, president and ceo of american crossroads. at 8:30 a.m. eastern, more about food safety from caroline dewall, and you can call in with your questions about the economy for diane swonk. "washington journal" is next. ♪ host: good morning. the senate judiciary committee meets in three hours to hear from robert mahler. after holding a job for the past 10 years, the senate will extend his tenure for two years. the president will be meeting with the president of nigeria. with the president of nigeria. the federal court of appeals in

atlanta. the senate takes up a bill that could change how much banks charge retailers every time you swipe that debit card for a purchase. the debate will get under way with a scheduled vote around 2:00 p.m. eastern time. that is our question this morning. as the senate take this up, we would get background from steven dennis who is writing about it for "roll call." we want to get your thoughts about the slight fee issue. but iws -- swipe fee issue. the phone numbers are on the screen. but look at some of the headlines from outside of washington and some of the daytime bombing going on throughout tripoli by nato forces. this is a photograph from the "l.a. times." also from the "star tribune," from tim pawlenty's speech --

cut government to say that. he was delivering a speech in chicago outlining his vision of cutting overall taxes three this morning from the denver post, the city of denver has a new mayor. michael hancock, the winner with 58% over chris romer, the son of the former governor of colorado. the headline in the photograph, the front page of the "denver post." and from the "detroit free press," more from the aftermath of andrew -- anthony wiener. we want to begin this morning but the story that is the front page of "roll call." of light which is splitting democrats. steven dennis joins us live on the fun. thank you for being with us. set up the debate that we will

hear later today. what are the issues and what is senator durbin specifically proposing? guest: we have a showdown between the banks and retailers. it is over a pot of money, about $1 billion a month up for grabs here. inside the beltway battle that's been raging for months. it hasn't really penetrated to the public, because they are not aware of the fees that are getting paid to the banks every time they use their debit card. it ends up being about 44 cents every time on average. the debate is whether that 44 cents is going to go down to 12 cents. that's what was voted for last year, but the banks have been on a full-court press to roll

that back. it's about the money. and so it's been very intense. and it's been an unusual battle in that it's not really breaking down along party lines as most things here do. you know, senate majority leader harry reid has come out against the banks, but hasn't really been lobbying people as intently as he normally does. and you have a number of democrats backing the banks on this. including john hester who is up for re-election next year. and his argument is if you take this 44 cents, and you sort of have a regulator setting a lower rate, that could hurt small banks, even though the legislation in the past

specifically excludes institutions that have $10 billion or -- or that are worth less than $10 billion. they argue that that is not workable and would ultimately hurt small banks. host: first of all, 60 is the key number the senate needs for passage. this came up before with senator durbin getting 64 votes. and surprising the banking industry, which is leading to today's vote on the senate floor. and there have been a number of ads back and forth on the floor about this. this from the electronic payments coalition and this associated with the bank association. >> one decision here can set off a chain reaction. that's what happened when washington gave giant retailers a $12 billion payday.

consumers may have to pay more for their debit cards. and who is left to pick up the pieces? you and me. read for yourself about how congress can protect consumers and fix a bad debit card rule. host: let's take first the argument from the bankers and credit unions. what are their points? caller: their main point is yes, you'll be taking $1 billion from the banks and credit unions, but you won't necessarily be giving it to consumers. you could be giving it to the profits of giant retailers like wal-mart. there's no that money is going to go to consumers. some of this money ends up getting rebated to consumers in other ways. some debit cards have reward points on them often in order encourage people to use these debit cards so they can get

these fees. you'll have free checking thangesd like that. so if the banks can't get their money this way, they are saying we're going to take the money from our customers one way or another, because we need their revenue. so their fees will go up. host: that was my question whether the retailers could return what could be 30 cents every time debit card is swiped by the consumer. it's the debit card not the credit card and retailers lobbying in a series of ads they have put together, and here is their argument. >> sorry. i have no cash on me. >> just take it. the bank will make more on it than i will. for years big banks and credit cards have been pushing people to use their cards and not cash but then they charge you and me these loan shark rates to the

tune of $48 billion a year. conscience finally did something about it last year when they cleaned up the wall street mess. they asked them to cap fees. they did. 12 cents instead of 44 cents per transaction. now big banks are trying to undo those laws and some in congress are helping them. if that bill gets delayed, it's like another bailout. but this time you and i pay every time we use their debit card to spend their money at the cash register. call congress and they will them to leave swipe fee reform alone. host: and of course that legislation part of the bill that passed in the last congress. we're talking to steven dennis from roll call. so today you have the durbin proposal and the court proposal. >> senator durbin wants to bring it down to 12 cents. what's the other proposal?

>> the corporate tester plan keeps getting revised. the latest revision. initially they wanted to delay the rules a couple of years and water it down significantly. that had a lot of initial opposition seen as a way to kill it altogether. this one they say is more of a compromise even though none of the retailers agree with that. if this one delays any implementation for about a implementation for about a year, and it also gives the banks a lot more flexibility when they go to the regulators and say, hey, we need to justify a higher charge, you know? something closer to the 44 cents instead of the 12 cents. if the tester amendment passes, they'll be able to include a lot more expenses to justify a higher rate.

and all kinds of overhead expenses that they can say, hey, well, we need to leverage this fee in order to pay all this overhead. and durbin -- his argument on that is that they can technically sneak all kinds of things into their justification for a higher rate including bonuses for executives. and so, it's gotten very political. very pretentious. very interesting splits where dick durbin, the number two democrat is calling john tester an endangered democrat. and campaign ads are being run by retailers in montana to the tune of $1 million. this is becoming potentially the kind of thing that could affect some of these senators' careers.

one thing that's interesting is the vote total -- it's not very often that something is coming to the senate floor of this consequence where it's really this uncertain going into the vote how it's going to turn out. i talked to a lot of senators yesterday who were clearly undecided and weren't really all that familiar with the details of the latest offer, but suddenly wanted to be. prepared to support something if there was a real compromise. it's not clear how it's going to turn out. you know, both sides have been saying it could be very, very close. and i think one of the things that you have to look at is a lot of times senators don't want to change their vote unless they are sure that this is going to pass, if it's going to clear the 60-vote hurdle. in order for this to pass, 16 senators have to change their vote from last year when they

voted for durbin. they would have is to suddenly flip and vote for tester. that's a lot of senators who have to flip. some of them have already. senators like hagen or mike crow ho saying it's a good compromise but you have to get a lot of senators to change their vote and go back home and explain that. so you could have a situation where this thing gets 44 votes. because they or 48 or 50, and it falls well short, or it could get something where it picks up momentum and you start seeing it shoot past 60 pretty easily. so it's really coming down to the wire. and it's sort of -- you know, almost every lobbyist in town, anybody connected to the financial services industry is lobbying this bill. so lots of phone calls tonight, this morning, and a lot of

senators are getting, you know, pounded on both sides, and it's going to be very, very close. even if it ends up. you've seen a weird vote where it's -- host: steven dennis from roll call. thank you very much for joining us here on c-span. guest: great to be here. host: and the senate set to vote on the swipe fee cap. and from "time" magazine it's money land blog. senator john tester writing the montana democrat who was kicked montana democrat who was kicked off the floor of lobbying presenting his own proposal. you can read more by logging on to time.com. want to hear from you as the senate takes i this up today.

live coverage on the debate. the vote at 2:00 p.m. eastern this afternoon. joe is joining us from huntsville, alabama. good morning. independent line. caller: i'm calling because i think the debit card swipe fees will change the way people do business in general. debit cards are so quickly becoming the new currency that the more fees there are, the more of problem it will cause for commerce. people who will take a 40-cent coupon will wait to use a debit card. host: when millions of americans are out of work, it is crazy for congress to pave the way for higher costs to consumers and retailers and cut off an avenue for job creation.

that is on the website. michael from dover, delaware, good morning. caller: yes, i have a comment about bank of america's a.t.m. dollar fees. i think they are way too high and the head of c-span should be howard stern and ba babuy. host: thank you. you're next. caller: i didn't even realize there was a swipe fee. these several banks that the federal reserve a whole bunch, they've been trying to change this. these senators must be bribed, black mailed or intimidated by the banksters they must have in their back pocket. and no telling how much money they are giving they will. this nation is about to

collapse anyway. and they are all run by the central banks, and that's what causes all these wars. it's all orchestrated. but the people are too stupid to believe this. thank you, very much. host: this from our twitter page. tasha saying there are small businesses now who charge extra if you use a credit card. again, the vote today is the debit card, the money that comes out of your bank or credit union. you can join this conversation you can join this conversation by sending us a twit at twitter.com/cspanwj or send us an email at journal@c-span.org. an email at journal@c-span.org. the swipe fee vote today, and go ahead. caller: good morning. i just wanted to find out, and, i mean, we covered all this in dodd frank and reforming the banks. why would our government step

in and try to limit the banks on what their fees are to recover their money? we have the choice not to use these things. why do we need the law on this? host: thank you for your perspective. welcome to the conversation, joe. caller: good morning. thank you for having this story. obviously they didn't prep us as to what's going on, the final vote. we had other things in the media. most importantly, the debit card is the actual point of sale where the funds get withdrawn from the bank immediately. and we should put a limit on fees. it's just as if it was cash. you wouldn't take cash to a retailer and then you pay the taxes on the item that you purchase and they say oh, well, there's a 44-cent fee for actually purchasing it here. that's the same as the debit.

cut the fees. testing the waters. roll with durbin on that. host: thank you. and we'll hear from senator durbin in a moment. the tweet says they must all be liquidated. next is annie from champaign, illinois. welcome to the conversation. caller: hello. it's mary. host: mary. caller: i believe the senators and basically congress have forgotten the common man. even the presidents who are running for president say i am going to come and i am going to reform this nation. i am going to break everything down, and i am going to make it so that the common man can live again. no one believes that. and i wish that they would realize just how hard it is for

the person who makes a living 24-7 to make a living. and i agree that credit is out of check. but when you're using your own money to go forward and pay for goods and items that you're buying, and to have this tax, i think that that's unconstitutional. and i agree that even if we have to go back to paying for things with money, i see this as just taxation without representation. it goes back to the very core of our fundamental belief. host: mary, thank you for the call. transfrom the denver news, colorado retailers. putting the pressure on retailers -- cracking down on debit card fees for her chants. a radioed a campaign against

senators michael bennett and another from colorado to pose a bill for the swipe fee reform. the u.s. senate is expected to consider the bill this week and the vote coming up this afternoon. that story from the denver "daily news." from our twitter page another follower saying let's not forget banks also raised the amount of money you have to give them to invest from $500 to $2,500 or you pay a monthly $10 fee. more from senator dick durbin who is the sponsor of the bill that would reduce the swipe fee from 44 cents to 12 cents. >> they were raising the amount they were taking each time the debit card was used to now the highest level debit card transactions fees in the world. now the federal reserve tells us they charge on average 44

cents every time they swipe a debit card. in other words, if you're running a little store in springfield, illinois. and a person walks in, and i've seen this happen. and say i want to buy a $1 spnt 29 -- $1.29 pack of gum. that merchant has to look at it and say i just lost money -- when they swipe their card. host: the key number for final passage in the senate is 60. good morning, what's your take on all this, anne? caller: good morning. really, what i believe is corporate america has gotten is to greedy that they are passing on basic costs of doing business on the american people, and it has to stop. i believe our congress and our senate has to start doing

something to help the american people. they forget who they are working for, and that's really all i wanted to say. hi host: thank you for the callo stories, "the washington post" with the u.s. involvement in affingaffling. the headline from karen de young. eight faulted. a new congressional report. pointing out the hugely expensive rebuilding attempt in afghanistan has had only limited success and may not survive.

