demands of their business owning members. we urge congress to permit credit unions to do with the reestablish to do -- serb their members, including those who own small businesses. we have the willingness to help and the capacity to help, but we need congress to enact this bill. thank you for the opportunity to testify. i looked over to your questions. >> thank you. mr. walcott. >> thank you. i am be president and ceo of grand rapids state bank. i am 8 fourth generation community banker. the grand rapids state bank is a state-chartered bank with $230 million in assets. it is located in grand rapids, minnesota. i am pleased to represent our members at this important hearing. we appreciate the opportunity to

testify on legislation that would expand credit union powers by raising the cap on business loans. we strongly oppose the small- business lending enhancement act. congress should not expand credit union business lending powers unless it is also prepared to tax credit unions and require compliance with the community reinvestment act. the current tax exemption is a link to and cannot be justified by the original mission of serving individuals with modest means. credit union business lending is an immediate threat to my bank. i am happy to compete with other tax payers, even large bankers. this distorts the market and creates an unfair advantage. i have lost business lending opportunities to credit unions. last friday as i was preparing for this hearing, a longtime customer told me they were taking three loans into two

separate credit unions. one was a loan on real-estate for development. priced it at 400 basis points before my right. the sec it was a commercial loan. the third was a mortgage. the bill would allow business loans to be 27. have percent -- said it -- 27.5%. the cap was not set arbitrarily, but was intended to ensure commercial lending which comprise no more than a marginal part of the credit union's lending. credit unions have portrayed this bill as an effort to make more credit available to small businesses. the truth is only a small number of credit unions are at or near the current business spending cap. we estimate this number to be about 0.5% of the approximately 7400 credit unions. over 70% of credit unions report

no business loans at all. those credit unions at or near the cap or the largest, most complex credit unions. yields the maker multimillion- dollar deals, not small business loans. there is ample capacity for the remaining 99.5% to expand their business lending. there are numerous express it -- exceptions to the cap. some advocates of the bill blamed this expanded credit union and commercial lending will come at no cost to taxpayers. the cbo has identified credit union lending as a tax expenditure. this is why be bipartisan policy center chaired by former senator pete domenici and alice rivlin recommended eliminating the tax exemption. it would be appropriate for the senate to hold hearings on this tax exemption. what is the cost of the tax subsidy?

the most sophisticated analysis to date was done by the non- partisan tax foundation, which values the subsidy at $3 billion a year and $32 billion over the window. the loan that was overpriced by 400 basis points was made possible by this tax subsidy and a failure to adequately and evaluate the risk. when credit unions seek to expand their business lending powers and become the equivalent of banks, lacking expanded lending powers to the tax exemption is a matter of tax equity. thank you for convening this important hearing. as a community banker, i feel the direct impact of creating commercial lending. i am grateful to provide my perspective. we coat -- we strongly encourage this committee to reject the calls for tax subsidized credit unions. it will not measurably expand

small business credit or expand -- or create jobs. i looked over to answering your questions. >> thank you, mr. wilcox. >> good morning. i am testifying on behalf of [unintelligible] i served as president and ceo since 1990. webster first is a committed the credit union with over 44,000 members. the entire credit union community appreciates the opportunity to participate in this discussion regarding business of lending and allowing credit unions to further assist in the economic recovery. when congress passed the credit union access act of 1998 it put in place restrictions on business loans, but at the same time as the treasury department to study the need for such a cap.

in january 2001, the treasury department found the following -- credit union business lending currently has no effect on the viability and profitability of other injured depository institutions. it also established a business loan of $50,000 a callous toward the cap. this number has not been indexed more adjusted for inflation. some critics claim only a limited percentage of credit unions are at the lending cap and, therefore, nothing needs to be done. they fail to see the big picture of habitat acts as a disincentive. credit unions will ultimately reach this threshold. the banking industry argues that the lending cap should not be raised. what the banking industry predict imagine is that a large number of banks do not pay corporate federal income taxes themselves because of their subchapter status. there are nearly 2400 banks that

avoid corporate income taxes today. it is the estimated value of the entire credit union tax exemption. webster first has been at the business when the cap for over a year now. we understand that member business lending is not about credit unions, but about helping small businesses and the jobs they create. it is unfortunate that webster person cannot handle all the requests we receive due to this cap. webster a first has made some great inroads into business lending and has assisted multiple families and businesses. we help an individual or purchase an older gas station. he was able to upgrade all the fuel pumps, computer services, and revamp the store. it now includes a coffee shop. its success allowed them to upgrade it be out -- the unused property behind the station. it became 9% utilize.

