditors. host: have you taken loans or received grants? caller: i have not received any grants at all. my mother is struggling to pay for college. i am going to have to take out loans for my final two years. host: what are you studying? caller: i am studying sociology. guest: you raised a couple of

good points. let me touch on two. college costs and to continue to increase just like anything else. this is a sector of the economy that is highly dependent on human resources. in manufacturing, you can get more efficiency of mechanization. this is learning. learning by nature can be expensive. the other thing i will say is that you point out is becoming more expensive specifically for students and parents. this demonstrates a trend in this country where we are seeing a disinvestment from the public side. state appropriations for propping up public schools. we are seeing a shift of that coming from the public sector. it is being borne more by students and families individually. this has been going on for more than a decade. it is reflected in the increased

amounts of loans students and parents are having to take. i agree with you. the national association of student aid administrators has a core principle that no one ought to be denied access to higher education because of lack of financial resources. some of that might be self-help. you bring out several good points. i think we have to look at the public sector to break -- debate. the maximum for po grant is $5,500 -- for the program is $5,500 per academic year. there is a debate going on about federal spending. federal student aid is no different. it is being looked at. the budget resolution just passed about a month ago. it funded us through september. the maximum pell grant was in

doubt. it was a program slated for a cut. we finally got that shored up into the 2013 academic year. this is something folks will have to reach out to the congressman about. those types of programs are being looked up. host: is there a maximum for loans? guest: there is an annual an aggregate maximum. each year, you can take on more annually. stafford loans are the most commonly used types of federal loans. as you progress, that goes up. a graduate students have more. host: what are perkins loans? guest: they are in need-based loan. they have a lower interest-rate than stafford. they have rates for teachers that are a little bit more rewarding.

that loan program has not received any new funding in several years, since 2007 -- 2005. even cancellation programs for forgiveness have not been funded 2007 cents. this is being looked at. the loan programs are growing among the stafford loans. 10 years ago, $40 billion in the programs. programs. last year, $95 billion in total loan indebtedness for one year. a-plus loan is for parents to take for undergraduate students. if my student takes out a stafford loan and still has needs, the parent can take out a plus loan. host: tom is on the republican line. caller: i have used the fafsa

program for my son for five years. it works out great. once you get set up and get your password, it is pretty simple. the only problem i have with the whole thing is the timing. you have to have your taxes done prior to doing that. a lot of loan applications and grants require fafsa by march to get to the august school year. could you think about changing fafsa is done? you have to have that done by march. you do not have your taxes done until june. guest: you bring out several good points. the first thing you said about it being a fairly simple process. i appreciate that. a lot of times, there is so much anxiety created about applying for financial aid that may deter

a lot of folks from applying. it is generally a simple process. it uses smart logic. the second point is the u.s. department of education has implemented in the last year of an irs data match. taxes, youlle your can import that directly into your financial aid application. that makes it even easier. timing is an issue. people are applying for early admissions in the fall. you do not file taxes until january, the board, or march. that starts running into financial aid deadlines, especially the state deadlines. there is some debate about how we can handle that. the issue is how accurate the date is that we use. date is that we use. if we back this up to win students and parents are applying for college, we would

have to go two years back. there are studies looking at how differential the day is from one year to the next -- the data is from one year to the next to see if we can align these better. the pell grant program is not privatized. the entire federal student aid program including the federal loans arnelle -- all now come out of the u.s. department of education. there are contractors that disburse the funds to schools and help them reconciled school records with federal records. that is an important component. there is no intermediary or privatization of pell grants for federal loans. host: how much time do i have to pay off loans? guest: a stafford loan is the most common.

any time you leave school or go below halftime, you have six months of grace before you have to start repaying the loan. when you start repaying, you go into standard repayment. that is 10 years. the federal loan programs are very friendly. i hope parents and students understand there is a difference between federal and private student loans. federal loans have an enormous amount of wiggle room on repayment. they allow you to extend your payments beyond 10 years. you can have graduated payments were they start smaller and then grow as you grow with your career. there is a new program called income based repayment. it insures the student loan repayments will never exceed a certain percentage of your income. the frustrating part about this is we still have students who default on federal loans. they go to hundred 70 days without making a payment. when you default on the federal loan, it will change your life.

you will change your life for the worse a lot of ways. this is the federal government. we're using taxpayer funds to lend the money. lend the money. you go out and go do not make any payments for 270 days. the federal government has an arsenal of tools they can use to intrude in your life. they can garnish wages. it will ruin your credit history and credit score. if you attempt to discharge in bankruptcy because of financial hardship, it is not very easy to discharge them. any type of wages or earned it, including social security, is open for garnishment. there are a lot of tools to ensure that students and parents do not default. the default rate is issued

annually. it covers two years' worth of repented. that will increase to three so we can get a bigger snapshot of how students are doing. about one in five are lawyers -- borrowers could be defaulting on -- on certains loans within the first two years. host: the next caller is on the independents line. caller: i have been retired for about a year. on morning television, there's been a lot of advertisements for university of phoenix, itt tech , and these types of schools. our students allowed to get federal financial aid for those types of schools?

