and the costs of a default are not being considered nearly enough. the costs of a default, of interest rates going up, of having to do backpay, having to correct some of the many issues that we will face by having some of the people who are owed money not paid and having to pay interest and extra interest if we are in deflt. we cannot allow that to happen. i think we all agree on that. and we are all troubled with the delay in resolvinghis issue. the delay i think has been caused for many reasons. of course, our fundamental differences are one, but i believe that although members of congress and leaders in congress have been talking for a long time, i think the president did

not get involved until just two weeks or so ago and has never put forward a real plan and then talked to members of congress one-on-one about having his plan or some iteration of his plan go forward. now, the senate majoty leader and the house speaker have put forward plans. i believe that there is a common ground that c be found between these two proposals, but they are not the same. in fact, i think the republican leader in the senate has also put forward a plan and i think we're seeing the different pies of the plans that he been put forward now starting to come together. i believe the boehner plan is a good one. i believed in the cut, cap and balance plan, where you cut spending now to make your down payment, you cap spending every year for the next ten years at a

level that brings down the overall deficit, and you sd a balanced budget to the states for ratification. i feel so certain if we could pass a balanced budget from this congress and send it to the states, it would be ratified and it would put us on the real course for fiscal responsibili responsibility. the course that would assure that social security is sound, that medicare works, and that our children and grandchildren will not inherit a debilitating debt that hurts our economy. so i do believe that cut, cap and balance was the right way forward. but, mr. president, congress is split. we have a majority of democrats in the senate and republicans in the house. therefore, we are not going to get everything that any one of

us believes is right and certainly we're not going to get the boehner plan in the senate. but it is the right approachnd we will have to take a few steps at a time and i hope that we will be able to come to terms on that way forward with the principles of cug spending, putting a cap on spending -- of cutting spending, putting a cap on spending and not raising the debt ceiling any more than the cuts that can be counted. and that's what is a concern to me about the reid plan. senator reid is calling for $2.7 trillion in an yeast in the debt ceiling. the purpose, as the president has stated, is to get through the next election in 2012 and not deal with this again. but, mr. president, the next election should not be the

focus. the focus should be, how do we show that our country is on the right track to get this enormous debt whittled down. by whittling down the deficits and having sound budget principles. this $2.7 trillion would be the largest debt ceiling increase in the history of america. the previous largest debt limit increase was $1.9 trillion which president obama signed into law in february of last year. this debt ceiling increase in senator reid's proposal is not paid for. it offers $1 trillion i cuts for a $2.7 trillion increase. many of those cuts are illusory. they are not cuts that can be counted.

to say that we're going to label $1 trillion of cuts savings from leaving afghanistan and iraq is just not credible. we don't know what the obstacles are going to be in afghanistan and possibly iraq. we also don't know what we might have to do in the middle east going forward. afghanistan is not settled, mr. president, and we have to have a certain level of stability on the ground in afghanistan or we will have wasted the billions that we have already spent and the lives of our military personnel in afghanistan because it will go back to the way it was before, a center for terrorism that will comeo our country or can come to our country.

it did once already and we have been over there to try to wipe out al qaeda and the taliban, which has been in league with al qaeda. we have been over there losing american lives and spending american taxpayer dollars to protect our country from another 9/11. to say that we're going to c $1 trillion in the future over the next ten years when we aren't placing the emphasis on what are the conditions on the ground is not sound policy and it's certainly not sound national security policy. so that's illusy. and then the other parts of the cuts that i think are very hard to decipher are cutting waste, fraud and abuse, which we all want t do, but we don't have the guarantee of those cuts.

so i think it is important for us to look at the cuts and try to make sure that if we're going to raise the debt ceiling, we raise it only the amount ofhe actual cuts that we can produce. in the majority leader's -- majority leader reid's legislation, there is a joint committee. there is also one in the boehner bill. but in the majority leader's legislation, the committee has to report but its product doesn't have to be passed and enacted before the debt ceiling is lifted. now, that'she real problem in senator reid's proposal. the bill would lose its expedited status and the joint committee would dissolve on january the 13th of 2012 under senator reid's proposal and then

we would still have the lifting of the debt ceiling that has already been enacted. that is not the way to go forward. the joint committee proposed in the boehner plan is forced to produce savings, and the forcing mechanism in this case is the fact that the debt limit can't be increased unless the cuts are enacted. so you will keep the governor on the debt increase by assuring that there have to be cuts in spending dollar-for-dollar. and, third, there is no balanced budget amendment included in the reid proposal, and, in fact, there's no reqrement that we even vote on a balanced budget amendment. now, i know that it would be very difficult to pass a balanced budget amendment right now out of congress. but i do believe it is the best thing we could do for the long-term security of our country. so i would hope that, as we come

together -- because we know the reality here; the reid bill is not going to pass the house and the boehner bill is not going to pass the senate exactly -- so we've got to come together with a plan. maybe it's a short-term pla that just has a dollar-for-dollar cut along with the raising of the debt ceiling, or maybe we can get more after we dispatch with the two bills that are now before the congress and try to put something togeer that has the best parts of both. i could not support the reid plan, as it is today, and i do support the boehner plan, but i also know that neither of them is going to pass the other house. so i think it is incumbent on us to now go forward, and let's