he recently sold the property for a substantial profit. as this committee knows, business expansion means job creation. in march, the small-business lending enhancement act was introduced. this would raise the credit union business lending cap to 27.5% of total assets -- up from 12.5%. this will stimulate the struggling economy by stimulating access to credit. in order to see the gap increased, a credit union needs to meet st. -- meet strict eligibility requirements. this bill is a well thought al solution that includes important provisions to ensure the safety and soundness concerns are addressed. this bill will not only help credit unions, but more importantly, it will help american small businesses. we ask that the small business lending enhancement act be considered by the banking committee and on the senate floor as soon as possible.

the credit union business of letting cap established in 1998 is arbitrary and outdated. the need for such a cap was questioned by the treasury department as far back as 2001. while we believe that the statutory cap should be in place, a number of credit unions like mine and the millions of members we serve would benefit from the enactment of the small- business lending enhancement act. this would provide a practical and well thought out approach to raising the cap while addressing concerns about rapid growth and safety and soundness. we also support raising the $80,000 definition of a member business a long as it has not been increased since its inception. many credit unions have capital to lend small businesses across the country. we are in the position to further assist in recovery efforts. however, we are hampered. raising the cap will make available immediate funding to help small businesses create

much needed jobs. i thank you for the time and opportunity to testify. i welcome any questions. thank you. >> thank you. >> chairman johnson, ranking member shelby -- my name is steve wilson. i am chairman and ceo of the national bank in lebanon, ohio. i am also is the current chairman of the american bankers association. aba is strongly opposed by recent efforts to redefine the credit union charter in ways that would effectively turn credit unions into tax-exempt banks. this effort most recently embodied in senate bill 509 would allow credit nance -- credit unions to increase the gap and make significantly more business lending. this would allow a new breed of

credit unions to move aggressively to pursue business customers through commercial loans. it would also serve as an invitation to credit unions that are currently not near this cap to focus on business lending to the exclusion of consumer lending. under current law, credit unions have been aggregate member business cap of 12.25% of assets. however, business loans of under $50,000 do not count against this cap, nor do many other types of business loans, leaving ample room for business -- for credit unions to serve small businesses. there is a limitation on business lending because credit unions are tax exempt. senate bill 509 would allow the ncua to increase the gap to

27.5% of assets, more than double the current cap, and a greater business of lending authority than that of federal [unintelligible] a credit union that -- would certainly reduce its consumer loans, however, the bill does not require the credit union to notify its members in a clear manner that they could see a reduction in consumer loans. the bill does not require that members of the credit union expand -- approve an expansion, an action that would create a tax exempt bank. in contrast, credit unions that seat savings banks' charters must mail such a notice and give such a disclosure and have an affirmative vote. make no mistake about it, sen that bill509 was allowed a credit union to look and act just like a bank without the

obligation to pay taxes or have regulatory requirements, such as the community reinvestment act. members of congress has recognized this fundamental problem repeatedly. senator kerry himself stated from the senate floor, "if credit unions were never intended to be alternative tax- exempt commercial banks." there is a strong legislative history that supports the unique charter of credit unions with very specific restrictions in business lending. these restrictions were put in place to protect credit unions from lending that could pose serious threat to the safety and soundness. in addition, there were put in place to make sure credit unions remain primarily focused on individuals, especially of small planes. the congressional concern is well founded and echoed within many -- echoed by many within the credit union industry itself. business lending should be limited for all credit unions.

however, there is an alternative. credit unions that want to expand business opportunities already had an option available to them. they can switch to a mutual savings charters. this charter provides the flexibility credit unions' desire, preserves the member focus that is the trademark of the credit union charter. unfortunately, the ncua has erected obstacles making it extremely difficult for a credit union to become a mutual savings bank. i thank you for this opportunity to share my thoughts and i am happy to answer any questions. >> thank you, mr. wilson. a question for mr. wilson and mr. wilcox -- over the past several years, there have been many versions of legislation to remove or raise the cap for

member business lending and credit unions. last year, many changes were made to legislation to give more control to the regulator to determine which credit unions should be able to demonstrate a history on business loans. what do you think about changes made by the senator and do they address any of your concerns? >> thank you very much. i would like to respond to one thing as i began that was in the testimony. that is the subchapter s banks do not pay federal taxes. i am not a subchapter s federal bank. i am a bank that pays taxes.

i pay taxes twice. i pay taxes at the bank when we make the money and then i dividend to might owners, the shareholders, and they pay taxes on the same income. it is true that subchapter s banks only pay the taxes that is a dividended to their owners, but they do pay federal taxes. it is a misnomer to say they do not. i want to clear that up. as to your question, there is still a great concern on our part. the concern is -- i would just use my bank as an example -- i compete as a $750 in dollar -- $750 million in federal bank. i look at the credit easing in ads and billboards.