host: there is a related editorial on all this we want to share with you from former secretary of state henry kissinger also in "the washington post." "how to exit afghanistan." he points out -- host: that's this morning from former secretary of state, henry kissinger, the headlines and study coming out later today. jen is joining us from los angeles on the debit card swipe fees vote. caller: privilege to speak with you. i feel this is just another pass through that's going to go to the consumer. and the number one industry

right now in america is consumer debt. if we're going to add to this debt even more with everything else including the internet taxation that they want to put on, too. and the cost of fuel, which is going up dramatically. i think we're loading more and more of the responsibility for financing this out-of-control government on the taxpayers, the people who can least afford it now. many of them are working two or three jobs. and steven, i wonder if you can explain a little more clearly exactly the amounts involved in this additional fee that they want to charge. host: well, in terms of the amounts, you're talking billions of dollars. but in terms of the original fee you're now charged. it's 44 cents every time you use your debit card whether it's for a cup of coffee or

something at best buy. and senator durbin wants to bring that down to a maximum of 12 cents per swipe. caller: would this amount be included in the cost of purchases to the consumers? host: it is. and what the retailers are saying is it will reduce the cost of 30 cents on the products, because they are not being forced to pay that to the banks. caller: i see. well, thank you, very much. and thank heavens for c-span. host: thank you. the story with an update from the "wall street journal" available at the "wall street journal" website as the senate is poised to vote for the swipe fee bill and the original was for a two-year delay then changed to a 15-month delay. today the vote will be for a 12-month delay. this comment.

the quote caption the card is locked behind the visa network and like the mark of the beast, you can neither buy nor sell without it. >> the lead pronets of the swipe fee rule, and here he is yesterday on the senate floor. >> i want the durbin amendment -- what it did was tell the federal reserve to set prices on debit cards based on implemental costs. let me say that one more time. based on implemental costs. in other words, when a business does business, there are fixed costs and there are enyes mental costs. it would be like saying to a pizzaa company that sells pizza as across the counterthat the only thing they could charge for was the dough. they couldn't charge for anything else that went into the cost of the product that was being sold. host: again, they will continue

today with the vote getting under way at 2:00 p.m. we're asking about the vote today on the debit card swipe fees. bill on twitter says i notice gasoline stations are popping up around the d.c. area a cash price which is lower than the debit or credit card payment. >> good morning to you. host: good morning? caller: i think that in order to address swipe fees, we have to look at the federal reserve and the way that they manage small interstate banks, you know, corporate and state banks. and the real idea is, you know, that instead of voting to, you know, try to minimize the effects. i believe -- by doing so have our senate and other elected officials have the ability to

actually make the law that sets the rates rather than going to a corporation and asking them for permission to change the rates on the bill. host: michael is next joining us from kyi. good morning. we'll go next to bunny from parsens kansas. good morning. caller: good morning. lovely to see you on this nice morning in kansas. i read -- i ran for the city commission and practically all the people that have spoken have stolen by -- stolen my stuff. but i wanted to say that cityvilleage banks pretty much do what they want to do after they get the money from federal government and state government help. what we have -- ugh -- ugh --

people who are still loaning out -- selling out the loans that they make. we only have one bank in our parsens, kansas, and that is the parsens bank that are not selling off loans. and i campaigned on getting back to federal -- less federal control, and our more traditional, local control. the local control is going to have to happen even in our larger cities like washington and new york city. people are going to have to just take control of their own money, because otherwise, these banks are loaning only to their friends and only to people that they feel can help them in some way. host: mm-hmm. caller: this is not the american way. thanks so much. host: thank you. from jim on our twitter page.

this comment. there shouldn't be a fee at all. the card is a benefit to the merchant and bank. most banks have self-service as a result. and michael joining us from newport beach, california. good morning. caller: good morning. i am definitely in favor of this exchange fee of the 44 cents. the delta of the 32 cents does no guarantee whatsoever, steve, that it's going to be passed on from the merchants to the consumers. i believe the $23 billion, that's the magnitude we're talking about. are going to be pocketted by the merchants. and what's really going to be detrimental is the small banks and credit unions across the country and small depositters like teachers and unions are going to be impacted by the fact that it is not pass do so or at least bernanke commented

let's spend this further -- extend this for another two years. that's what i would like to see have happen. so we can study it. not to have it like last year. so again, i want to express to your listeners. if $23 billion, that's the magnitude of small banks, credit unions. will be exacted in one year. so if we can just study it for another year, that's what i would prefer and maintain the 44 cents interchange fee. host: one of our viewers saying i guess this is a new feat. think every time you're using your card, you're charged 40 cents, and the business owner as well. host: if the fed determines there would be a negative impact, it would get another six months to rewrite the rule.

but many are adamant, they are opposed to any delay. banks say, they believe, a new study would prove their point that these fees would have an undue impact on small banks and credit unions. cody is joining us from silver spring, maryland. caller: thank you for taking my call. so the credit card companies, visa, mastercard, american express, when they issue the cards to the banks, they get a certain percentage as well as the banks. so my question is what is the percentage those countries get for issuing the card for convenience to the bank and what is the bank's percentage. that 40 cents is that based on a percentage or is it a flat fee? i thought it was all based on a percentage of what you use. so the average number they are

throwing out there is the average number based on all transactions. host: well, as i understand it, it's 44 cents every time you swipe the debit card whether it's for a star bucks coffee or a major purchase. caller: for that percentage, what does the bank get and -- host: keep in mind we're only talking about the debit card. not the credit card. caller: well, like, my debit card, it's issued through visa. it's a debit card but has the visa logo on it. host: thank you. from 40 years ago, the supreme court in a 6-3 ruling, the newspapers publication of the so-called pentagon fainsd "new york times" conded the study. it's pointed out it may be the

first in the annals of government secrecy, releasing the document. that's what will happen next monday when the government plans to release the pentagon papers 40 years after it was first published in the new york city. this is also available on the "new york times" website. the question we're asking today, the vote on the debit card swipe fee. >> how are you doing this morning? >> good. thank you. >> i receive mail all the time through the -- with my check, telling me that the u.s. telling me that the u.s. treasury department is going to faze out that. the government's excuse is that it costs them too much money to print checks, and it would save a lot by doing this.

but i don't think it's fair to force everyone into a system where you have to use some type of card. which is my family. we use cards. but at a charge. it's not where you are forced into a system. and i think that by staying here with this little paper that i have, my year 2013, if i have not switched, they are going to automatically send me to a direct express or debit mastercard. and it's not fair. but i can't do anything about it. i don't have a choice. thank you. appreciate it. host: from dann, he says, we are once again left powerless set by the banks. the people are always the ones who pay at the end. again, if you missed this at the top of the hour. two ads now on the air one by

the banking association and one by the retailers and merchants. this is how the debate is playing out over the airwaves. >> one decision here can set off a chain reaction. that's what happened when washington gave giant retailers a giant $12 billion payday. if congress doesn't act now, consumers may have to pay for for their debit cards. and who's left to pick up the pieces? you and me. read for yourself about how congress can protect consumers and fix a bad debit card rule. >> i got no cash on me. >> you know what? just go ahead and take it. the banks are going to make more on this than i will. for years banks have been pushing people to use their cards but then use their market power to charge you and me loan shark rates to the tune of $48 billion a year.

congress finally did 134g about it lastier when they cleaned up that wall street mess and then asked for reasonable levels. the cents instead of 44 cents per transaction. now the big banks are trying to undo you do those big laws and some in congress are helping them. they are trying to delay the law. if that bill gets delayed, it's like another bailout. but this time you and i pay every time we use their debit card to to purchase. tell them to leave swipe fee reform alone. call congress. host: some of the ads. megan joining us from wyoming. megan joining us from wyoming. the issue, the senate voting today on the debit card swipe fees. caller: i understand it's not necessarily 44 cents per use of the debit. that's an average.

and i wanted to clarify if that was the case or not. secondly, i wonder if you could clarify or if you know, the charge, isn't the charge directly on the retailer and not the individual? host: right. but then the retailer passes it on to the consumer. caller: but if i use my credit card, and i'm buying a cap of gum, -- host: we lost you. are you still there? she hung up. again, we're talking about the debit card swipe fee. there is a separate charge banks apply anytime you use a mastercard or visa or american express or discover. welcome, florida. caller: good morning. thank you for taking my call. host: certainly. caller: in order to get this

bill passed, you're going to need partisanship. if i'm not mistaken, when reagan was president and tip o'neill was president of the -- was speakerer of the house. they got together to decide what was best for the country and not just for themselves, and i've said it on this program before, the biggest cause of all our problems are the lobbyists who are allowed to go to congress with billions of dollars to buy votes. now how many lobbyists were there when reagan was president, several hundred? now in the thousands. but if both parties showed bipartisanship, -- that would instantly solve most of our problems. but i don't believe any politician is going to cut his own throat.

host: thank you. and linda follows up saying bottom line is even if you're paying with cash, you're paying a higher price because of the markup for the debit card fees. you can leave a comment at journal@c-span.org. you can also look at libya. you can also look at libya. is that you came up yesterday with german chancellor andrea merkel. and the story from inside "usa today," gaddafi battles and vows to fight to the death as air raids intensify saying the libyan ruler vowed to intensify as they released a ferocious series of air strikes in tripoli and a phone call to state television he angrily denounced the rebels who rose up against him in mid february,

inspired by a wave of -- good morning. caller: good morning. i thank you for c-span. and i think this whole thing is a joke of -- it's all about the big money and the big banks. and they need be put in their place, and have these limits put down at 12 cents per purchase, and go with that. the truckture of everything is skewed so much towards the rich and the big corporations and everything like that. the american people need wake up and realize that we need to speak up and do what's right for the american people. the greater good. that is not what the republicans are for.