quickly start doing the work that could produce results, and that is to try to get the best of both of these before the august 2 deadline. and i think we've got to be open to what can work that stays within the principles of no tax increases and no debt ceiling increase without the same amount of dollars, at least, to be cut from spending, with real cuts that can be assured. i think the american public is looking not for promises but for the assurance in the law that will not be able to raise the debt ceiling without some cutting of spending and reforms that would equal the amount that the debt ceiling is increased. we can go forward, mr. president, with those principles which i think both sides would agree to at this

final few hours that we have before that debt ceil sothing reached. but it is time -- before that debt ceiling is reached. but it is time to vote on these bills and then get down to the real work of determining what is the best in both that we can pass in both proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. conrad: mr. president, we are now reaching a critical hour in the congress of the united states on the question of extending the debt limit of the nation and of fundamentally dealing with the debt of the nation. i don't think there is any serious person in either body that does not understand that we must deal with the debt itself as we extend the debt limit. we are borrowing 40 cents of

every dollar that we spend. the gross debt of the united states will reach 100% of our g.d.p. by the end of this year. the best economists in the country of whatever philosophical stripe are telling us we're on an unsustainable course that must be changed. mr. president, in the midst of this, we have had the house so far unable to send us a package. now we're told they do have the votes because they have added a balanced budget to the constitution as part of their package. mr. president, the balanced budget that they have previously proposed in the house of representatives can never pass the united states senate, at least as this body is currently

constituted. and it should not pass this body. it is deeply flawed. and to attach that to a measure that has to pass both houses before tuesday of next week frankly is an indication of a lack of seriousness on the part of our colleagues in the house of representatives. ultimately, there has to be a bipartisan agreement. our friends in the other party control the house of representatives. the senate is controlled by my party, the democratic party. we have a democrat in the white house. no serious person can fail to understand that putting a -- an amendment to the constitution of

the united states that is deeply flawed into that package absolutely guarantees that it cannot pass in this chamber. that would take a two-thirds vote. i don't believe it would even command a simple majority here, much less a two-thirds vote. so here we are at the 11th hour and people in the other body seemingly are still not serious about coping with the challenge of both extending the debt limit to avoid a default which would be catastrophic and of dealing with the debt itself. mr. president, i understand ideological rigidity.

the time for that is past. the time now is to work together in some reasonable way so that we advance legislation that both extends the debt limit to avoid the catastrophic consequences of a default and to deal with the debt threat itself. mr. president, "the new york times" on wednesday had this story." on all levels of the economy, concern about the impasse." what they were talking about is the rating agencies saying if we don't do both, if we don't extend the debt limit and deal effectively with the debt itself, they're going to downgrade the rating of our credit as a country. mr. president, the story goes on to say -- "economists and analysts are trying to gauge the cost to the economy and the

consumers. if the united states loses its solid gold credit rating, a move that appears more likely now that the standoff in washington over government spending has calcified. some economists say the effects of lowering the federal government's credit rating to aa from aaa can be measured in the billions of dollars, in increased borrowing costs for the government and in the billions more that consumers, corporations, states and municipalities will have to pay for their credit. it also could erode consumer and business confidence, slowing even further the economy and job creation." mr. president, it's started already. we have just learned the latest numbers on economic growth. they are a tepid 1.3%. mr. president, this uncertainty being created here by a failure to deal with our debt and with

an extension of the debt limit are creating a head wind for our economy. reducing economic growth, slowing job creation, costing us a stronger recovery. mr. president, i want to remind colleagues, for every one percentage point increase in interest rates, that adds adds $1.3 trillion to the debt. so kicking this can down the road, not facing up to it has enormous consequences. $1.3 trillion added debt for every 1% increase in interest rates, this is just the effect on the federal government. trillions more would be the effect on consumers, on companies, on other levels of government with an increase in interest rates. mr. president, when we see the

proposal by the speaker that apparently the house is now prepared to send us, it has fatal flaws, and here they are. first of all, it would repeat the default crisis in just six months. that would continue the uncertainty and put the economy at further risk. our friends on the other side have repeatedly said how uncertainty is hurting this economy, and now they want to create themselves more uncertainty. it makes no sense. mr. president, the boehner plan includes significantly less deficit reduction than does the reid plan. the boehner plan, as i understand it, has not been able to calculate its newest version

fully. it was in the range of of $1 trillion of savings. majority leader reid's plan is well over $2 trillion of savings. third, the boehner plan provides no firewall between security and nonsecurity spending. that means even deeper cuts on the domestic side of the ledger because we all know what happens if you don't have a firewall. and finally, it requires an irresponsible balanced budget approach that has been clearly rejected here and will be reject ed again. that's certain. mr. president, standard and poor's has warned against repeat ed debt ceiling debates. here's what they have said on july 26. "we would be concerned if we thought the debt ceiling debate