i feel like a target a lot of poor people and the unemployed. they get into these schools and then have student loan debt that follows them for the rest of their lives. i think these for-profit schools are putting a drain on the federal budget. federal budget. the whole inten if a student hase the government, can the student become emancipated when they apply for college so they are on their own? guest: the first question was about 4-profit schools and whether you can use federal aid the for-profit schools can offer federal student aid if they meet all the requirements. there is a big debate going on about the quality of for-profit

education. there are questions about what is going on and how well they're serving students. there has been an explosion in the po grant program in general. a lot of the growth has been happening in that sector. the of the debate about those schools is that they are serving low-income students in ways that perhaps they're not being served at traditional schools. they're offering on-line programs, non-traditional programs, career training. perspective, i's would say it is important to do your homework. look at the institution you are attending. attending. when you fill out your fafsa , you can link to the college navigator website. he gives you information about the number of students to borrow at the school, the average indebtedness, and how many

default, how many complete. these types of information should help you make a decision about the school that is right for you. if you are going to take us to learn that, do it in the right way. secondly, she had asked about emancipation for dependent students. a lot of students are not depending on their parents. they move out and are financially independent. that is not enough under federal law for a school to consider them independently financially from their parents. part of the philosophy is that even if they're living on their own, families have some responsibility to help them pay for their education. unless they are 24 have dependent children, have served in the military, are married, or have been in foster care or homeless, it is going to require

parental information. in extreme cases where there has been abuse or estrangement, schools do have professional discretion to consider a student independently. that would have to be taken on a case by case basis at the school. school. caller: i would like information about these for- profit schools that go out of business and you are not able to get your records. by has been enrolled in one of these. the school closed down. we have never unable to get records to prove the school closed before he was able to complete the program. the federal government has been hounding us to pay this loan. it is my understanding there is supposed to be a keeper of the records. please give us guidance on

elkins institute in houston, texas. where can we find the records? people get involved with these schools need to keep immaculate records. the your transcripts. keep up with your grades. get your transcripts. keep up with your grades. guest: if the school was offering federal student aid and the school closed down and you were unable to complete your education at the school, your loans should be discharged by federal law. you do not have to pay the loans because to do not receive the education you paid for. the records of the school should be kept by that u.s. department of education. if a school is offering federal student aid, they have entered into a legal partnership with the united states government. if they close down or stop offering the eighth, the government should have clear records. i cannot speak to your specific situation. the u.s. department of

education would know the schools that have offered federal aid in the past and that have stopped or closed down. graduate students do not have as many grant options, a federal grant options as undergraduate students. they do have an expansion of loan option. that may not be what they want to hear. traditionally, graduate students will earn more. they will be able to shoulder more of the burden. they have expanded. a few years ago, they expanded its of a graduate -- so that graduate students who are creditworthy are able to borrow up to the cost of attendance at the program. host: claudette is on the republican line. caller: my daughter, my

granddaughter's fiance is a graduate student one semester away from finishing his degree in english. he just found out he has staged three melanoma. he is a poor student. he has quite a bit of student loan debt. is there anything he can do? guest: absolutely. i appreciate the phone call. my condolences as you work through this in your family. the good news is that for federal student loans, there is a disability discharge available. he should contact the holder of his federal student loans. he should let them know what is going on. if he is not able to because of his illness, if he is not able to work or receive income to pay back the loan, he can have the

loan payments deferred. it is a several-year process. he can stop making payments over the years. he can ultimately have the loans totally destroyed. there is relief at least on the federal student loan side. host: camden, new jersey, patricia. caller: i want to hear more about the fafsa. my daughter got into the university of southern california. she is going across the country from us. she has a balance of $10,000. we're both unemployed at age 55 plus. guest: if your daughter has maxed out the federal student loan she can take and they are offering you a plus loan, you do have to be credit worthy. it is not the same level of

credit worthiness for taking out a mortgage. you cannot have anything credit adverse. if you do not have anything scarring on your credit, you would qualify for a plus loan. it sounds like you are unemployed and do not have income, that could put you in a difficult situation. it is important to least apply for it even if you do not want to take it. if you are denied the parent plus loan because of credit, and your student has an increased borrowing capacity on their own. that is sort of the process. the package a student with federal loans. the next loans would go to the parents. if they are denied because of credit history, the student is able to take on more of the debt themselves. it is important to go through