and these amendments to stop this is ridiculous. we need regular layings, because we cannot trust the big corporations. that's why they are there. and the american people need to understand that. host: roger, thanks for the call. one of our followers saying the "it" will just be passed along to the customer. defining allowible amounts that can be passed on. from politico. the son of the former senator will not seek re-election. the story points out not up for re-election in 2012 saying it was not an easy decision for him. here's more from his announcement yesterday in his home district. we'll go to rene in ford myers, florida. you're next. caller: good morning. i just want to say i am

definitely against debit card fees. because number one, the banks are getting away with so much against us little people, and we have no way to fight them, because they have money behind them. we have no chance of fighting them. not just debit card fees but all other kinds of things. and we pay a lot of fees to the banks anyway. how much money every month. so much for this. so much for that. they get us coming and going. host: bill is next from andover, minnesota. good morning. >> good morning. and thank you for the perfect job you guys do. it's really nice that you're getting it out there for people to debate, and that's terrific. >> the comment i have. a question and a comment. when the banks have so much power over our whole monetary system, i think it's very

difficult and too bad that our representatives haven't created more of a competitive spirit with the large banks, to acquire our, you know, our sales or our business. and they have empowered them -- we have empowered them so dramatically that it's really a debt ment as to how far we get ahead,, too, i think when they control so much money. think the whole idea originally was to get them the money so the leaders can utilize that to create business. now it's gone the opposite way where they end up representing the larger corporations and interest and business and it goofs up the growth process and everything. but back to the point at hand is when you talk about fees. i was a retired post master and i'm also a businessman. as a retired post master, i

think the whole thing was to find universal service throughout the united states. so congress can get alead. the whole idea was where you can take a widget object east coast and get to the west coast from any innovater who had something new and get it there as -- you know, nobody in the post office made a million dollars. and the congress could get going. when we get away from that and get to the private only for profit situation, it really goofs up the situation. host: thank you for the call. one more caller and comment. one twitter from this viewer saying this is why the consumer protection agency is so very important and why ms. warren should be running it. banksters have politicians in their pocket. >> the story from "the new york post," fall on your sword.

wiener is the tabloid story, why he must quit now and from the "new york daily news." the stripper and the coverup. and discussing democrats letting wiener shh rivel and what if he called him? he said his advice would be to call somebody else. congressman schumer saying he wishes the wiener should continue to serve and it should be up to the constituents to decide. few colleagues defend him and another column says constituents not ready to forgive. the issue taken up on the debit card swipe fee. good morning. caller: good morning. i wanted to clear a misconception i'm hearing on the air from various callers. the fact that we reform the

swipe fees, whether it becomes 44 cents on average or 12 cents on average. the bottom line is the banks are going to retool or make other tools to make up for swipe reform. so it's not like the consumer is going to save money. the banks are in the business of figuring out how the -- how to make money. and i think people have a misconception that if you remove swipe reform, the banks somehow will end up charging more money, so for crying out loud. they are banks. that's their job. host: thank you. "the washington post" every day after following a state dinner. sure signs of friendship as andrea merkel is greeted at the white house by the president

and first lady. they had 200 guests dining in the rose garden overlooking the oval office and last night, the president, after announcing last year that andrea merkel would receive the meddle of freedom, it was presented to the german chancellor. >> to dr. merkel. she became the first east german to serve as chancellor of the united republic of germany and made history when she became germany's first female champions legislator. a dedicated public serven't. she has promoted -- throughout europe and the world. >> you can all applause. [applause]

host: the state dinner, the fourth hosted by the president and first lady. for india and china. and if you want to check it out, it's all available on our website at c-span.org. coming up, we're going to have a conversation with the american crossroads and its role in the presidential races. also a look at food safety and the u.s. economy. could we be facing a double dip recession? still to come on "washington journal." it's wednesday, june 8. we're back in a moment. >> this weekend on book tv on c-span 2. reckless endangerment. talking about the role of

fannie mae and freddie mac in the 2008 financial collapse. afterwards, henry kissinger on whether or not it's possible to form a true partnership with china. look for the complete book tv schedule at book tv.org and get our schedule in your inbox. sign up for a book tv alert. >> nomination. the ayes are 72. anyways are 16, the bill is confirmed. >> donald to succeed another. thereon him argue from 2008 or discuss the renquist court. he's one you can search and hear from anytime on our c-span video library. it's washington your way. >> every weekend it's american history tv on c-span three.

starting saturday mornings, people telling the american story. watch personal interviews on events of history. it features some of the best-known history writers. revisit battles and events during the anniversary of the civil war. visit college classrooms around the country during lectures and go behind the scenes on american art facts. and the presidency looks at the policies and legacies of past american presidents. get our complete schedule at c-span.org/history and have it emailed to you by pressing the c-span alert button. >> "washington journal" continues. host: we want to welcome back to c-span steven law the president and c.e.o. of american crossroads. thank you for being with us. guest: thank you for having me on. host: for those not aware. your role in politics, what's

your mission? guest: we are aiming to elect as many republican candidates as we can. we'll focus on the top of the ticket and the senate majority, trying to take that back. the other very important responsibility we feel we have is to make sure we ensure a house majority above all else, we'll have that backstop to advance republican policies after the smoke clears in 2012. host: a snapshot 1 1/2 years before the election but shows the president hitting a new low on the economy, and showing on the economy, and showing this day a dead heat if mitt romney were the opposition. guest: i think the president has played all the cards he possibly can on economic policy, and they haven't worked very well. in fact, we view the policy the

administration's pursued as the reason we are in a stacked economy and headed toward a double dip recession. if you listened to whatt president said, he doesn't have answers. he just says don't worry about it. it will all work itself out. but i think it will be on people's minds between now and the election. as you point out, but this will be job one for anybody to deal with before next november 2012. host: the new democrat from a strong history that links between buffalo and rochester, new york, how much money did you spend on that race? and that race ended up costing about $10 million for one congressional seat? guest: well, you had two self-funded candidates. boat of them had substantial

resources to spend, and outside groups also got involved. i thought it was an unusual race, because the presence of the third party forced republicans to have to spend resources to go after that particular candidate, and the result was both the third-party candidate and republican saw their negativety climb significantly and in that time period, kathy was able to define herself positively and it became a race hard to overcome. host: what's the lesson of that race? guest: try to avoid running where there's a third-party candidate. i think the third-party candidate should have been taken more seriously. but i think it's a very unusual race. a lot of strange circumstances, again, the liberal democrat marketing himself as a teacher. i don't think you're -- marketing himself as a tea

partier. i don't think you're going to see that again. host: if the tea party people don't like him or her, that leads to a third-party contender in 2012. that could happen. guest: it could. i think it's less likely. the one thing that unites those the one thing that unites those tea partiers, it's the goal to make president obama a one-term president. and they are going to have to work hard to united the different elements of the republican party and those identifying as tea partiers, hopefully the overall mission of making president obama a one-termer will be the thing that unites us. host: tim paw plenty leaving the state with a deficit. talking about deficits in the economy yesterday. in a speech at the university of chicago, here's what he had

to say in 2008. >> we should cut the business tax rate by more than half. i propose reducing the current rate from 35% to 15%. but our policies can't simply be just about cutting rates. they must also be about promoting freedom and free markets. the tax code is littered with special interest handouts. carveouts, subsidies and loop holes. they should be eliminated. >> governor paw plenty yesterday and paw lenty cut government to save it. we've heard this before. cut government, and cut taxes for the economy. did they work for the bush administration guest: the one thing everybody agrees on is it's not working. big government.

we spent a lot of money to create jobs. it didn't work. we're facing a double dip recession. we need think of new ideas to get things back on track. i was in the bush administration when they decided to pursue a pro growth policy. it was ratified again at the end of last year when congress extended all those tax cuts. most feel those did work. they helped spur the recovery in a much faster fashion in terms of economic growth. i think it's important to have pro growth policies on the table. and governor paw lenty -- the one thing i think every one agrees on is these policies are not yielding -- host: let me share with you this. i'm going to focus on the major

election years, 2000, 2004 and 2008. we've gone from $3 billion to spend on all federal elections to more than $4 billion in 2004. $5.5 billion in 2008 and approaching $6 billion next year. >> well, we're glad to be happy you parted that little area of economic growth in the economy. but the truth of the matter is all those numbers reflect intensity and concern. that's true on both sides. in 2006 and 2008 democrats dominated political spending. the president, as you recall spent almost a billion on his campaign. the union spent half a trillion or half a billion on their -- according to their own estimates. that reflects intensity, concern about the country. this last time we spent a much smaller amount and that reflects that a lot of those who support us felt the need to

do something about the country. host: as you look at what it's like to run for congress or the senate or president, the amount of time they have to spend raising money, has it become unsustainable? guest: well, it's always been a challenge to raise money to run for office. that's part of the job. i don't think it overtakes everybody's time all the time, but these members of congress don't own their jobs, and they've got to get funding to do that, and it's part of the job of communicating. most expensive part of campaigning is broadcast time. you've got to raise money to do that. the only alternative i've heard is to force the taxpayer to pay for campaigns and as we've seen in the presidential system, taxpayers are refusing to check the box to pay, and it's slowly

dying away. that means it's up to the candidates to do it themselves. host: when it gets closer and closer to the election and you are bombarded with advertising at home, is there a point where it becomes the law of diminishing returns? duke voters tune it out? guest: in general, in advertising, you have to be careful to be very fact-based. i think republicans are becoming more sophisticated. people are getting a lot more information. people make value judgments on what they see. you cannot fool all of the people all the time. that is why we take great care and how we advertise and the craft what we say to make sure

it is credible. host: will american crossroads endorse and support a gop candidate in the primary? guest: we will not. there are some groups that will get involved in primaries. they try to elect somebody -- we will be active in the general, and we will be supporting the republican nominee for president whoever that might be. host: who is behind american crossroads? guest: it started with the former chairman of the rnc. karl rove was helpful in the founding it. they occasionally give us some good advice. there is a very small staff and a tiny little office, and then there are people from across the

country who give us amounts of money. both small and large amounts are valued by us. i signed every single thank you note because it matters to me that people care enough to try to help change the country. host: you can join the conversation with steven law from american crossroads. our numbers are -- send us a tweet or e-mail at -- we also have a line for independents. good morning. caller: good morning. i want to find out what american crossroads' position was on the debit card swipe fee being voted on today because it has such a

large impact. ,f you don't have a position why not? guest: i was listening to the debate in the previous segment. it was exciting. a lot of very strongly held views on each side. we like to specialize in things that we know about about. one thing we have not become specialists in is in the area of consumer finance. obviously, congress is going to work its will on that. we are focused on the larger picture of the direction of the country, its economy, jobs, in tons, reform, spending, things of that are going to be decided in the 2012 alexian. these are the things that we are concerned about. on that issue, i do not know enough about it to have an opinion on it. host: what do you consider a

small amount of money? guest: we get contributions as little as $5, $10. there is one particular woman who would send us a check every single month and did not have a lot, but she was very concerned about the future of the country. she would send us a little bit and we would spend their carefully. i do this for a living, but it is amazing to me that there are so many people across the country who really care about the country. they want to see the country governed well. sometimes we disagree on where that ought to be, but it is inspiring to see so many people willing to sacrifice their time, energy, and money. host: john is joining us. good morning caller: good morning. this guy represents everything that is wrong with the election system.