the first thing they say is "if you work, live, worship, in essence, breathe imi market area, you are my member." this idea that they have a common bond is not true. they are competing directly with me. i am awash in liquidity. i am down to 65. i want to make loans and i want to make loans bad. i fall over any small business owner who was a loan because i need those loans. there is only two reasons i will lose a loan to a credit union. number one, they would use their tax-exempt status to underprice me. you must realize that when i make a dollar, i only keep 70%

of the dollar. they keep 100% of that. they advertise that ability to charge less for loans. the use that tax exempt status. they do not have a common bond. i can lose a loan because the can underprice me, or i can lose a commercial loan because i would not have made it in the first place and they are willing to take more risk in not willing to take. i do not know that that is it in the best interest of the credit union charter. i like the credit union charter. we are for charter choice. it is the absolute foundation of the dual banking system, but different charters have different restrictions. these business lending caps should stay in place. >> mr. wilcox? >> the changes that you inquired

about do not go far enough, first of all. but i, like mr. wilson, compete directly with credit unions in my market that are four or five times the size of my $230 million bank. they do use their tax-exempt status to very selectively target the loans that they would like to take in a fashion i simply cannot compete with on price. in many cases, we see increased risk in loans that are not able to be underwritten in a safe and sound manner taken on in some cases in the credit unions. the restrictions that are in place are there for a reason. they would like to enjoy their tax-exempt status and continue to do so. those restrictions should remain in place. all would be the first to say i would welcome all credit unions

to make a subchapter s election and pass those taxes on to their members just like i pass it to my shareholders. we do not pay tax at the corporate level, but our shareholders pay that state and federal tax. it is quite a high rate. i will encourage them to make the election and support that tax. if they want to do that and engage in commercial lending as they see fit. >> thank you, mr. wilcox. it appears that the levels of members' business loans and charged ups have increased. does the current economic climate dissuade you from underwriting member business loans? >> yes, thank you.

it is true that member business lending delinquency and increased during the economic crisis, but recently we have seen those numbers come down. as is reflected in a written testimony, credit union member business loans perform much better than bank loans. underwriting standards at the credit unions have gotten another look from the management perspective because of the crisis, but credit unions have a strong track record of safe and sound business loans. >> first of all, i think we look at the delinquencies on the business loans you got to take into consideration that the real estate loans, consumer loan portfolios, credit card portfolios all increased with the downturn of the economy. the delinquent loans we have had in our portfolio are under 2%. our losses are nearly nil.

we had won substantial loan that we took a substantial loss on. we regained some of that loss when the property was resold. speaking on behalf of an institution that rights well underwritten and secured loans in our business loan portfolio, our delinquencies are here. i think we are ok. we are able to continue writing loans. we are maxed out as i stated in the beginning. we continue to look for opportunities to serve the business speaker -- business people in our community regardless of delinquency status. >> how do you manage the risk associated with business loans and your institution during these difficult economic times? >> a couple of comments were made about the big multimillion- dollar loans. we have a couple balls that are sizable. the largest one is probably $3

million. the majority of our loans are diversified among small-business owners who are looking for the $50,000 where the $250,000 loans. i would say that 85% of my loan portfolio this within the national average of approximately $233,000. we diversify amount collateral is agent for real-estate, equipment -- very few on receivables. we are conservative on who we underwrite two. we look at all the businesses that come in and look for lending. we try to make sure that that it is possible, we will lend them the money to enhance their businesses. we do so in the best fashion possible. we also make sure we are not giving away money. we follow the rules and regulations. we are diversified and do not have a high concentration in any area. that is how we reduce our risk.

>> senator shelby. >> thank you. in mr. wilson's testimony, he argues that increasing the business of lending cap would allow credit unions to look and act just like banks without having to pay taxes or comply with bank like regulatory requirements. how do you respond to those concerns that the playing field is not level because credit unions are tax-exempt? >> we could talk about this all day. thank you for asking me. there are major differences between the credit union and the bank. without going through the whole platter of differences, we run on volunteerism. our institutions are under more regulatory restraints than the banks are. >> you are saying the credit unions are under more regulatory scrutiny than the banks? >> we are under more regulatory

restraint than the banks. here is an example. what we're trying to increase is our limitations on business lending. we have no restrictions on what we can offer because we are credit unions. all we are asking here is that we need to be able to increase these limitations slightly in order to better enhance our services to our members. ratings are an important indication of the safety and soundness of any financial institution. would you support requiring a credit union to have a camels rating of one or two before its business lending cap could be increased? beggars to safety and soundness. >> there is no doubt that one or two definitely shows you an institution is safe and sound. a camel 3 does not mean a