would come back and be open and we'd have to go through all this again and again and again. that would be negative in our view." mr. president, this is the rating agency that determines what the interest rates will be on the debt of our country. not directly but indirectly, because if they write down our creditworthiness, that will increase interest rates. so they are sending us a very clear signal, don't do the speaker boehner plan that has only a six-month extension and repeat this whole process and create more uncertainty and put the economy further at risk. to avoid a u.s. credit rating downgrade, the s&p wants to see a bipartisan debt reduction effort. not the totally partisan approach that speaker boehner

has for the moment chosen to pursue. mr. president, i don't know what could be more clear. the other body is in the control of our friends in the other party. this body is in control of the democrats. at the end of the day, we have to come together. we have to work together. now, i have been part of two efforts to work together. last year, the fiscal commission, 18 of us given the responsibility to come up with a plan to get our debt under control. at the end of the day, 11 of the 18 agreed on a plan. five democrats, five republicans and one independent. fully bipartisan. i was proud to be part of the 11 that agreed to that plan. this year, i have been part of the group of six, three democrats, three republicans that were asked by about 30 of

our colleagues to see if we could find a way to implement the findings of the commission, because for the commission's findings to be implemented, they had to have a super, supermajority. they had to have 14 of the 18 agree. and even though we had 11 of 18, it wasn't enough. so about 30 senators met at the beginning of this year, the end of last and asked a group of us six, three democrats, three republicans, to see if we could come up with a bipartisan plan. we have worked all year, hundreds of hours, and we have agreed. we have laid out a plan for our colleagues. it is the only bipartisan plan before either chamber. mr. president, speaker boehner at this late hour is still pursuing a plan only on the republican side of the aisle and

only in one chamber. that can't possibly be a recipe for success. mr. president, david beers, standard and poor's global head of sovereign ratings said this on july 26 -- "we will measure the deal on a number of parameters. one is is it credible? and correct, among other things, means to us there has to be some buy-in across the political divide, across both parties, because politics can and will change going forward. and if there's ownership by both sides of the program, then that would give us more confidence. it's not just about the number. it's about the all-in intent." mr. president, are our colleagues listening? the solution cannot be found on

just one side of the aisle in one chamber. this is going to require bipartisan, bicameral cooperation. we're going to have to act like adults. not like kids in a school yard pointing fingers, spreading rumors, spreading blame. that will not lead to success. mr. president, here's the circumstance we face. the red line is the spending line of the united states going back 60 years. the green line is the revenue line of the united states going back 60 years. and what you can see, the revenue of the united states as a share of our national income is the lowest it has been in 60 years. spending as a share of our national income is the highest

it has been in 60 years. revenue is the lowest, spending is the highest. that's why we have record deficits. mr. president, clearly you have to work both sides of the equation to get a solution. some of our friends on the other side are saying don't touch revenue. some of our friends on both sides are saying ah, and don't touch entitlements. don't touch medicare, don't touch social security, don't touch medicaid. mr. president, if you can't touch revenue and you can't touch the entitlements, you can't solve the problem. by definition. when you're borrowing 40 cents of every dollar and you exclude all revenue -- that's half the equation -- and you exclude 60% of federal spending, if you eliminated all the rest of federal spending, every dime for defense, for nondefense

discretionary, if you eliminated every dime, you wouldn't solve the problem. mr. president, at some point here we've got to get serious and real with the american people. the balanced budget amendment that our colleagues in the house sent us previously that's already been rejected here once, now they're putting in the package to send us here again at the 11th hour, a balanced budget amendment that is as deeply flawed as any amendment that i have seen in 25 years in this chamber. let me review what our friends on the other side sent us in a balanced budget amendment that was rejected here just in the last few weeks. it would restrict the ability to respond to economic downturns. meaning you would compound the

decline. that's bad economics, and it's not going to pass. number two, it uses social security funds to calculate balance, and subjects that program to the same cuts as other federal spending. even though social security has its own trust fund and is separately funded. number three, it shifts the ultimate decisions on budgeting to unelected and unaccountable judges. and fourth, it requires a state ratification process that could take years to complete. we don't have years to wait for a state ratification process for a constitutional amendment. we need to make these spending and revenue decisions ourselves

and do it now. it's our responsibility. let's not be waiting for the states to ratify a constitutional amendment before we take the action that is necessary. mr. president, the balanced budget amendment that the house previously sent us has the risk of turning a recession into a depression. why do i say that? because there is no provision in the amendment that they sent us for an economic downturn as being an exemption from the balanced budget requirement. that is hoover economics all over again. how many times do we have to learn the harsh lesson that when we are in an economic free fall, the only entity big enough to pull us out is the

collective organization of our government? that is the only place that has the muscle to prevent a recession from turning into a depression, and the balanced budget amendment our colleagues cept us before would absolutely lock down the federal government's ability to respond. that would be a profound mistake, and contradict all we have learned in economics since the great depression. this is what norm ann ornstein at the american enterprise institute said about this constitutional amendment. he called it 5, quote, "really dumb idea." this is what he said. "few ideas are more seductive on the surface and more destructive in reality than a balanced budget amendment. here's why -- nearly all of our