it has been paid to play for a long time. the door was opened by citizens united and karl rove. karl rove is in charge of american crossroads and gps. it is a plate to pay -- it is a pay to play system. he is getting money from overseas and major corporations with a couple of little old ladies who are sending $5 who do not know any better. it is the continuation of the worst thing that does happen to this country. whatever this guy says is just baloney. host: we will get a response, john. guest: there were a lot of things that were said inaccurately. the first thing i will start with is folks who write small checks -- they do know what is going on in this country. the second thing, obviously, we

do not accept contributions from foreign sources. that is against federal law. if he is interested in the solution i mentioned a moment ago, to force taxpayers to fund the costs of campaigns -- if you do not like the negative advertisements that you see, the little bit of solace that you could take is somebody else is paying for them but he would also know that you are paying for every single one of them. that is not the right way to go. and for the most part, one of the things that groups on the left do is typically focus in cases when you have an incumbent who has a lot of money because they have been able to shake down the money tree here in washington, and they do not have access to the pac money, and we

help even out those odds. it is an important addition to the democratic process. host: one of the criticisms is the republicans or running the campaign from 2010 when in fact the democrats ran the 2012 campaign on medicare. anybody who thinks 2012 will be like 2010 will be sadly mistaken. the voters acted decisively in 2010 to correct a move to a very big, aggressive radical government, and they felt they accomplish the dead. now they are interested in other things. things. -- accomplish that. i think republicans are going to have to articulate a vision for where they want to take the country, and to think we need to remind the public that we are not wholly in charge of the

nation's capital. the president still controls the federal apparatus. congress still controls the senate, and they are able to largely dictate what the end product of legislation is in this town. i think it is important to clearly articulate what we are for and realize that the voters pressed the reset button every election and it will be a new situation. host: from your vantage point, does 2012 look a lot like 1984 when the economy began to turn around? or is it 1992 when the economy and drove the election and elected bill clinton? guest: it depends a lot on what a the economy looks like next year. many economists predict we will have a sluggish economy next year.

if, on the other hand, we are in a situation where the economy is not doing well, and millions of people are unemployed and we are in economic malaise, i think that makes the ticket competitive. even with all of that, no matter what happens, i think congress is going to be in play and will be able to effectively defend the house majority. i think we have tremendous opportunities. host: 23 democratic seats at stake next year. guest: is a tremendous opportunity for us. not just the numbers, but geography. we have tremendous opportunities in places that are solid republican territory like north dakota and nebraska montana, virginia. we are going to try to be

competitive in ohio, and i think florida is another place where we have some good chances at. we have very few places that we need to defend. the only states that we are in a defensive position at all in terms of geography is massachusetts, and senator brown has done an excellent job with voters. i think all of that code really well for republican chances this next time around. host: we are talking to steven law, president and ceo of american crossroads, serving as the chief of staff in the 1990's and the former director of the senate campaign committee. a former general counsel at the u.s. chamber of commerce. sarah is joining us from nebraska. good morning. caller: good morning. and if president obama loses, it will be because how the

republicans do not even help to get jobs in america. they do not even step up to the plate when they are fighting for anything, so i don't know how this guy can sit there and laugh at us working people when we are trying to make a living, when he is up there making millions of dollars to not help to get jobs. i asked you -- where are our jobs? host: thank you, sarah. guest: that is a great question and a big area of concern. this last jobs report that came out was a really solemn moment for the country. high remember those monthly reports. those are not just numbers. those are people's lives. about 45% of the unemployed have been out of work for 26 weeks or more.

that is a life-changing unemployment. i was quite concerned as an american by the president's response on friday which was basically to say we will get through it all. the secretary of labor, the president's spokesperson for the work force, said we are on a good trajectory and we are making progress. that sounds like baghdad bob, a denial of the reality. to go to what the caller said, i do think republicans need to articulate a clear strategy going forward for how we are going to change the economy and get people back to work. host: lewis is from richmond, va.. good morning. caller: you can see what kind of uphill battle we have for the republican party. if you see what is going on this morning with a credit card swipe

fee that is being introduced, and it is -- this is being brought to us from the democrats. who is going to get all the money? has the democratic party has such an angry mob mentality right now. class warfare that has been class warfare that has been brought to us by obama -- everybody is in a frenzy [unintelligible] it carries over into foreign policy. policy. all of thise is being brought to us by the democrats and the government. host: thank you. guest: i am not sure if there

was a question in all that, but obviously, the bank fee issue is hot out there. i was talking about this on the way in. because of the internet and specific grassroots efforts, people have been engaged in issues more so than they used to be. we saw that in the health-care debate where people would show up to the town hall meetings and it would no more. i appreciate the fact that you have a lot of passion and you are engaged and speaking out, but there is a change in washington when you have a lot of people outside the beltway who have strong views and a lot of information. nevertheless, they are completely engaged and focused. i did not hear a question in there. host: our viewers and are engaged in a passionate, including this e-mail --

guest: in fact, when we run advertisements, unlike campaigns, we do not have an absolute right to put whatever we want on the air. candidates often challenge the truthfulness of advertisements. they can be pulled. we did not have a single advertisement pulled. we have an excellent record. we research our ads carefully. host: lee is joining us from houston, texas. good morning. caller: good morning. my question to the gentleman is how can you sit there and the

republican party [inaudible] when they took the house, the first things they said was jobs, jobs, jobs, but they have not done one thing about jobs. they are cutting jobs. teachers, police officers. why does the president even engaged in trying to compromise with republicans if they're only mission is to see him fail? you say one thing but you are doing another behind closed doors. you say that you are for jobs, but the republican party does not care about these people. yet you turn around and you want to get a tax cut for the rich, and yet you want to cut every

program there is to benefit the poor. how can you as a human being sit there and -- if i asked if you are a christian, you probably say yes. guest: i do agree with the basic premise of your question. republicans will need to articulate a very clear and convincing set of policies that are aimed to turn around the employment and the economic situation of this country in order to be successful next year. we are in the real jobs crisis at this point. republicans need to speak to those issues persuasively and show that they get it and how the policies to it. i think a lot of republicans are doing that affectively. the concerns that we have are the policies that were pursued over the last few years have

made the business community, those who create jobs, small businesses and the entrepreneurs, extremely nervous. if you are a small business owner, you have no idea where this economy is going. you are always worried that some new government agency would be formed to slap you on the wrist and shut you down. that is the environment that has got to get turned around. that is why we believe it is important that we have a new leadership in washington, d.c., who understand that dynamic. host: our conversation is with steven law, president and ceo of american crossroads. donna is joining us. welcome to the conversation. caller: good morning. i hope you'll bear with me. my only outreach is on the telephone. i am truly disabled person. i would like to know when the health-care law passed, i went

to the drugstore and i changed insurance policies. a new primary care doctor i never heard before -- i go to get my payment -- i have been paying about $30. now i am paying $100. $680 a month. social security does not leave you very much. also, i had cancer three times. i found out yesterday that my doctor is leaving the hospital because since the health-care law passed, he has had to work for the hospital. do you understand what i am saying? this democratic lady was on there the other day talking about when she was in their office -- when it is hard to walk around, for me, that was a plus. i do not understand it. you have president obama jumping on an airplane -- can you tell

me how much it takes to fill up a 747 7? he has a helicopter, an airplane, cars. he has no idea what people feel like. he gets on there like he wants a lottery of the world. he has no clue. people do not take taxes from people who give jobs. they do not have that kind of money. a lot of that money -- people need to understand this. guest: thank you so much, donna. i hope things get better for you. you point out an interesting fact about the obama health care law. obviously, very little of it has been implemented in the law. the administration is trying to exempt a lot of people to appease some of the enemies of

the health-care law as well as some of the advocates. but it is starting to affect the marketplace as doctors, hospitals, insurance companies, and others look at what the impact this law is going to have the for private employers. it will radically change how we experience health care in this country. i was reading a summary put together by the mckinsey institute which is very passionate, middle of the road, business advisory entity going through the impacts of the obama health care law. it is important to start to understand what the impacts are going to be. they will not be able to choose the doctors that they want, costs are going to go up, you are not going to have a high- quality coverage, a lot will change, and people will probably not like it.

a couple years from now when people will really understand what a nifty policy promised in that bill. host: today, the 11th circuit court of appeals will be taking up the case. this is the issue that was brought up. the oral arguments take place this morning, but we will get a feed of that posted on our website after 3:45 eastern time this afternoon. you could check it out at c- span.org. it is happening today. the audio will be released today and we will be posting it on her web site this afternoon. mary is joining us from alabama. good morning. caller: good morning. yes, i was calling in about the debt ceiling and how they always

try to stop it. many times, in the house, they voted on its own many times. -- on it so many times. no obama wants to stop it. if you raise it, people would have money to borrow and they could perform the jobs that they need. i have been watching the news for so long, and i have been looking at the republicans. you say you want to help the peoples. how can you help them when you are stopping everything that tries to go through? god bless you. you need to understand, these people out here are hurting. it did not stop the things that the people really need. you say that you want as their votes?

do the things that you need to do. this is a country of people. host: thank you, mary. guest: you brought up the debt ceiling folks may know that the debt ceiling is a limit on the borrowing ability of the united states government. we are scheduled to pass that quickly. many people said we would earlier. additional reserves were found to be able to prolong that. there are discussions under way now about under what terms congress would extend the debt ceiling. the administration has argued for a blank check, the opportunity to raise the debt ceiling without any controls on spending or efforts to restrain the unbelievable reckless pace of spending we have seen over the last two years. at the very least, there are folks who take an absolute no position on the debt ceiling,

but there are equally many who say we ought not to be giving a blank check to this administration or congress. there needs to be strict restrictions on spending going forward, and that is what the market is essentially saying. there was a warning from moody's that said markets are concerned about what will happen to the desolate and if it is not extended. there are also equally large concerns voiced earlier by standard and poor's about the reckless pace of spending and debt that we are setting in this country that could have disastrous consequences, not only for the federal government, but the entire economy as a whole. if we do not get this debt under control, we will find it very hard to go into the marketplace, and get financing for the government, and the

consequences could be unprecedented in terms of your average person and how it impacts them. host: when we sat down with bill clinton and george w. bush, they both said the same thing, that washington is often broken because of the gridlock between democrats and republicans. this e-mail from one of our viewers -- host: it is very difficult to get anything done whether there is a democrat or republican in the white house. guest: i think there are people of good faith who are trying to figure out a solution on this. figure out a solution on this. it was contained in the budget, to keep spending more. to keep expanding the debt ceiling and the debt. from the republican perspective, that policy

articulated is simply unsustainable. everybody now agrees with that. the question is going to be will the republicans and democrats come together? well the leadership on the hill reach an agreement that sets out some sort of restraints on spending and reduce spending dramatically in the outgoing year's budget? those discussions are going on and i am hopeful that they are successful. host: tom is joining us from massachusetts. good morning. caller: i would like to respond to some comments that mr. law made earlier in respect to campaign finance. i would welcome public funding of campaigns. of campaigns. i think the current system effectively blocks out a viable third party is from the

political debate with uncapped spending limits. i think if this is really a democracy, we need to have third parties involved in the discussion and not just in theory have them allowed to participate in the debate. host: if you were also saying -- -- a viewer saying -- we did have two wars that were unpaid for. guest: republicans did not come to this with clean hands, it isn't -- and it is something that both parties have to own up for. it is like a hockey stick in terms of the increase in growth from the previous administration. we had our own a share of that, and it needs to be corrected. i think most americans

understand that is what needs to happen. i certainly appreciate the ollar -- the caller's perspective. nobody supports the system anymore. the number of people who are checking off their willingness to spend a dollar into the fund has declined, well below 20%. as a result, the fund is going broke. the major party candidates, starting with obama deciding not to take public financing. the other issue, the viability of third-party candidates, public financing has not created viable third-party candidates. what it has unfortunately done is spawned a whole slew of less than viable third-party candidates, some of whom have figured out how to milk the system.