the application process. the. house to decide how comfortable you are with your -- the parent has to decide how comfortable you are going into debt if you are approved. host: does somebody applying for a university or community college have a difference in how their days? guest: there is no difference. you can never take more financial aid than the total cost of the program. some community colleges might have a lower threshold as far as the amount of debt you can go into because you are attending a low-cost institution. the schools can decide which federal aid programs to participate in. you will see a community college that produce rates in the federal pell grant program but does not participate in the federal loan program. host: can loans be consolidated? guest: you can consolidate their

federal loans into one loan and one payment. that is for simplicity's sake that is for simplicity's sake going forward. in the last year, we have won federal loan program. consolidating your loans might be something you want to do. going forward, all of your loans should be with one servicer. it is the federal direct loan program. to complicate this even further, the federal stafford loan is divided into two types. one is subsidized. the government will pay the interest on the loan while you are in school. yet there is unsubsidized -- the other is unsubsidized. it has no interest subsidy. the interest will accumulate while you are in school. you can pay the interest while you are in school or allowed it to capitalize and pay it back with the loan amount. host: new jersey is next.

caller: i am calling about the parent plus loan. i think you answered my question. let me just make sure. i have to be credit worthy. we are unemployed and over 55. she could apply for the same one? guest: you apply for the plus loan and then decide if you are going to take it. if you are denied, your daughter would then be able to take on additional stafford loans. host: raleigh, n.c., and the is andy e independent -- i is on the independents' line.

caller: grants are a net loss because they are not repay. federal student loans are a loan. it is a revenue producer. is that actually true? what is the net effect on the federal budget? are we making interest or taking a loss? how does that compare with the private student loans? are they a better business model? do they make money and we lose money? what is the difference? guest: this is a big source of debate right now. congress is looking at how they can restrain federal spending. with grants, that as an outlay 100%. the federal pell grant has expanded exponentially in the last few years. that is an expansion in the

number of students going back to school and because of the recession the number of students and families qualifying. those costs have more than doubled in the last three or four years. four years. the program is now costing $34 billion. the latest projections for next year are higher. that is now way. on the student loan side, the government makes money repaid successfully. they are being repaid with interest. there is debate with anything when you are trying to come up with the cost of a federal program. it depends on the assumptions you are using. there is debate when you take into account market risk. these are the people who default or defer or ultimately get forgiveness. we did not talk about one of the more popular programs that people have questions about.

that is the public servant loan forgiveness. that was introduced in 2007. it allows someone who goes into the public sector to work for a nonprofit, government entity, in some cases private companies supporting local governments in fire or medical rescue, they can qualify after 10 years of payments for forgiveness of the rest of their loans. in the public sector, you may not make as much money in there is a disincentive to work in that sector. loan forgiveness would allow those students to earn a lower income, payback a lower amount on the loan, and ultimately have a portion of the loan forgiven. the same thing with military service. if you are active-duty military with student loans, you can qualify for deferment while you are active.

there are an enormous amount of military benefits that would allow you to go to school with the new gi benefits. that would pay for the majority of your education, certainly a public school and many private schools. you are also allowed to take federal student aid on top of military benefits. military personnel have a lot of benefits available to them for higher education. host: our guest is justin draeger. he is here to talk about applying for student loans. he is here about five more minutes. the next call is from oklahoma. caller: i think we have created a new class of debtors. stallone's is one of the few areas that does not allow bankruptcy reduced due loans is one of the few areas that does not allow bankruptcy --

stallone's is one of the few areas that does not allow bankruptcy -- student loans is one of the few areas that does not allow bankruptcy. times are changing. guest: i do not know if a lot of folks understand this. this goes for the private and federal student loans. the student loans are not generally does chargeable in bankruptcy. this is something of a lot of folks have debated. on the private student loan side, those loans are awarded based on stringent credit scores and history. they're not entitlement funds like federal dollars. to have some sort of bankruptcy relief so that folks do not hafind themselves saddled with

debt they cannot handle for the rest of their lives. host: the next call is on the democrats' line. go ahead. caller: i have been on the line for three hours or more trying to get through. to get through. host: nelly, go ahead. you are on. what is your question about student loans? caller: no question about student loans. student loans. this is nellie in raleigh, n.c. host: go ahead and ask your question, please. we're going to put you on hold. boston, mass., go ahead on the independents' line. caller: my question is about graduate student loans. i was wondering what happens if

someone takes out -- host: keep talking. you are hearing yourself on feedback. caller: i was wondering what happens if someone takes out a substantial amount of loans and something happens to them. they may become disabled in a way that they would never be able to make the income necessary to pay off the loan. if someone takes out light to under $50,000 -- like $250,000 and will never be able to make the income to pay it off. guest: on federal loans, you do have a couple of options. people think if anybody should be able to repay their loans, is doctors. family practitioners and pediatricians may not make the income pe