states have balanced budget requirements. that means when the economy slows, states are forced to raise taxes or slash spending at just the wrong time, providing a fiscal drag when what is needed is countercyclical policy to stimulate the economy. in fact, the fiscal drag from the states in 2009 and 2010 was barely countered by the federal stimulus plan. that meant the federal stimulus provided was nowhere near what was needed but far better than doing nothing. now, imagine that scenario with a federal drag instead." mr. president, "the washington post" wrote an editorial about the house balanced budget amendment headlined "a bad idea returns." rewriting the constitution is the wrong way to deal with the

debt. here's what they said in their editorial. "worse yet, the latest version would impose an absolute cap on spending as a share of the economy. it would prevent federal expenditures from exceeding 18% of the gross domestic product in any year. most unfortunately, the amendment lacks a clause letting the government exceed that limit to strengthen a struggling economy. no matter how shaky the state of the union, policymakers would be prevented from adopting emergency spending such as the extension of unemployment insurance, and other countercyclical expenses that have helped cushion the below of the current economic -- blow of the current economic downturn." mr. president, it doesn't stop there. this is what senator mccain said on the republican balanced budget amendment proposal on july 27. "what is amazing about this,

some members are believing we can pass a balanced budget amendment to the constitution in this body with its present representation and that is foolish. that is worse than foolish. that is deceiving many of our constituents. that is not fair to the american people to hold out and say we will not agreed to raising the debt limit until we pass a balanced budget amendment to the constitution. it is unfair. it is bizarro. maybe some people who have been in this body six or seven months or so believe that. others know better. it is time we listened to the markets. it's time we listened to our constituents. most of all, it's time we listened to the american people and sit down and seriously negotiate something." senator mccain had it exactly right. sending us a deeply flawed balanced budget amendment to the

constitution of the united states at the 11th hour is not designed to achieve a result. it is achieved, it is designed to achieve a headline. a bumper sticker slogan that will not help us solve the problem. mr. president, here's what a top economic adviser to former president reagan said about the house balanced budget amendment. he said and i quote, "-- this is bruce bartlett a former reagan administration top economic adviseor. and i quote him. "i have previously explained the idiocy of right-wing advocates of a balanced budget amendment. however, the new republican balanced budget proposal is especially dimwitted. in short, this is quite possibly the stupidest constitutional amendment i think i have ever seen. it looks like it was drafted by

a couple of interns on the back of a napkin. every senator co-sponsoring this balanced budget amendment should be ashamed of themselves." that is from a former top economic advisor to ronald reagan. is anybody listening? is anybody paying attention to how far off base things have slipped in the other body, to send us at this moment, at this critical juncture a plan that has absolutely no chance of passing in this body, and should not? mr. president, what is so deeply flawed? in addition to the other points i've made, the balanced budget amendment that the house republicans cept us earlier -- sent us earlier set a spending cap of 18% of g.d.p.

well, let's add up what that would mean. you can see here social security is the red band. that's about 5% of g.d.p. if you add defense and all other nonhealth care spending that takes you up to about 16.5% of g.d.p. interest on the debt takes you to over 18% of g.d.p. you notice what's missing here? medicare. in the republican plan, that they sent to us, with a spending cap of 18% of g.d.p., if you fund social security, if you fund defense and other -- and other non-health spending, and you fund interest on the debt, there's no money left.

there's no money for medicare. there's no money for medicaid. there is no money for any health care spending. mr. president, that's what the house of representatives sent us just in the last several weeks as a balanced budget amendment to the constitution of the united states. when some of our side called it cut, cap and kill medicare, they weren't kidding. because if you add it up, it doesn't add up. mr. president, not only that, the balanced budget amendment our colleagues in the house sent us just in the last few weeks also said it would take a

two-thirds vote to get any additional revenue, even though revenue is the lowest it has been in 60 years. they would apply a two-thirds requirement to get more revenue. really. so they would protect with a two-thirds vote requirement every tax scam, every off-shore tax haven, every tax shelter currently being used by some to avoid and evade the taxes they owe our country. i've shown this picture on the floor of the senate many times. this is a little building down in the cayman islands. a little five-story building that claims to be home to 18,857 companies. they all say this is their business headquarters.