it certainly creates additional skepticism and definitely a waste taxpayer money when you have some fringe candidates who have figured out how to get money into their coffers to run personality advertisements of themselves and not a viable ideology. host: what excites you the most about 2012? maybe more so on the congressional race level. what excites you the most? guest: i think is going to be an election where, looking globally, where the really important issues about the future of our country will be discussed. the thing that gets me up in the morning every day and got me into politics is i am really concerned about the future direction of the country. i think we ought to be financially healthy. that is going to be a big part

of the debate. how do we make sure that our economy is sustainable in the long term? those are the issues that i think people are going to be focused on. we are going to be talking about the future of this country and what the vision gets us to where we want to be. i think we will have a tremendous opportunity to elect a principled, free-market republican candidate for president. because of the numbers and the geography, i think we have a tremendous opportunity to take the senate majority back which would be a wonderful achievement that we would like to be a part of next year, while at the same time we are making sure we have a house majority. even if everything goes wrong, which will have a backstop to make sure our perspectives are represented in washington. host: what worries you the most in terms of politics? guest: i think some of the calls

have reflected this. as i said earlier, 2010 is not going to be like what 2012 will be. i think if republicans try to turn the crank and run it like it was 2010, candidates will not be successful. republicans are going to have to run and nominate a fact of candidates, people who know what they are doing and can bridge both sides. in 2010, that was an intensity election. that resulted in much higher turnout on our side. none of that is going to be annapolis to 2012 when you need to show people that you can be a uniter, not a divider, and not just get the base fired up. host: steven law, president and ceo of american crossroads, thank you very much for taking our calls and e-mails and being

here on c-span. guest: thank you so much. host: coming up, a hearing on the president's health care bill which he signed into law in march of last year. you will have a chance to hear it goes on-line and radio as well as the night here on c-span television. the case is from atlanta. it is a three-judge panel. the judges will hear oral arguments. this is the latest challenge brought up by 26 different states who have all band together in opposition of the new law. the state's argument is congress is infringing on states' rights. and lower district court judge voided the entire health-care law after ruling the individual mandates are unconstitutional. the legal challenge continues to get underway.

the audio will be posted on our website at about 3:45 eastern time as well as tonight here on c-span television. coming up in a couple of minutes, the issue of food safety. we will get a perspective from the center for science in the public interest. first, we want to check in on the latest news. >> good morning. the report to be released today says that afghanistan is at risk of a deep financial crisis when the foreign troops leave in 2014. the senate foreign relations committee took two years to complete this report and finds u.s. stabilization programs have had limited success in afghanistan despite spending $20 billion in foreign aid over the last 10 years, more than any other country including iraq. in syria, the british prime

minister speaking earlier in the house of commons said britain and france will offer a resolution at the united nations condemning the crackdown in syria, adding that it will be focused on demanding accountability and humanitarian action. he went on to say if anyone votes against it or try to veto it, that should be on their conscience. an update from germany's national disease control center, the report that another person has died from the e. coli infection, raising the death toll to 24 in germany and one in sweden. the number of reported cases is up by more than 300 from the previous day as the number of sick people increases. those are some of the latest headlines on c-span radio. >> each year, congress tries to pass bills.

you could follow their progress with the c-span possessed of a comprehensive resources. congressional chronicle at c- span.org/congress. the c-span networks. we provide coverage of politics, public affairs, nonfiction books, and american history. find our content any time through c-span's video library. we take season on the road with our digital bus and local content via gold. -- content vehicle. >> every weekend, it is american history tv on c-span3 starting saturday mornings.

telling the american story. watch personal interviews. our history books show features some of the best known history writers. visit college classrooms across the country during lectures in history. go behind the scenes at museums on "american artifacts." get our complete schedule at c- span.org/history, and a sign up to have its e-mailed to you. >> "washington journal" continues. host: our topic is food safety, caroline dewall, food safety director at the center for science in the public interest. good morning and thank you for being with us. a lot of attention to what has been happening in germany. 24 deaths and hundreds hospitalized. it appears right now to be

centralized in the northern parts of germany. what can you surmise the cause is? what are the lessons for the u.s.? guest: i think the most important lesson that the u.s. needs to take from this very serious outbreak is that we cannot afford to have our food policies frozen in time. the bacteria are evolving. in this case, they have gone extraordinarily their land. -- virilant. we cannot afford to have the food policy just frozen in time. we need to be moving forward with new standards, with new methods of testing and preventing these types of out bricks from occurring. host: we were talking about this issue yesterday. everyone of us either has experienced food poisoning or knows somebody who experienced it.

why is it so common? guest: today, the cdc estimates that one in six americans will get sick over the course of the year from something they ate. that means in and the family household, probably at least one person will experience an illness. it is really important that consumers take steps to protect themselves, but the government also cannot sit still. that is what the agencies that are working here to prevent outbreaks from occurring are very important. host: 128,000 people hospitalized every year, and 3000 americans die from food- borne related illnesses? guest: that is right. it is a very serious problem. every year, we have that number of deaths. they are entirely preventable.

food board on this is one of the types of public health problems that is actually easy to fix. we have commitments by the food industry, by the public health officials that are in charge of this program to work hard. consumers need to do our part, but we need to also make sure that the agencies themselves have the funding they need to do the job. host: as always, we welcome your purchase a patient. our phone lines are open. -- we welcome your participation. the numbers are -- our twitter account -- is the u.s. doing enough? it is -- is it the responsibility of local health agencies to make sure restaurants and to crush restores abide by local rules?

guest: for the u.s., the general policy is that the u.s. food safety system has been antiquated, but last year, congress passed and then president obama signed a new legislation that would modernize an important segment of our food system. but the food and drug administration, which regulates 80% of the food supply, has a new law in place, and their job is to implement that law. the u.s. department of agriculture is still dealing with a 1906 statue. they have a relatively unaffected program but one that could be improved. host: i was out at a carry out restaurant the other day. they were making sandwiches bought their hands or not covered. guest: for restaurants, the

regulation is done at the local level. again, these state and local people who are really essential players in our public health system have to be in those restaurants and actually checking those practices. they recommend the food code which governs how restaurants prepare food safely, recommends that all workers be wearing gloves. host: what is e. coli? guest: it is a very common bacteria and lives in all warm- blooded animals, even humans. there are some strains like e. coli 157 and this new strain that have evolved into very high toxic pathogens. we know a lot about 1057 because we have been dealing with it since about 1993.

it lives in cattle, in bovine animals that have specific stomach characteristics. at the end of almost every outbreak, we are looking for that type of animal, usually a cow. has developedin some unique characteristics. if it does not have a specific gene that normally associate with these very severe cases. it is also a multi-drug resistant, meaning the antibiotics at some point in its life cycle has been exposed to a large number of antibiotics that are also important to human medicine. host: we have heard about the e. coli outbreak, but the latest one is a from bean sprouts or lettuce. what do you attribute that to? guest: they have had a lot of

false starts so far in identifying the specific cause. german officials initially thought it was cucumbers. most recently, they said they were testing sprouts from the area. at the bottom line is, as of right now according to my information, they do not know what the cause is the pri that they suspect it is lettuce, tomatoes, cucumbers, or maybe sprouts consumed by people in northern germany. the good news is all the illnesses are associated with illnesses are associated with people who were in that area of germany at the time when the opera started. the bad news it is continuing. we think the numbers are declining, and we hope this outbreak is ending. if you recall, the outbreak of salmonella a couple of years ago went on for several months. host: we are talking to caroline

dewall, the food safety director at the center for science in the public interest. she is familiar with capitol hill. hill. we invited her on in part because of the situation in northern germany and lessons that can be applied to the u.s. our first caller is from philadelphia. caller: my question is for caroline dewall. how are you this morning? i was wondering about if e. coli can get into it. i have a friend who loves orange soda. guest: soda is a highly processed beverage and it is unlikely that e. coli could get into the process. i do not think it could happen. it is highly processed per the e. coli is typically associated with a price of either meat or raw vegetables.

the good news is that cooking doesn't eliminate e. coli. host: one of our viewers saying -- guest: the person writing it is generally correct, that large outbreaks actually often are associated with production systems where a single accident, a single failure in the food system, can contaminate a large volume of food which is then put on trucks and circulated widely. we have had some of bricks linked to poor handling in restaurants as well. some large outbreaks. one i recall was actually e. coli that direct onto i think it was watermelon and some other fresh products that were eaten at a salad bar.

at the bottom line is we need to have the controls in both places, both at brought co- production and at the local restaurant level. host: steve is joining us from orlando, florida. good morning. caller: good morning. i was aware about a month ago of a bill passed, i think it was the [unintelligible] bill saying that american citizens cannot grow unprocessed food. there was a show or video on youtube that was showing that [unintelligible] host: we are getting a little bit of feedback. guest: steve, the bottom line is i think you have been exposed

to an urban myth. there is no law that passed that said that people could not grow fresh food. i have a garden in my backyard. i feel confident that nobody is going to be stopping by to check on your garden. the issue was that in regulating -- in creating a new system to regulate the food and drug administration food items, things like raw produce, causing the spinach outbreak in the 2006, and seafood products and some other high risk products, a number of local growers got very concerned about whether that would impact their ability to sell to local farmers markets. at the end of the day, the law has a number of protections to ensure those growers can sell their products locally. we are not interested in seeing

internet businesses in fresh produce, but people selling to local farmers markets, they can abide by state law or by the new federal law. host: matt has this point -- how do you respond to that sentiment? guest: i wish there was a simple way that we could ditch the dirty food. the bottom line is, organic production is excellent for avoiding things like pesticide residue and even animal drugs or the use of antibiotics, for example, in animal production. we recommend consumers purchase organic food if they want to avoid those chemicals, but the e. coli bacteria can show up in both traditionally produced foods and/or organic.

the good news is organic growers have been under restrictions on they cand of menanure use to make sure it is properly composted. so i think organic production is therefe as a candy, but i is no guarantee that you are going to avoid the problem -- safe as can be, but there is no guarantee that you are going to avoid the problem. host: linda is doing us from okeechobee, fla.. caller: good morning. caller: good morning. i work on a vegetable farm, about 2,600 acres, and we are required to produce clean food. we processed about 11,000 acres of the cabbage last year.

our vendors put us through a myriad of steps that we have to provide and show them that we are doing the process properly. the biggest thing with food is when you are preparing it you keep your kitchen is clean. guest: linda, i could not agree more, that it is a shared responsibility. just as you are taking all of those steps in your production system to ensure your vendors, the people who are buying the food from you, that you are doing it right. we also need to help consumers understand the steps that they need to take. i think we all recognize that it is not one person's responsibility, but we also need to understand that part of the reason why the vendors have such strict standards is because they do not trust that the government programs are strong enough or robust enough to protect their

customers. we would like to see that changed. we do think a strong, national regulatory program would help consumers and the companies that buy on behalf of consumers, the retailers, to trust that the underlying food safety system is stronger. it would be nice if you could avoid some of those audits if you could just have one inspector coming to your farm and checking instead of 20. host: what advice do you give parents or any food prepared in the home? guest: is critically important that everyone preparing food treat raw meat or seafood like it is contaminated. you have to assume that in the juices that touch in the service juices that touch in the service could spread bacteria onto foods like lettuce or other foods that

you plan to eat raw. use separate cutting boards. go ahead and wash it down with soap and water and then let it soap and water and then let it dry before you use it again. some cutting boards actually can go right into the dishwasher. i used those four things like chicken and things that i am most concerned that could spread the contamination. we recommend consumers wash their vegetables unless they are artfully packaged. if they are packaged and triple washed, your kitchen might actually contaminate them. it is really a personal choice for bagged that's the bulls like triple washed lettuces, but for most produce, you are going to want to watch it and trim out in the soft spots because that is where the bacteria may have penetrated the fruit.