credit union is safe or sound. >> is an indication it may not be strong. >> i would agree with you, but a camel rating one or two institution has scored one other%. >> mr. cheney, i in your testimony you argued that the capital business of lending disproportionately hurts small credit unions. you also indicated that raising the cap to 27.5% would change the economics significantly, making it possible for credit unions ander -- as small as $20 million to reasonably participate in this market. those are your words. what is the basis for determining that increasing the cap to 27.5% would be sufficient for small credit unions to participate in business of

lending? >> thank you, senator. it allows more credit unions to be able to justify the investment necessary to set up the business lending operation. yet to hire people who have experience in the field. you have to set up procedures and internal controls. that is the basis for that statement. >> you also, i in your testimony, point out that nearly 70% of credit unions do not engage in business lending currently. why do so few credit unions currently make business loans? for those credit unions that do business lending, what are the most common types of loans that they make? >> we think that the cap is a reason that so many -- so if you do business. the restriction is so low. before 1998, there was no cap on credit union business lending.

if you are a $20 million or $50 million credit union, you cannot afford the expense. raising the cap will encourage more credit unions to get involved. in terms of the types of lending, the average business loan is to under $50,000. most are small business loans. >> mr. wilson, you probably were here earlier in heard the chairman's testimony. she said that one way of dealing with the credit crunch would be to increase the business lending cap. she also noted that "access to credit remains difficult for many small businesses and of entrepreneurs that depend on financial institutions for funding. why do you think many small businesses are facing a credit crunch? >> because of the state of the economy.

their cash flows or down. their collateral has been diminished. there are a number of reasons. there are people we would have landed to in the past that we cannot lead to today. hopefully will be able to lend to them tomorrow. i think it wise that we do not from a safety and soundness standpoint. one of the statements that was made that mystified me was that credit unions or more tightly regulated than banks, particularly in the commercial lending. that was an interesting statement. they made the statement in testimony that they did a better job because they have had less charge-offs than we have had at banks. i was curious about that. i gather some statistics. it seems like we are not comparing apples to apples here. i would say that my regulator,

the officer of the comptroller of currency, is much stricter. i was amazed at the recent that they avoid charge-offs. they allowed delinquencies and 12 months and beyond. they have a great bucket of loans that are delinquent more than 12 months. banking regulators would have had us right those off well before they got to 12 months. that is not really a fair comparison. the other thing that is such a misnomer, even though tax exempt and adding the requirement to serve people of modest means -- you probably are aware that the gao did a study on that. in fact, banks service more moans of moderate income individual households than credit unions do.

the gao found that income service in banks was 41% of the household. with credit unions it was 31% of the household. let's get rid of the tax exemption and compete head on. let's help small businesses and create jobs. >> mr. wilson, has the dodd- frank legislation had an impact on banks giving loans to small businesses? >> absolutely. the time we spend on regulatory burden -- the uncertainty that all this regulatory environment and tax environment has created has caused many of our good business customers, those that would normally be expanding, buying equipment, creating jobs, not to pull the trigger on projects. i do not think i have ever had a larger pipeline of loans where

the individual businesses are not willing to pull the trigger because of the uncertainty of taxes and regulations. >> mr. wilson, i think he went into this a little bit earlier. i want to give back into it for the record. both mr. cheney and someone else noted that one-third of all banks are exempt from federal income tax. they argued that puts many banks on a more equal playing field with credit unions. you talk about that earlier. again for the record, how does the treatment of subchapter s corporations compared to the credit unions? credit unions are exempt from taxes. if your subchapter s corporation, it passes to the

owners and they pay the taxes. >> that is correct. >> the tax is paid one or both ways. >> that is correct. if you are a c-corp, you pay it twice. you pay when you make it any pay it when you give back the dividends. when subchapter s, they only pay it wants, but they pay it. i do not have a problem competing against a subchapter s. >> mr. wilcox, in your testimony you noted that your bank has lost business lending opportunities with established customers to credit unions. you argue that the credit union tax exemption creates an unfair advantage and distorts the market. for the record, how does the credit union tax exemption undermine your ability to offer competitive rates? is it because you're taxed and they are not?