i've said that's the most efficient building in the world. a little five-story building down there and it's the headquarters of 18,000 companies? anybody believe that? anybody believe that 18,000 companies are operating out of that little building down in the cayman islands? they're not operating their businesses out of there. they are engaged in a giant tax scam to make all the rest of us pick up their responsibilities. all of us who pay what we owe are getting stuck by the companies that are hiding out in this little building down in the cayman islands, avoiding the taxes that they owe our country. because there are no taxes down in the cayman islands so they operate out of this little building down there, five-story building, 18,000 companies. and they avoid paying the taxes

that they owe and stick all the rest of us with the responsibility. that's not right. and the constitutional amendment that our colleagues in the house of representatives sent us would protect that behind a wall of a two-thirds vote, which means you'd have an impossible time ever fixing this problem. it's hard to get a 60% vote around here, much less two-thirds. they would protect every off-shore tax haven, every abusive tax shelter, every unfair tax preference that's in the current code because they would require a 2/3 vote to change it. mr. president, that flawed amendment is not going to pass the united states senate. not now, not later this year, not next year, because it

itself would require a two-thirds vote. it is not going to happen.  so i'd say to our colleagues in the other chamber, sending us a totally partisan approach with a deeply flawed constitutional amendment is not going to work. it is not going to help solve the problem. and now is the final for us to join in a serious dialogue about solving the problem, solving the debt threat overhanging the country, which will require not a trillion-dollar package, as is in the house offering, but a $4 trillion package. the occupant of the chair well knows of what i speak. he was governor of west virginia and he dealt with a piss cal crisis in his state and he

guided his state through that crisis of the not just by operating on one side of the aisle, but by working together with people on both sides to come up with solutions. not political slogans. we are way beyond that. we are within days of a default on the debt of the united states that would have catastrophic consequences for the economy of our country. it's time. it's time, colleagues, to come together to do something that can pass, to deal, yes, with the debt limit but also to deal with the debt itself. it will be an empty gesture if we just extend the debt limit and we don't deal with the debt

itself. now, our leader, to his credit, has put something together that begins to take ideas from both sides of the aisle to try to resolve this crisis. it would save the nation from an immediate economic crisis. it would provide a significant down payment on deficit reduction -- more than $2 trillion -- and it would put in place a special joint congressional committee, equally divided, democrats and republicans, to find additional savings. and there is no new revenue in the plan. our friends on the other side have thus far said, at least in the house of representatives, they can accept no new revenue, none, not a penny. so our leader has said okay, i

don't like that but if that's your line in the sand for right now, we will accept it so that we can find a solution that both sides can support. no new revenue, more than a trillion dollars -- more than $2 trillion of spending cuts, and a special joint committee to come up with a plan to achieve even greater savings. that's a pretty good offer to the other side to say, we hear you, we want to work with you because we need a solution. mr. president, we're just days away from a true crisis, one that would be self-inflicted.

colleagues, let's not go there. let's come together. we've shown we can do it in the past. we need to do it now. not with blame, not with finger pointing but by saying this is a time to join together, to stand shoulder to shoulder to prevent irreparable damage being done to our country. i ask my colleagues, now, now is the time, this day we've got to find a way to come together. i thank theor whatever time i shall consume as if in morning business. the presiding officer: without objection. mr. inhofe: there is a simple reason we are talking about the debt limit increase and it's the fact this president has spent more money than i ever believed would be possible. so far he spent over $10 trillion in three years and

next year if he has his way will spend another $3.5 trillion. i remember so well in the clinton administration, i think it was 1995, i was outraged, i me down this to this podium and said can you believe a president has a budget of $1.5 trillion, and this president has spent $10 trillion in this short time. if he hadn't spent all this money we wouldn't be talking about a debtimit increase right now. i hate to sound so partisan about it but it's truly a partisan issue. the democrats have supported his spending and the republicans have not. the boehner plan that we're going to vote on, they're going to vote in the house today and i think we might have an opportunity to vote on here later on tonight, may not be perfect. none of the stuff around here is perfect but it is good and has dramatically improved over the last 12 hours. it allows the dt limit increase but only after we significantly cut spending. never before have we tied in the histy of this country a debt

limit increase to spending cuts. but it's something we have to do now and that we are so far into this mess. the first step of this plan cuts spending by over $900 billion in exchange for a $900 billion increase in debt limit. that will last the president to around february and i think it's a fair deal. i'd like to cut the spending more but we can only do so much when we only control the house. the second step of this plan is also good. it establishes a mechanism to quickly consider $1.8 trillion in additional spending cuts between now and the end of the year. it also requires congress to pass a balanced budget amendment to t constitution and accepted it to the states for ratification. this is something that just happened in the last 12 hours. people were talking about well, we really want to do something, a balanced budget amendment is the only way it's going to be good for now and for the future. and we've been talking about

this for many, many years. i remember so well way back in -- oh, the 1970's i was in the state senate in oklahoma when carl curtis, a wonderful gentleman from nebraska, he was a senator, had been a senator for quite some time, he was the perennial author of the balanced budget amendment but he never could get it through but he had an idea. he came to me in the state of oklahoma and he said you know, inhofe, we have been trying to get this balanced budget amendment for a long time and the excuse they use is you're never going to get the required number of states to ratify it. he said i've come up with an idea. we will get 3/4 of the states to preratify a balanced budget amendment to the constitution. to the constitution. that's kind of an ingenious thing. why don't you be the first state? so i did and we passed by resolution in my state of oklahoma in 1975 i believe it was a ratification of a balanced budget amendment to the constitution that didn't exist. that's kind of neat.