host: james has at this point from north carolina, saying -- guest: some states who are controlling the issue of food poisoning in restaurants has started to look at this question of whether rare hamburgers can be sold in restaurants. your listener can certainly go home and prepare a hamburger however he or she would like, but the bottom line is the restaurants have any responsibility to ensure the product is safe. under-'re serving an cooked hamburger, they cannot give you a check guarantee of safety. a host: caroline dewall is the food safety director at the center for science in the public interest. rosey, good morning and welcome

to the conversation. caller: i just watched recently a documentary called "food inc." and it shows and documents how food is grown in the united states. it was flat out disgusting. in beef, 95% of e. coli could be eliminated if the farmers would feed the animals what the nature once the animals to eat which is grass instead of corn. they do not do it because it is not as efficient as if you feed them that steroid-filled corn. the other thing that they have showed is there are only a few large corporations now in america that control the creation or the growing of food and the animals and all that, and day dictate to these farmers how to grow the food, what to

use, what to feed the animals, and this is why i think when you see an outbreak, it is nationwide because the little farmer is being driven out of business. they also showed a local farmer who did it the old-fashioned, traditional way like 100 years ago, and his level of contamination was with less than that of the big companies that comply with federal law. do you have any comments about that? guest: that is a great synopsis of "food inc." which is a movie. it is a very fascinating story. as with all movies, not all of it is entirely accurate. believe me, if the beef industry could fix the problem with e. coli 1057 easily, they would have done it 10 or 15 years ago.

at this is a problem that in some instances has literally destroyed companies and causes very severe business consequences for these companies. so, there is not just a simple fix. you know, i've had grass fed beef and i think it's delicious. delicious, andry the bottom line is it is probably better for our environment. so there are many reasons that you might want to choose grass fed beef. you made a point about the control of the agricultural system. i think the movie illustrates that some companies have taken perhaps too much control, perhaps over the feeds that they sell. this can be a problem but is one that we need to deal with at the policy level, and consumers can

individually deal with by making good food choices. host: 24 deaths in germany and hundreds who are suffering from the e. coli outbreak spreading in the primarily the northern part of the country. some information on who is responsible for these food safety issues -- local agencies are responsible for any outbreaks and they treat them as local events. then, the centers for disease control get involved or any opera is that involve large numbers of people or an unusual number of cases. a state may ask for help from the cdc. the cdc. the different agencies look at all aspects from a federal perspective. tim is joining us from virginia.

good morning. caller: hi there. i hope i am not repeating something that was already discussed, but i am interested in your opinion on radiating food and whether that would prevent these outbreaks. secondly, it is interesting to me that somebody from the center for science in the public interest is not a vegan. what is your comment about repeating the food? guest: irradiation would destroy e. coli. it does not destroy everything. for example, it would not destroy viruses but it is largely very effective when it comes to e. coli, salmonella, and many types of common food pathogens. so, what is the status of

irradiation? a lot of consumers do not want to buy it. the food industry has been approved to use it, both for leafy greens and for ground beef for quite a while, well over five years and as many as 10 years. but the bottom line is they have had trouble selling it. there is a crucial store chain -- i think it is up in new york state that will only sell irradiated meat. " actually, it is all tover the north atlantic area, but it will only sell irradiation me to. it does not want to assume the rest. most companies that have tried to offer both have dropped it because of a lack of consumer demand.

so, the bottom line is the tool is available, but is not being used today. host: the caller mentioned that you are not a begin, or maybe you are? guest: i am not a vegan. i enjoy a wide variety of food choices. it took a long time to eat -- and not raw meat, i did not eat raw meat, but to serve meat to my children. i think when kids are young, their immune systems are not fully developed. i studied e. coli 0157, and it was not worth the risk to me to feed my children hamburgers, but that was a personal choice. i eat a wide variety of food. host: virginia, go ahead please. caller: is it true you are

allowed to cut ammonia in ground meat, and if that is true, what else are you putting in our food? guest: first of all, i am not putting anything in your food. i work for a consumer organization. host: we have a link through c- span.org. guest: the issue of ammonia -- the meat industry is trying a lot of things to try to increase the safety of ground beef to carry out the bottom line is americans love their ground beef. in some parts of the world, you cannot get a hamburger on as you go to an american restaurant. so, ground meat is a high-risk product. the germs on the and exterior of the meat are ground up into the center, where they can grow and

multiplied, so one company started using ammonia. that meet would be mixed with other meat, and simply reduce the risk for other countries. i think companies are trying a lot of different options, but it is the fda and the usda that would approve that kind of treatment. again, we need strong federal agencies that are reviewing the science behind what the companies want to do. host: let's look of the numbers. each year, one in six americans, or about 48 million people get sick as a result of a food-borne illness. 128,000 are hospitalized. 3000 die of food borne diseases each year. food contamination can happen at any point, during production,

processing, distribution, or preparation. we're talking with caroline smith dewall. phil joins us. caller: i would like to ask the guest the opinion on what she thinks would be the detrimental effects on food safety if in our haste to reduce our deficit there were massive cuts on the food and drug administration or the department of agriculture. guest: that is an excellent question, and one we are very concerned about in washington. the food and drug administration has an important new tool -- the food safety modernization act, but that new law will require many years to implement, and there are at the stage where they have to develop the regulations, the models, and

start to enforce the new laws, which means sending inspectors into the field. this is not a time when the agency can afford any budget cuts, but that has been proposed by the house-passed budget. we are watching this carefully. the usda food safety and inspection service also has inspectors actually there, in every meat and poultry plant in the u.s. today. they have a robust inspection force, but they need to stay there if we are going to make sure we do not have continuing outbreaks and thomases from food. the bottom line here is that this is preventable. if food companies believe they're never going to be checked, that no inspector will walk through the door and ask for them to explain their food safety system, then it will not be as good as it needs to be. so, it is critically important

that we have the agencies on the beat. we need votes on the ground in the plants, to make sure they can enforce the new law, and the older laws that are there to protect us. host: donald has this question. can you speak on the danger of genetically-modified foods and the use of hormones? guest: both are very important issues, both of concern to a lot of consumers. we really look at things from the standpoint of what the science tells us about the rest. we have not identified food safety risks from a number of those practices -- from genetically modified food -- in fact, in some cases, it might reduce the amount of pesticides that are being used and released into the environment.

so, we have not seen safety concerns, and hormones would only pose a concern if they were used in excess levels. now, the use of antibiotics in the production of farm animals and food animals is a major concern, because not only can that result in drug residues that result in drug residues potentially coming into the food supply, but also it could give rise to antibiotic-resistant strains of food pathogens. we are concerned about the use of antibiotics in food production, and we are encouraging companies to reduce their use of antibiotics. we have also petitioned the u.s. department of agriculture to declare a number of new strains of salmonella that have caused outbreaks. host: dog joins us from odessa,

texas. caller: over the last many years, going back into the 1970's, i guess, i first became aware there was such a thing as for -- the chanter of signs for public interest. you guys created many scarce. you created the scare of eggs, which caused a drop in production and consumption in the united states. that was, i suppose, pretty-well served at the time, but i wonder how much money, or your organization, or your buddies make off of depressing a food source price that you can invest in at a lower rate, and then reap the benefit later when it

was found to be baloney? guest: i appreciate your opinion, but i do not agree with that. the center for science in the public interest is funded by 850,000 subscribers to the nutrition health letter. we are not funded through any type of speculation or investment strategies, or anything of that nature. we are funded by consumers. the bottom line is we do not create outbreaks. we will report on them. we will respond to them. we will analyze, in fact, what steps the government needs to be taking to improve its food safety system. we looked at both the local level, with reports on outbreaks, restaurant inspection practices in different states and cities, as well as looking

at federal policies governing food. so, i really do not see that we are creating problems. we are really helping to respond to them in an informed way, and then advising the government on what steps they could be taking to prevent major outbreaks from happening. as you know, there was a major outbreak from eggs that happened last summer, so egg safety is an issue of major concern. host: a robust conversation on our twitter page -- guest: interesting. you had one caller who wondered how the government could allow ammonia to be served up with ground meat, and another saying "how can they tell me?"

i think the bottom line is consumers want to know what is in their food, and they want the government taking action to ensure that the things that are not safe are not being used. people eat every day. this is something that clearly creates interest among your viewers, because it really does impact people every single day. host: next is drew from michigan for caroline smith dewall. caller: yes, good morning. i thank you for your service in this matter. i would like to inquire about minerals and the aspect of ionization after and during the cycling of vegetation as it is naturally done.

ionization that would kill viruses and, in all, and bacteria, naturally, just by adding minerals, or cycling is it in to the water system for growing. guest: drew, i must say i am not familiar with that. if there is a natural process that could help reduce the levels of bacteria in plant reduction -- production, i think that would be no interest to many people. you are in michigan. michigan state university is doing a lot of work on food safety. you should share your ideas if you think there is a simple solution. host: is there any concern based on what is happening in germany that it could happen in the u.s.? guest: our experience is when

these pathogens emerge, they often come back. it does not happened yet in the u.s., but this is clearly a pathogen of tremendous andlence, causing two 0. half to three times the normal rate. this is a very serious concern, and while we hope it does not come to the u.s., it is certainly a pathogen that could come to the u.s.. host: you write that you should treat food poisoning as a potentially deadly matter. guest: a absolutely. there might be as many as three to 10 the number of consumers actually effected.