>> that is correct. >> also, mr. wilcox, mr. cheney states in his testimony that business alone net charge-offs rates for credit unions have been roughly one-fourth of the average for banks since 1998. accordingly, he argues that credit unions can provide business lending in a more safe and sound manner than banks. why do credit unions appear to have a lower net charge-offs rates from business lending than banks? is there a reason? is it the way they are regulated? is it the way they are pressed? what is it? >> it could have to do with some of that. i think mr. wilson spoke on a few of those facts. banks are under very strict regulatory requirements, especially as it pertains to charge-offs. we have hard caps on delinquencies. depending on the type of credit, it is demanded to be charged

off. we face severe regulatory scrutiny. all the regulatory -- all the regulators do look at that on a very regular basis. they are looking from a safety and soundness perspective to be certain that the banks are not only managing their delinquency, but not hiding it. it would be inconceivable for me to have a loan that is severely delinquent and be able to carry it continuously on my books for 12 months and not charge it off. i would be criticized and could possibly face enforcement orders or other things of that nature if that was a routine practice. >> with that would be -- would that be what we recall toxic assets? >> i would not want them on my books. >> senator, can i comment on that as well? credit union charge-offs or lower than banks. credit union delinquency is lower than banks. it is not a situation where

credit unions are hiding delinquency by putting it in charge-offs. it has to be in there somewhere. one or the other. as far as loans that had been on the books for a long period of time, those are easily discernible. it is something regulators tried very closely. if the loan is all there for 12 months, i can assure you there is a reason for that. all it also like to comment on subchapter s status. credit unions give their earnings back to their members in dividends. they pay taxes on dividends. attacks on the credit union is nothing more than a tax on the credit union member. >> that does% -- present the credit union is paying the dividend to the members. >> i am a subchapter s bank. i was a c-corporation.

whether or not the subchapter s makes a dividend to its shareholders, the tax must be paid. even if the holding company -- whether or not the shareholder receives a dividend check from a subchapter s bank, the shareholder base the tax. every quarter. >> i want to thank the witnesses for this testimony. as we have seen it, the views on these issues are varied. i think today's hearing deals with some good information. we will consider this issue going forward. thank you to my colleagues and our panelists for being here today. this hearing is adjourned. [captioning performed by

national captioning institute] [captions copyright national cable satellite corp. 2011]

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[room noise] [no audio] [room chatter] >> this morning, highlights from

saturday's republican leadership conference. we will hear from president obama impersonator, reggie brown, retired lieutenant colonel steve russell, and texas governor and potential presidential candidate rick perry. at 7:00 a.m. eastern, "washington journal," with today's calls and see spends " newsmakers" to that. -- after that. on "washington journal," presidential politics in reaction to presidential politics at the republican leadership conference. then a former cia analyst at 20 years talks about the al-qaeda operation since the death of osama bin laden and the airport economist chief economist looks at the breakdown of airline fees.

the airlines made $5.7 billion in revenues from those fees. >> the c-span coverage of the national cable telecommunications cable show continues today at 5:15 p.m. eastern. julius genachowski is interviewed by the former fcc chairman michael palle who held -- who heads the ncta. then they look ahead to next year's presidential election with david axelrod and former national committee chairman for the republicans, ed gillespie. >> the time ordered the world when i was growing up. >> page one producer andrew rossi looks at the newspaper industry. >> came into it without a grand sense of what the solutions are for traditional media. i came in with a desire to

observe. >> will talk about his new documentary tonight on c-span "q &a." >> president obama's and personnel are reggie brown performed at the republican leadership conference in new orleans. he spoke for bad 18 minutes. -- for -- for about 80 minutes. -- 18 minutes. >> thank you all so much. i know that you are republicans but that wellcome is pretty weak. listen, i will go backstage and

you will try that again. [laughter] [born in the usa] >> thank you so much, louisiana. that's what i'm talking about. that is a welcome. thank you. thank you all so much. yes weekend. -- yes we can. god bless you. well -- now, that's enough. it is my turn to speak. now -- it's great to be back in new orleans. is it hot outside or is it just

al gore. ? let me be clear -- let me be clear -- i am here today to extend an olive branch to the republican party. i don't want to ruffle any fetters today but would you all mind changing this room around according to the pre-1967 seating arrangement? [laughter] you can go over there and you can go over there. i must thank the chairman of the national republican committee for all that you do. what is it exactly that you do? [laughter] oh, that's right, i appreciate you, i really do. reince preibus, that name sounds a little fishy. [laughter] can someone called donald trump

and verify his birth certificate? [laughter] i think we can all agree that an event like this needs a voice from washington. the voice of reason. a voice of hope, someone that will look you right in the eye and give you a big hug and let you know everything is going to be ok. unfortunately, michelle could not be here. [laughter] when vice president joe biden heard that was coming here today, he truly wanted to be here. he was so excited. he pulled me in close and held me tight [laughter] he leaned in just like that and he whispered in my ear ," this is a bigeffin' deal. [laughter] that is what i said, i know. that's why you are staying here. [laughter] you may be asking yourself what