and we actually got up to almost three-fourths of the states and some of the other forces knocked it down. at's how long we've been doing this. there hasn't been one year that we talke about a balanced budget amendment that -- that -- that hasn't come up for discussion. well,his is probably the first time that it is a possibility. because we've never been in this spending situaon that we're in right now. as i said, $10 trillion in just three years. so right now, we -- we added that just in the last 12 hours and if that legislation passes, the president will get an additional debt limit increase so we're tying it to behavioral patterns and spending and austerity and it's a smart way too do it. this -- this proposal would keep the debt limit and spendingebate at the forefront of the national conversation. we must have this conversation. if we don't, we'll be worrying about things a lot worse than an increase in the debt limit. the president wants nothing to do with this. he just wants to -- a blank

check to increase the debt so he can continue to raise deficits. why do i think this? well, if we undid all of his policies today, the policies that so rapidly increased the spending and are killing our economy, then we wouldn't need a debt limit increase. the president's spending addiction is it only -- now, this is unilateral. this is the president of the united states. this was his budget, so it's not a group of people, it's him. and a lot of people are looking -- in washington say, don't any of them really care? well, there's one guy that doesn't and that's t president of the united states. his -- his action are what we're talking about today and we'll look at the failed policies. first, we have obamacare. there it is. obamacare. now, we're talking about a -- right now tryg to get something like $800 billion in all these negotiations so that we can increase the debt limit. in one fell sop, $1.5 trillion. his plan costs, over the current

decade, once it's fully implemented, the ten-year cost nearly doubles to $2.5 trillion. this law dramatically expands the government's influence and involvement in the health care sector and together with medicare and medicaid, it will result in the financial ruin of this great county. so that' -- of this great count. so that's $1.5 trillion. second, we have the failed stimulus plan. we all know that it dn't meet any of obama's eectations. of course, it clearly met all of mine. i didn't expect much. it didn't help the economy a bit. it only expanded the size of government. i can remember when we, down here, even though we were opposed to it, i'm among the most conservative members. senator boxer's a very proud liberal and she and i together tried to have an amendment to take some of the money, the $800 billion, and put it -- a large amount into infrastructure. right now we have to have roads and highways and bridges. that's what we're supposed to be doing up here. and, of course, they didn't do it. only 3% of the $800 billion went for that type of infrastructure.

over a trillion of this amount, once you add the costs -- that's thousand would get up to a trillion, the cost of interest that we have to pay for the practice spending. so that's a total now of $2.5 trillion. so you've got your stimulus, a trillion, your o obamacare, $1.5 trillion. then there's the president's relentless pursuit of regulation folegislation for regulation. whever the president hasn't been able to legislative accomplish, is he attempting to do it through regulation, most of it through the environmental protection agency. now, cap and trade is a good example. you know, we debated that since -- well, since the kyoto treaty was up and clearly the votes aren't there. righnow in this chamber, you wouldn't get 25 votes for a cap and trade. and yet everyone's talking about how the debt's important, we're going to have a cap and trade. so now he's trying to do it with -- through regulations. now, that alone would cost the american people $300 trillion to

$400 trillion a year. not just one shot. that's a year. he has his boiler mack legislation. that's maximum attainable issions -- maximum obtainable controlled technology. in other words, what can we do. what do we have the technology to do to stop the emissions? well, we don't have it. but he as that and, of course, that is billions of dollars a year. ozone regulations, i understand just -- he wasoing to announce this week a tightening of the ozone regulations that would put 608 of our counties in america out of attainment. i'm from the state of oklahoma, they put 15 of our counties out of attainment. that means in those counties, they can't recruit industries, they can't hire people. manufacture them would have to go out of business because of these ozone regulations. and it's not even in my opinion legal the way that he's doing it because he's supposed to be addressing it every five years.

and when he did it -- and when it was done in 2008, it was done new technology -- that's a requirement -- and yet today he's trying to do it using the same old 2008 technology. again, extremely expensive. it's cast a tremendous cloud over the uncertainty of the business sector and that's a key reason why it has announced today that the economy's only growing at a rate of 1.3% a year. that's terrible, especially when you consider the recession that we're in. generally, as a general rule, economies recover rapidly when coming off of a financial recession. it's not unusual for countries to grow at 4% and 5% and 6% for the years following a recession. but we can't even get around 2%. this has a huge negative effect on the economy and on the government. the president's regulatory agenda is the reason for our unemploymentate above 9% and it's the reason that our economy is growing so slowly. and because of this, ourax receipts are way off their historic levels. now, if we can get the economy to grow faster to sustain -- at

a sustained period of time, the effect on tax revenues is really unbelievable. i used to say -- a it's pretty well accepted -- that for a 1% increase in the economy, it -- it equals about $50 billion in new revenue. and that's the way to grow revenue. certainly president kennedy knew it. president reagan knew it. and so the best way to increase revenue is to -- is to get the economy moving again. and, of course, increase the -- the economy. if the economy grows at a rate of 1% faster than presently forecast for the next decade, then federal tax revenues would grow b nearly $trillion. and i conservatively estimate that the cost of federal revenues of the president's regulatory agenda has been a trillion dollars. so we have there, through his regulatory behavior, another trillion dollars. that brings our total to $3.5 trillion. then there's an increase in