most consumers that get a case of diarrhea or ms they will treat it at home, self-treat it, and hope it goes away. if you're having severe illness, it is better to have it treated at a hospital. host: our last caller is from greenwich, conn., for caroline smith dewall. guest: i love orange soda. i do, i do, i do. host: another fan of orange soda. what did you take away from this conversation? guest: i am very interested that we had so many callers and so many people. this is an issue that impacts consumers every day. i want to recommend to your viewers that they go back to their kitchen, did it an extra scrubs, and make sure they're keeping their raw meat,

poultry, and seafood separate from any other items they are preparing. let's hope for the people in germany the outbreak -- outbreak ends. host: thank you for being with us. what is the state of the u.s. economy, and what does a 9.1% jobless rate mean? diane swonk will join us from chicago in a moment. first, about the other stories making is this wednesday morning. nancy calo in the c-span radio studios. >> nato's top official says the alliance will not put troops on the ground in libya to keep order once the conflict ends. the secretary spoke following a meeting with defense ministers from 28 countries that are members of nato, and said that everyone at the meeting agreed progress was being made in

libya. the comments made as libya was hit from nato with the heaviest bombardment since the beginning of the campaign. president obama is adding companies like groupon to a program with a goal to train half of 1 million young workers for manufacturing jobs, helping to fill the gap left by people who will begin retiring -- retiring. c-span is covering the president's remarks this morning. on energy issues, the nuclear regulatory association has sent a letter to dominion related to its third reactor. a decision on a license to build the reactor is expected in 2013, but the company has not yet decided on whether to build the

reactor. those are some of the latest headlines. >> this weekend on booktv, the role of fannie and freddie back in the 2008 financial collapse. henry kissinger on whether it is possible to join a true economic partnership with china. also, microsoft co-founder paul allen talks about his new novel called ibm and." -- called "idea man." >> on this nomination, the ayes are 72. the nays are 16. the argument.o the argu his is one of the 100,000 people

you can search and watch any time, and our c-span library. it is washington, your way. >> "washington journal" continues. host: joining us is diane swonk, the chief economist's have the firm mesirow financial. thank you for being with us. guest: my pleasure. host: there are a lot of headlines dealing with the economy stemming from the jobless rate of 9.1%. martin feldstein, a former senior economist to the reagan administration, says the economy is worse than you think. what is your assessment? guest: martin has been one of the first to say -- to bring the ball on the housing bubble, and he got angry at the fed for not doing something sooner. this is something he has been

talking about for many years, and was one of the first to warn about it. i agree that the u.s. economy remains fragile. although we have technically convert -- crossed our previous high water mark in overall g.d. growth, -- gdp growth, but the recovery is so uneven, but almost no americans feel that. there is a small upper-echelon of wealthy americans who of recouped their wealth, and are spending, but the rest of america is still struggling to recruit many losses. host: martin feldstein who was a former harvard professor is on the board of the wall street journal editorial board. let me read to you part of what he says in his conclusion this morning in "the wall street journal."

host: can elaborate on that point? guest: i agree. he is not necessarily say not raising tax revenues. he says we need certainty out of washington, a long-term plan. this is something ben bernanke and many economists are unified on. if we need a long-term, deficit reduction plan that convinces financial markets will bring our fiscal house in order, which means dealing with promises for the bulk of america. on the other side, we need to deal with the cumbersome tax code we have. it is ridiculous we have such high marginal rates in both the corporate and personal arena, yet we have all of these loopholes that distort behavior.

we can lower those rates and get rid of those deductions, which are actually tax expenditures. we are paying for that. why are we subsidizing million dollar-plus mortgages at this stage? if we could eliminate that. it is controversial. i think it is important to be thinking about cleaning up the tax code, along with cleaning up our long-term fiscal plan, so we can be any more steady growth plan going forward. host: the president ways in with this headline -- "obama stands combat."onomic compact picku also, in a statement yesterday, with the german chancellor of angela merkel, he says he is not worried about a double-dip

recession, but the pace of the recovery. >> i am not concerned about a double-dip recession -- i am concerned that the recovery we are on is not producing jobs as quickly as i wanted to happen. prior to this month, we had seen three months of very robust job growth in the private sector. we were encouraged by that. this month, you still saw job growth in the private sector, but it's slowed down. we do not know if this is a one- month episode or a longer trend. host: diane swonk, how would you respond to those comments? guest: i am also not worried about a double-dip recession, but the fact we're talking about any probability of it two years into an expansion underscores the fragility of their retirement. ben bernanke points this out --

all long-term unemployment rate actually increased. we have 99 weeks running out on a point be sure -- insurance. many states are rolling back the eligibility for welfare and the length of time people can be on welfare. that means the safety nets are disappearing. usually, we have a robust recovery, and it does not matter. we have an economy that is not generating jobs very rapidly, and not able to reemployed those people. to a million and struck -- construction workers lost their jobs. they have not been able to regain their jobs because there is not any housing market activity. those workers, the longer they stay out of the labor market, the harder it is for them to regain employment. this is something we were about as structural unemployment, with repeats of what europe went

through in the 1980's and 1990's. we do not want to go down that path. we'll not get in the pace of enough to recoup the jobs lost during the -- we have not been able to get the pace up enough to recoup the jobs lost during the recession. host: will get to your comments in a moment. our phone lines are open. let me go to the headline from "the financial times." the story points out that the fed might launch a third round of quantitative easing, known as qe 3. can you explain what that is about? guest: the fed has always held, going into the process of qe two, buying more treasury bonds, helping -- hoping that would stabilize conditions after we saw the economy lose ground

again last summer. by the fall of last year, it looks like it needed an extra lift, said they engaged in this large scale purchase program of treasury bonds. that comes to a end in june. the fed has also said if they sheet steady,dget that matters. the threat of doing additional purchases and unwinding that later, causing inflation, are too great giving the marginal -- given the marginal benefits of doing it today. anything short of another financial panic, their impact on the market is very limited. many question the efficacy of what they did originally of buying treasury bonds to expand their balance sheet. their balance sheet. they have almost $2.8 trillion

on their balance sheet by the end of june. we're not going away anytime soon, but it is interesting that financial markets are saying we do not believe in qe two, but we want you to do it again. the fed keeps saying we cannot come into a market blip, and they have to believe some of these things are transitory. they clearly are. the u.s. is suffering from the earthquake in japan. half of 1 million in vehicle production was lost due to interruptions from the japanese earthquake in north america in the second quarter. we will recoup that as the years goes on -- year goes on, but until we do that, we will have tight inventories. host: to you have a recommendation? with another round of qe 3 help the economy? guest: i think the marginal costs are too great at this

stage. i do not think they have much they can do. the best thing the government can do is deal with the uncertainty issue. have some certainty about what our tax laws will be, what will be going forward the next 10 to 15 years with austerity measures. we need certainty in those areas to move forward. uncertainty is our enemy. that is what is holding a lot of these companies with tremendous these companies with tremendous cash on their balance sheet, which has not existed before. if we could put that certainty on clever off little bit. it's tough but me ask if there is certainty from your standpoint -- host: let me ask if there is certainty from your standpoint. overall, what do you see? guest: we are looking for the economy to reach accelerate, but not enough. where talking about a very

uneven recovery, -- we are talking a body very uneven recovery with a 3.5% average in the second half of the year if we are lucky. so we have a lot of factors pushing growth into the second half as we recoups production from its japan. if the consumer will continue to model, along. while prices have come off of the peak, but i do not expect them to add much to consumer budgets. when the shining lights out there has been what some are concerned as a tech model, the ipo's we have seen recently in the social networking steer. those have increased dramatically, and that is one of the greatest sources of new employment gains. the head winds, of course, our government -- the federal government will subtract from growth as the stimulus is abating. secondarily, we see transfers to states have disappeared, and

headwinds from cuts to state and local governments will be strong in the second half of the year. in the second half of the year. in the month of may alone, 28,000 were costs, mostly teachers getting pink slips. host: diane swonk joins us from chicago. she is a graduate of the university of michigan, and also the university of chicago. she worked at first chicago and is also the author of all, the passionate economist -- "the passionate economist." she is now at the mesirow financial firm in chicago. hiring joins us from a play that, maryland. -- irene joins us from la plata, maryland. caller: let me remind the young lady that of the eight years

that george bush was in office, he did not create s many jobs as president obama created in two years -- he did not create as many jobs as president obama created in two years. let's address that, as well with with someonetation with such a far the deal -- far right to view. host: we invite a broad range. we appreciate that. we will give the guest had a chance to respond. guest: i've never been accused of having a far right point of view. however. i do not like to get into the political side of things. i have been an adviser to several administrations, regardless of their political

stripes. i do not intermix my politics and economics. i will correct her on that. i am not far right by any hint of the imagination, but that said, the bush administration had the second jobless recovery. we had the mildest recession hit in 2001, and coming out of that, it as 23 months to recoup the jobs lost. i think that is important because that was the second time we had dealt with a jobless recovery. the first time was in 1992, which was so mild, the jobless recovery was even longer -- i'm sorry, in the blunt -- bush administration, it was 28 months. when the first bush was in office, we have a hard time coming out of it, and it was the first time we had an incumbent president death could not get reelected because we had growth,

by not enough growth. now, we have a jobless recovery off of the worst recession in anyone's recent memory, the worst since the great depression, and it is likely to be of much worse given what we have, of at the beginning of this decade. the real issue here, and i do not think this is right wing at all, is the ranks of how many people are still unemployed, and now falling off of the ranks of unemployment insurance. the conservative side would like to say that would force them to work, but in fact we have already seen older workers replacing younger workers. the highest unemployment rate is among 16-19 euros. among 16-19 euros. if the minimum wages -- 16-19- year-olds.

the minimum wage is so high, they are electing to get more experienced workers. we do not have the safety nets for these people, the basic safety nets. you will see a lot more misery out there as the recovery struggles to generate jobs, and that is something that is very, very difficult to deal with. in some cases, the thing that is just not true about this recovery -- many people argue the extension of unemployment benefits for people to be unemployed longer. that is been true in previous situations, but in this the titular 1 much of the research suggests that as -- particular one, much of the research suggests that is not the case at all. he is not the lack of want, but the lack of opportunity. host: brian joins us, portland, maine, thank you for your call. i have enjoyed what you

head to say. i think a lot of the problems will be around the structural employment perhaps i have a master's degree. -- employment. i'm master's degree. i think the problem is relying on the private sector to hire a long-term unemployed. i do not think it is realistic. if you go to a corporation, and you have a gap in your resume, it does not happen. on top of that, i noticed the federal government gives a lot of preference points to the military, or veteran, or whatever case. they have a lot of preference points, but there is none for the unemployed. that might be a preference they might want to look into if they are serious about reducing unemployment numbers. host: how long have you been out of work? caller: about two years i had a

temporary work for about six months, but that temporary work did not match what the , which isnt was about to under $50 a week. guest: i wish i could say the government sector could step in, and we could tie it up in a lovely doll. if there was a silver bullet, it would have been shot. you have to understand that the federal government will be downsizing, so they will not be a source of an plan generation. as the current -- on in pointed jet -- employment generation. as a previous caller pointed out, we did not generate many jobs in the previous eight years, and most were generated by the public sector, and the health-care industry. we have the extra jobs in construction and real-estate, so

you did not of the diversity of job generation that you would want going forward because we need the private sector to pick up the baton. it is one of the reasons they haven't been stumbling on a little bit. if it is really -- de has been stumbling all little bit. it really is structural. i feel badly for your viewer. as much as i got called a young lady, i went around all lot longer than she probably thinks, and growing up in detroit in the 1970's, and trying to get a job, i tried with 30 different applications in the summer of 1981 to get a job between my freshman and sophomore year at the university of michigan, and my father had gotten me a cushy job at general motors and i turned him down pat i thought i needed to prove myself. the best job -- turned him down carry i thought unused to prove

myself. the best job i could get was a fast-food chain. it took me 30 applications and a week of looking continuously. i was relentless. i had 25% unemployment rate. i understand the misery that comes with it. he really is difficult. on the other side, the government does not have the capacity to be the savior that we would like it to be, nor can it be effected. the private sector has potential there, and even in real estate we are seeing relief in to the renter area. there will be a whole new niche in terms of people being absentee landlords for people that want to move but cannot afford to sell their home. i think there will be some opportunities opening up. host: let me share with you where politics and finances merge. this is the editorial from "the