is the president doing here today? the budget is out of control. the deficit is rapidly growing and there are threats of a government shutdown. i figured i would do with any great president would do in these trying times, head down to louisiana and polish of a my golf game. [laughter] looking good. i love vacations. a few months back the family and i took a nice relaxing vacation in the state of my birth, what he. or as the tea party is still call it, kenya. [laughter] but time does fly when you're having fun. we're more than halfway through

june already. my favorite month is february, black history month. michelle celebrates the full month and i celebrate have. half. [laughter] my father was a black man from kenya a mother was a white woman from kansas. so, yes, my mother loved a black man and snowshoe is not a car not anio, she was kardashian. [laughter] most of you know i have not been able to quit smoking. i am afraid i might need some outside help. let's take a look at this picture. [laughter]

one year later, someone snapped this photo. [laughter] i need help. somebody -- [laughter] the worst part is president's age so quickly. this is general george washington before he agreed to be our first president. he looks nice and young. this is president washington while he was our president. and this is george washington today. [laughter] oh, yeah. see what i mean? before 9/11. he looks good and decisive and

on points. [applause] schnell after 9/11 -- [laughter] not so good. confused. now, look at this. i love this photo. we are ready to take on the world. i had my team of experts use the latest computer technology to predict what michelle and i will look at the end of my -- will look like at the end of my first term. [laughter] [applause] but -- despite all that, at the halfway point in the most

historic presidency in the history of united states, i have two words for each and everyone of you -- you are welcome. [laughter] you are welcome for the thriving economy and helped create. [laughter] your welcome for the peaceful relations in the middle east that i helped to forge. and you're welcome for the gift of humility which i have given to anthony wiener. [laughter] that's right. i may have given him the gift of humility but you pay for that too little tell. [laughter] --cute little towel. i was never a fan of winner. weiner.

i released my long-term birth certificate. he releases long form twitter photo. [laughter] i must say that the state of our union is not good. the debt is rapidly growing, unemployment is quickly rising, and people are being forced from their homes. i feel their pain because in two years that could be made. [applause] be me. [applause] settle down. that's enough out of you. [laughter] now, i was criticized for joking about shovel ready to up to the other day. we need to build tunnels and

bridges. that way people would have something to live under or jump off of. [laughter] now, in a recent poll, only 15% of americans believe there will be a great depression. the bad news for me is the other 85% believe there will only be a very good depression. [laughter] i am proud to say that we are finding great strides -- making great strides in finding non- combat solutions to deal with moammar khaddafi. mahmoud ahmadinejad and kim jong il or as we refer to them in the situation room -- 2 and half men. [laughter]

isn't he cute? a little man. now, attorney general eric holder at my direction will be fighting the alabama controversial immigration bill that is even more extreme than arizona. it states that the police have probable cause to check anyone's immigration status if their complexion is greater than or equal to that of the john "the crybaby" behner. do you want to see my impression of john boehner? [crying] what do you think? i have been working on that for months. i don't know why that man cries so much.

let me be clear -- i am against any state interfering with federal immigration law. shortly after arizona passed its bill, i received a letter that said mr. president -- i was born in this country. i get up early every day. i worked extremely hard supported my wife and kids and still the police stop me in question my intentions. i don't think senator mccain should be treated that way. [laughter] or do i? i am proud of all that of listening to the attacks from my opponent and the right-wing media, you would think i have not gotten anything done. it is true harry truman once said. if you want a friend in washington, get a dog.

so i did. his name as beau. he is a good boy. actually his full name is bo diddley. bo comes from my new initials and did late is what i got from fox news. [laughter] [applause] he sleeps in his dachau's every night out there in the rose garden. it is not a new doghouse. i am told that bill clinton slept in it a lot. [laughter] perhaps my expectations were too high when i took this job. as you can recall, my slogan was "yes, we can." i have to admit that thought we could. apparently, no, we can't.

[applause] in front of you all here today this afternoon, i am unveiling a new slogan ♪ "i killed oasma. what do you think? it wasn'tgeorge bush, dick cheney, it was made. i did that for you. i think that is a cool slogan. [laughter] you right wingers should be proud of me because the mission to capture bin laden was not only successful because i killed him, but also, in cooperation with two of my bigger liberal supporters prove that you were correct after all. torture does work.