nonsecurity discretionary spending which added up to $500 billion in spending. so we have now the cost of $500 billion and there's expanded and increased spending on unemployment benefits, which are also a consequence of his regulatory policiethat have killed the economy and its recovery. and the cost of that is another $500 bilon. so together, all these failed policies add up to $4.5 trillion contribution to the federal deficits. since inauguration day, the dealt hadebthas increased by $3. it's on pace to increase by more than $5 trillion by the end of the president's first term f. w- term. if we undid all of these failed policies, we wouldn't find ourselves in the situation we find ourselves in today. we wouldn't be here today debating this because it wouldn't be necessary. it isecause of the president that we are even talking about raising the debt ceiling today.

if we could undo the president's policies, we wouldn't need to raise the debt ceiling at all. and where's the president? he's been totally absent from this entire debt conversation. today he'seeting with a terrorist from cote d'ivoire and he's probably going to go and play golf in the afternoon. i don't know. but he doesn't -- he's not around here. he's not participating in this. he doesn't seem to care about debating the debt ceiling. he just wants to raise the deficits. if he did care, he'd see the need for the boehner plan, endorse it and sign it into law but i guess that's too much to ask. well, we're going to have a chance to do this tonight. we're going to have a vote over in the house on the boehner plan i think around 6:00. then it's going to come over here. we'll have an opportunity to do that. and if the democrats will support, just a handful of them, we would be able to get that passed. so we'll wait until tonight and see -- see what happens. the presiding officer: the senator from missouri.

ms. mccaskill: i try to listen very carefully to folks at home, and i would not quarrel with my friend from alabama in saying that it's very clear to me, it's been clear to me for a long time that missourians were very, very worried about spending in the federal government. in fact my friend from alabama and i started work on this before -- if you can say that we were trying to cut spending before cutting spending was cool, he and i were working these floor -- this floor for votes to try to do something about spending long before last november's election. mr. sessions: mr. president? ms. mccaskill: yes? mr. sessions: i thank the senator for recalling that event. i know that you've continued with another proposal, working across the aisle, to have a proposal that has potential to go do more -- be more effect think of -- be more effective

than the one we worked often last year. so i thank the senator for being willing to work in a way that could be effective to do better. ms. mccaskill: thank you. thank you, mr. president. and i thank my friend from alabama. there is nothing wrong with walking across the aisle and finding common ground and, frankly, it's kind of what i thought would be common when i came to the united states senate. that's kind of what i'd learned in the history books, that that would be common. i have been watching what has been developing knowing that my folks at home want us to cut spending. i certainly have been part of that and wanted to cut spending, and i watch this debt ceiling approach, and it is like watching a movie and watching a car driving along and you're like in a camera above it and you see what's ahead, and you see this cliff. and you see this car driving towards this cliff, and you're

thinking -- you start tensing and you think, oh, surely they're not going to go over the cliff. well, they have an opportunity to avoid going over the cliff. they're not going to go over the cliff. we're not going to see these people die, they're not going to drive over that live, they're not going to knowingly drive over a cliff. and i've been thinking for the last several weeks, well, there's no way that people that are elected because they love their country are going to let the car go over the cliff. and i got to till, i'm worried. now what do we have to do to keep from going over the cliff? make no mistake about it, it's a cliff. it is an historic moment for our country. never before in the history of our country have the world markets been worried about whether the united states of america will pay its bills. never has that happened before in our history. so what does it take? well, it's not complicate what had at that takes.

it takes one basic thing: compromise. to keep from going over the cliff, all we have to do is compromise. and i will tell you, reading my mail and listening to phone calls that have come in on the answering machine -- and i am going to take phone calls myself over the weekend -- you know what missourians are now saying? please don't go over the cliff. please compromise. i'm confident that's what most missourians want. and compromises have already occurred, big compromises. most of us on this side of the aisle really believe that the way we get at our long-term debt structure is a responsible approach that includes some revenues. now, i'm advocating cleaning out the goodies in the tax code so we can lower some tax rates.

i don't understand how you can at the same time vote to gut the medicare program and vote to continue writing checks to big oil. i cannot imagine that i would vote to keep writing a taxpayer check to the most wealthy and profitable corporations in the history of the world at the same time i was voting to put medicare on a voucher program. saying to seniors, you know, if you're 83 and you got three chronic illnesses and you run out of medicare coverage, you're on your own. i can't imagine doing that. but we compromised. we compromised and said, okay, we'll set revenues aside for now. you won't vote for revenues, republican party, members of the house in the republican party you'll not vote for revenues, we tack revenues off the table. so some people in our party were not happy with that. i got those phone calls. why did you capitulate, why did you give in? we gave in because we care about