financial times." guest: this is something that really is personally and annoying to me because we would mix the fed up in these politics. the man is a noble laureate in economics. the head of the banking committee had the audacity to say he was not qualified to do say he was not qualified to do the job, given the -- his specialties are doing these very issues. it is leaving the staff -- the fed short-staffed because of the

political gamesmanship on both sides of the aisle. it happened during the bush administration, and it happened during the obama administration. both sides are equally guilty on this. it is ridiculous when the fed is planning such a critical role in stabilizing financial markets. why are asking them to be the lender of last resort, -- we are asking them to be the lender of last resort, and we are asking them to fill roles they never expected to play in the global and u.s. economy, and to not staffed them appropriately is reprehensible. if i do not understand the politics on both sides of the aisle that you would hold up such important appointments of people that were very qualified. under the bush administration, a good friend of mine from the university of chicago had to leave because he could not get reappointed. peter diamond, very influential, is ridiculous they would hold no

no no appoint qualified people. -- hold that up, and not appoint qualified people. host: again, this is from "the financial times terror we are talking to diane swonk, the senior find -- times turco we're talking to diane swonk. james joins us from new jersey spre. caller: there is a simple way to solve the deficit problem. [unintelligible] contact with my governor as well. if everybody to heads a group -- who has a green. , working papers, a social , working papers, a social security card, had paid state

and federal taxes, we would be -- somewhere fromrefrom 2.8 trillion dollars. everybody who has a job must pay into the system. what you think about that idea? gee, i am unsure about your numbers. i was an adviser -- guest: i am not sure about your numbers. if you are working legally, your pain taxes. every time you buy anything you're paying taxes. i do believe that some of the biggest issues on the deficit are the elephant in the room we are not dealing with, and that as entitlements spending, social security -- it blew my mind that the bipartisan committee came up and said in december, 2010, we

would like to raise retirement age on 28-year-olds to 68 in 40 years, and give them 40 years to save more. by the way, those 28-year-olds will probably live to over 100, and that was considered outrageous. nobody took account that we were allowing ample time and we all live longer. i think the deficit has much bigger issues in terms of entitlement spending. we have the entitlement spending rising because of the baby boom aging, and health-care costs. those are the major factors, and we have not committed revenues. if you could cut entitlement spending by 20% or 30% and not to deal with revenue problems. i do not think most americans would be happy with that. the larger issue about how we do our taxes -- the corporate tax

code is very poorly-designed. to have more incentive for people to book profits in the u.s. rather than abroad, and hire people at home, those are things that are much more constructive. there really are no when-offs when you look at the deficit. it will take a common ground and for us to roll up our sleeves and figure out where we agree. with a sound bite solution, i did not think we will get there, and those numbers deny or the next 20 to 50 years -- those numbers do not add up when you look at the next 20 to 15 years prepari. host: mabel. caller: does diane swonk think

we need to revisit everify? every jobs they are doing jobs -- they are doing things that we could do as americans. i do not understand why we are not looking to verify. guest: my own view on emigration is that this is a melting pot. many of those jobs, if they're not getting paid when americans are paid, and doing jobs what americans will not do, which it is in many in cases the case, that is not a relevant argument. on the flip side, what annoys me the most, and it is very difficult for an economist to except his we are such an incredible agitator at the higher -- except is we are such

an incredible agitator, and we have a shortage of a supply of engineers and scientists. when they get educated here, we do not let them stay here. i want them to pay taxes here, in debate here, and keep america on the cutting edge of innovation and technology. if the fact we have made it so difficult for that to happen, particularly since 9/11, an event i was in the world trade center for, i find that a real attachment to the long-term stability of the u.s. economy. stability of the u.s. economy. to blame immigrants for taking the jobs -- actually, many immigrants are going home. also, many are getting educated here and going back to their former countries because they do not feel they have an opportunity. the number of legal applications have fallen. to not have those people here starting new businesses and hiring the people we want and

being part of this more dynamic economy, i think that is really outrageous. believe me, when you are talking about the few construction jobs that are being done right now, if they're being done by illegals, they're not been done with the government reinvestment act. i think we assume a major shift in that. in chicago, we have seen a lot of people now longer able to send money back to mexico, and many people return and fear they cannot come back. host: were specifically where you on september 11? guest: i was in the world trade center. host: diane swonk joins us from chicago, the senior economist from mesirow financial. chopped joins us from fort collins, colorado. caller: i have a question. i look at paul ryan's policies,

and it seems like by cutting spending and what they're really saying is they will cut federal jobs. they will go away. i was taught about the economic base multiplier. it is worth about the $70 -- about $1.70. it seems that cutting government spending, which will lay off teachers and firefighters is so counterproductive for the recovery. it seems like the keynesian policies of stimulating the economy, even qe 3, or whatever, would give that injection and the people of perception that it is coming back and we could move forward. the businesses will free up the money, and the banks are sitting on $3 trillion, and start spending some of that money and

stimulating the economy. it seems cutting jobs, cutting back, it is counter-productive. thank you. host: thank you for the call. guest: certainly, ben bernanke_ the same sentiment yesterday -- we need long-term deficit reduction. paul ryan has unveiled points, although when he did his multipliers, there is a lot of criticism about what he actually forecast. my own view is depth we need to take both party -- my own view is that we need to take both parties and the the long-term reduction and not play around with the debt ceiling issue. would you call your mortgage company and say i may or may not pay my mortgage in august, but how do you feel about giving me a home equity line of credit? he did not play around with the solvency of the u.s. government. -- you do not play around with

the solvency of the u.s. government. i think we face enough headwinds says there is. you do not want to add insult to injury. we can get on a longer-term stability program. there will be cuts and changes to the tax code. that is a fact of life. the sooner we deal with that, the less harsh pain we have to deal with up front. that is something ben bernanke was stressing yesterday saying qe 3, the tools we have conscious really are not effective anymore. he would like to see more of a keynesian side. that said, we are limited. at the moment we are benefiting because we look better than europe, and there as they fled to safety keeping interest rates down in the west. that is helping us today, but you think that we will never have to pay a premium for our debt because we are fiscally responsible is not realistic.

we already had to pay that premium in the 1980's and 1990's. there was no extra risk premium because there was a concern about what we would be able to service our debt going forward. if we need to get away from the debt ceiling argument, which i think is unproductive, and get more into the issue of what our long-term reduction plan is. the sooner we come up with a plan that can be phased in to not heard so much upfront, the better off we will be. host: let me follow up on a point from susan. what is mr. diamond's first name. he won a nobel peace prize. he won for his expertise in economics. ronald joins us. atlanta. good morning.

caller: i think the unemployment rate can be solved by howard stern. host: will go to jeanne, in waldorf, maryland. caller: there is such a big deal made about the $14.83 trillion debt. what is never discussed is the over-the-, or derivative market, which is largely not regulated, and the fact that when the crisis had us, there were two auditors at the sec, and the auditors at the sec, and the republican penchant for a be regulation and the auditors. if you cut staffing positions in the irs, and staffing positions , medicare, medicaid,

the private companies on the stock exchange do have those auditors, you are putting the government at a disadvantage. host: will get a response. guest: actually, the terror of this market has been a key focus. it can't reach the derivatives market has been a key focus. -- in the derivatives market has been a key focus. many are worried that the rules will be onerous. warren buffett was reduced to the market as weapons of mass destruction, particularly with the insurance issues aig got into. that said, he backed off because he realized his own companies were using derivatives to hedge important positions, and many industrial companies used it in an effective way. it was the financial services industry that got into dysfunctional you spread their trying to make that market more transparent -- dysfunctional

used. they are trying to make that market more transparent. yesterday, i did not know how many people were watching, but jamie dimon questioned ben bernanke, and kick off a list of all of the things that are gone now because of regulation, and there is no question that deregulation played a role, at one point in time regulation was too strong. it started during the ford administration. it. on an accelerated through the carter administration, -- it went on for the carter administration, and then we side pickup and get a boost in the clinton years. really, everybody has blood on their hands. we voted in people that did this. there was some promise that we

thought we were going in the right direction sometimes, and clearly, the pendulum swing too far. one of the hardest hit issues for the federal reserve is, -- the hardest issues for the federal reserve is they had to deal with haiti. they did not regulate insurance companies -- aig. they did not regulate insurance companies. they were not supposed to be doing that. much of the shadow banking system, countrywide, all of those companies, they disappear off of the face of the earth. as they come back, there will be much more regulated. having not been in the banking industry for a while, one of the things i remember is if we kept complaining st. listen, these other guys are doing stuff we cannot do, making money at it. they are also taking risks that we could not take. what was interesting is that the

banks were buying back better risk in its entirety. i think there really is a balance between ben bernanke -- ben bernanke stressed it well, we do not want to over rate -- over-regulate, but not under- regulate. whenever markets and not transparent, that will be a problem. the function of government should be to make markets more efficient, and at times that means regulating. that is one thing people have to get the balance on -- what is the right balance of oversight. you cannot stop fraud, but you would like to minimize the incentives. host: our guest is the chief economist for mesirow financial. but me ask you to respond to another headline -- let me ask you to respond to another headline, with a reference to headline, with a reference to the lost decade, with the

headline "time hill's financial wounds -- heals financial wounds." it talks about all of the back- and-forth we have seen since the oil embargo, the stock market crash, the housing market bubble, and, of course, the bailout of wall street in 2008- 2009. a guest: history is not good for tender of the future. the recession revealed the deep income inequalities said have been building since the 1980's. educational attainment in this country reached a peak in the 1970's, the moment information age was breaking, and you saw the bottom half of income earners stagnate, while the top

10% accelerated. they were the most educated but the highest returns. we fill that gap was dead. if we did that deliberately. it was more expedient than educating people. we also saw the gap in wealth. most americans consider their home there and most important asset. many high-income households were able to double down as the market dipped during these last several years, and are now already exceeding the previous high-water mark on wealth. one, they do not hold their largest asset as their home to read many older whether individuals have a lot of bought -- homes. many older individuals have the many older individuals have the money in bonds. the idea of the market average

alone, it illustrates the income gap as well. also, many people holding 401ks, just to make ends meet, families that and then a unemployed have dipped in to their accounts, and that has meant they have not been able to take advantage when the market came back again. they actually lost money. it really has emphasize this gap between income inequality in the united states. when i go to new york, boston, the most fancy restaurants are the most fancy restaurants are packed again. on madison avenue, people are shopping. , then, when i walked into the big dogs discounters near my own home -- then, when i walked into the big box discounters near my own home, it is a different story.

host: michael joins us from massachusetts. good morning. caller: i was hurt and aig was the in sherer. i had two surgeries and they deemed me disabled in my right arm. since then, nobody will hire me. i started my own business. now everybody tells me you can only make money for the first three years, or the loss for the first three years. now, nobody is spending any money. if i turn my hobby into a business to make money, provide for my son and my wife. host: what is the business? caller: i started a fabrication shop. i was a commercial plummer for 14 years until i broke my a