[laughter] who would have thought? the economy is frail. it is barely moving. it is gasping for air. it is desperately clinging to life. just like newt gingrich's campaign. [boo] come on. he is in serious trouble. his consultants are dropping faster than anthony wiener's and sent aol chat room. [laughter] speaking of candidates, a little birdie told me that you are all

looking for someone to challenge me in 2012. [applause] really? how's that going for you? ok. let's see -- you have your front runner, and mitt romney. -- he might wrong make a great president along with his first lady, second lady, third lady [boo] that tim unfortunate pawlenti could not make it here but cut him some slack. he is having his foot surgically removed from his mouth. don't worry, luckily for him, it is covered under obamneycare. [laughter] the along with the final transplants. [boo]

come on. john king served him of a softball softer than bernie king's backside. because of him, people are asking me when will explain the details of my health care plan. i have three words for you -- so am i.. [laughter] now the donald -- remember him? he chose not to run as a republican but he is now threatening to run as an independent. the only thing running independent of donald trump is his hair. [laughter] we've got michelle bachmann. [cheers and applause]

what can i say about michelle bachmann that she has not already set about herself? the other day, she called me a one-term president. [applause] [no audio] i gotta go. god bless you. god bless the united states. god bless america, thank you, thank you. >> retired lieutenant colonel steve russell commanded the u.s. army unit the captured saddam hussein spoke to the conference for just over 10 minutes.

>> i am steve russell. i had the privilege to command a task force of 1000 soldiers that was involved with the hunt and capture of saddam hussein. [applause] [cheers and applause] >> thank you. among the soldiers that were serving with this that night was ian weichel and mark pain.

ian was part of the reon troop on two forms that were targeted. makr pain coroneted information for a battle captain. little did these two soldiers know that when they were roommates at west point that that would both be a part of the forces that made history that night. returning to iraq with the same brigade about 50 months later but now each of them in command of their own companies,ian was killed in action leading his troops in april of 2006. those of us that serve with him pay their respects as he was laid to rest in arlington national cemetery. six months later, after suffering a concussion and ignoring those injuries, mark pain led his troops and a combat operation where he was also killed by enemy fire in october

of 2006. i made another trip to the arlington national cemetery to pay my respects to yet another friend. at the burial, if you have been to the cemetery, they lay casualties in the order they are received. we noticed that when we bear mark that he was laid at the feet ian weichel. roomettes at the academy, best friends in battle, and now together in life and death. after the burial, wandered around the nation's capital trying to mentally process a great number of things. politicians on both sides of the aisle, there chest about hopelessness of our service. and our mission. everywhere i turn, there is melancholy prophecy about how the war in iraq was lost.

i decided to visit the national air and space museum for distraction while waiting for my plane to go out the next morning. as i walked in, i noticed that there was best the wright flyer. as i walked around the rotunda of it and looked at how it was built, i noticed that there were the naysayers, the people that said it could never fly. upon examination, it was hard to believe that a tangle of canvas and would such as this actually was struggled into the air. coming out from this exhibit,sturdier looking craft -- i noticed a sturdier looking craft and it had no forward- looking window, just a four- looking pilot. you could still care the naysayers saying that you will die like all the others. you'll never get off the ground

with the wake of all the desolate. you never stay awake. you can't do it alone. rounding the corner to examine spacecraft, i was struck by the apollo 18 lunar module and wondered how a substance that looked like aluminum foil could support life in outer space. how was it that we found americans foolish enough to believe that you could be strapped onto a rocket of 2000 metric tons that would break apart by design and hurl you into space because of someone's mathematical calculations, you would be launched toward the moment and because of the theory of gravity, you would be pulled their as you got there and the last remaining sections would break apart yet again and join and find one another and astronauts could crawl through it and then they would land a on amoon, plant a flag, pop back up

and find the craft and joint back together, crawled back in and sling shot back to earth. and that is the case that thousands of miles per hour and would slow down as they get the fire atmosphere -- we put little asbestos plates in the bottom to protect them -- if you come through at hundreds of miles an hour, parishes will deploy a new land in the pacific ocean and a helicopter will come and find you. [laughter] yet, that is exactly what we americans achieved in this country. [applause] to read the headlines of the day, you would hear this -- what about the poor? what about the war on poverty? what about the things that really matter in the country? as i look at it, i wonder how different the world would be today without orgel right,

charles lindbergh, and neil armstrong. as i re-entered the gloomy mood outside the nation's capital, i left inspired because adorned on me that america has never been built on the labour and hard work of the senate and the credit. -- and a critic [applause] cynics and critics -- soldiers of this generation had a bill -- bellyful of them. every monumental mission our nation as a test of our men and women in uniform has been accomplished. overthrew the taliban government -- done. kill or capture osama bin laden -- the. defeat the saddam hussein army -- done. kill or capture saddam hussein -- done. [applause]

week, the soldiers, have done that with the obstructions of liberals, cynics and critics telling us it was some big mistake. nonsense. [applause] what can we learn from america's current or veterans. there are still things worth fighting for. [applause] america has not been built on the labour and hard work of the senate and the critic. there are still americans today that know how to sacrifice. there are still americans that the difference between what is evil and what is good, who is a threat and was harmless, whether to live free or quit on this country and. die

thank god america still has men and women such as you today who still believe this as well. americans need to sacrifice along with their soldiers. sacrificed doubt. sacrifice anxiety. sacrifice cynicism. as visionary as we republicans claim to be, we will make little headway if our only answers are mere sideline snipes that what is wrong with this country. our task is to show the american people what is right with the united states of america. [applause] it is time to ignore that senate and get to work.

-- the senate and get to work. -- the cynic and get to work. you stay on mission until it is accomplished. if we want to honor those who will never come home and never know the joys of marriage and raising children, who will never live in the freedoms that their sacrifice purchased, we must honor it by restoring the country that they died for. [applause] i believe the sum total of our laws is how we invest in a. other people week, the people, the defenders of this great nation, have a responsibility to serve our god, our country, and also give of our talents and efforts to preserve what is the dream of the american way of life. may you be such leaders and as

we face the wind that look to the future, we will always have the naysayers, those around us who take counsel of their fear. as we endeavor to take risk and lead and achieve, we have to ignore their calls saying it will never fly. keep the faith, don't quit, god bless you all. [applause] [applause] >> texas governor rick perry spoke saturday on the final day of the 2011 republican leadership conference in new orleans. the three-day conference brought republicans from around the country to listen to

conservative officials and candidates and celebrate the 100 birthday of [inaudible] rick perry spoke for about 20 minutes. >>[applause] >> there is a party in new orleans. let me take a moment and say thank you to joe domino. he slipped across the border and i asked if they checked him. b fromeaumont. it is awesome to be in louisiana, home of what i consider the really great governors, a dear friend of mine, a republican, bobby jindal. [applause] everywhere you look in this state, you see the evidence of his leadership. this guy is a real competitor. he is a winner. bobbie, want to leave you with

one thing -- leave our football players alone across the board, all right? get me some professional courtesy. don't take them all. on a serious note, the governor showing that folks conservative principles are not just sensible but they are truly compassionate. they are truly affected. flying into new orleans this morning, one can help to reflect -- we were thinking about the destruction that visited this city when hurricane katrina came through. there is just as amazing story of the human spirit that has given this town back its vitality and it's a feeling. this place is thriving again. there has been a lot of talk in this town and across the country about the government's

responsibility in a recovery for a disaster government certainly has a very important role to play. the real recovery comes as a result of individuals taking ownership and doing the hard work and making things happen. [applause] unfortunately, this administration in washington has clearly believes that government is not only the answer to every need but it is the most qualified to make essential decisions for every american in every area. that makes it arrogance and audacity that guides the obama administration is an affront to every freedom loving american and a threat to every private sector job in this country. [applause] whether they are seeking to punish a company like bowling

that wants to go into south carolina, they are pressuring company leadership in laboratories in new york, imposing epa mandates that will kill jobs right here in louisiana -- they clearly think that they know best. let me tell you -- i vehemently disagree. they don't know best. [applause] i happen to believe that our nation was built on the shoulders of working people, folks who reached our shores in search of religious and economic freedom. they and the generations that followed embraced the risk and reward a. freedom they tilled the land and build a factor. they pursued innovation and they helped create a nation on like any that the earth has ever

seen. unfortunately, the liberty that inspired our fledgling nation 2 per of the chains of oppression, a nation that has been a magnet for immigrants all over the years, has been the essence of the american dream, it is being constricted daily by new regulations, obligations that seek to empower government, not the people. we now live in this strange, inverted version of our founding fathers'' vision in which government of the people, by the people, for the people is little more than this outdated notion, not very welcome in today's washington. instead, we have the so-called leaders who ramrod up on red health care legislation through the system without revealing the

true cause or admitting it will ultimately make the federal government the sole arbitrator and administer a. healthcare instead, we have these so- called leaders who would rather poor bail out money on companies that are too big to fail than make changes that would free up small businesses to create real jobs and real wealth. instead, we have entitlement culture in our nation that dictates government spending based on what bureaucrats think they deserve rather than what the people can afford. do you really believe this is what our founding fathers had in mind? [no] writings, of their riding the risks they took in the name of freedom for the generations of americans who shared those ideals, i begin to wonder what

will our legacy be? will history view us as the generation of americans that kind of collectively shrugged their shoulders and said i guess there's nothing i can do? will we watch our nation continue this slow backward slide? will future generations of americans living a life without any direction or decision that is not made by some bureaucrat wonder, "why didn't somebody do something?" i've got more confidence in america's energy and character. i totally believe it is time to reconnect with the greatest attributes of our nation, to regain their resilience. , recapture that love of freedom, remembering its troop. pric