our country and we don't want to go over the cliff. that's why we gave in. so we gave in on revenues. the republicans wanted us to cut spending by more than we raised the debt ceiling. it's a political thing we need to do, not required by the economics, but we've done that. so now we've put revenues aside, compromised, we have said we're going to cut spending by more than the rise in the debt ceiling. now the only thing we've not compromised on, the only thing, which i think is really when you think about it -- i didn't think frankly this may have been as big a deal until i stand here today, that is to do this again in six months, to leave this loaded gun on the table? we're going to leave this loaded gun on the table for our econo economy? when you talk to small businesses right now, and they are scared about what's going to happen next week. will they be able to borrow money? will people be able to afford to borrow money to buy cars? will they be able to afford to

buy borrow money to buy homes? you talk about the economy going into a tailspin and we want to keep that loaded gun on the table for another six months? there is no way we can provide the certainty in this kind of economic climate if we leave the loaded gun on the table. so the only thing that we've not agreed to that's in the boehner plan -- well, it depends on which plan it is; they keep changing it to try to get enough votes. but the only thing we are not going to budge on is saying to this country and our business community and job creators, we're going to kill job creation for sure for the next six months by telling you we want to repeat this ridiculous exercise in six months. we're not going to do that. and the irony is the people who want us to do that are the people who have been preaching certainty. we've got to have certainty. by the way, let's do this again in six months. we've got to have certainty. it's really important we do this again in six months. now, i know that the leader is working on trying to get a

compromise today and i'm confident that before the someday over there'll be some kind of compromise that will be before this body that we'll have a chance to vote on. and i will tell you this: you will never hear me brag about refusing to compromise. some of my colleagues from missouri that serve in the house of representatives are willing right now to brag about refusing to compromise. they're willing to say it's a good thing to go off the cliff. i will never brag about refusing to compromise. because i don't think that's what we do here. you look back on history and america's brightest moments usually happened around the table of compromise. those most difficult questions that this country has wrestled with through the years, we have forged our way forward through compromise. and that's what we need today. that's what we need tomorrow. that's what we need as we

approach the edge of the cliff. so my last message i leave my colleagues across the aisle: we have shown our willing ness to compromise. please though us yours. and allow us to vote, allow us to vote on the compromise. if you don't want to vote for the compromise, then don't vote for it. but allow us a chance to vote for it. is that too much to ask? just to allow us an opportunity to move to a vote, to avoid this country having a diminished status permanently in the world? i don't think that's too much to scvment so let us vote, and if you can't compromise on the substance of the compromises that will be put forward, at least allow our voices to be heard by allowing a vote.

thank you, mr. president. and i yield the floor. mr. president, i ask that the quorum cal >> senate has voted to block the john boehner debt ceiling bill. senators will be working on their own version of the debt ceiling bill this weekend, when offered by senate majority leader harry reid. but the house and senate will be in session through the weekend, working on a compromise bill. a obama administration officials say the deadline is tuesday, august 2. we will have live coverage of the house on c-span and the senate on c-span2. earlier in the day, president obama spoke to reporters about the debt ceiling issue. he said there are multiple ways to resolve the issues, but they have to be bipartisan and they have to happen fast. he urged democrats and

republicans in congress to come together on a plan he can sign. this is a little over five minutes. >> it does not solve the problem. it has no chance of becoming law. what is clear now is that any solution to avoid default must be bipartisan. it must have the support of both parties that were sent here to

represent the american people. not just one faction. it will have to have the support of both the house and the senate. there are multiple ways to resolve this problem. senator harry reid, a democrat, has introduced a plan in the senate that contains cuts agreed upon by both parties. senator mitch mcconnell, a republican, offered a solution that can get us through this. there are plenty of modifications we can make to either of these plants in order to get them passed through both the house and the senate's and it would allow me to sign them into law. today i urge democrats and republicans in the senate to find common ground on the plan to give support to, a plan icahn side by tuesday. this is not a situation where the two parties are miles apart. we are in rough agreement about how much spending can be cut responsibly as a purse step

towards reducing our deficit. we agree on a process where the next step is a debate in the coming months on tax reform and entitlement reform. i am ready and willing to have that debate. we need to put in place some kind of enforcement mechanism to hold us all accountable for making these reforms. i will support that if it is done in a smart and balanced way. there are plenty of ways out of this mess. but we are almost out of time. we need to reach a compromise by two state so that our country will have the ability to pay its bills on time as we always have. but the social security checks, veterans benefits, and the government contracts we have signed with thousands of businesses. keep in mind, if we do not do that, we could lose our aaa credit rating. not because we did not have the capacity to pay our bills, we do. but because we did not have the triple-a political system to

match our aaa credit rating. make no mistake, for those who say they oppose tax increases on anyone, a lower credit rating would result potentially in a tax increase on everyone in the form of higher interest rates on their mortgages, car loans, and credit cards. that is inexcusable. there are a lot of crises in the world that we cannot predict or ovoid -- hurricanes, earthquakes, tornadoes, terrorist attacks. this is not one of those crises. the power to solve this is in our hands. one a day where we have been reminded how fragile the economy already is, this is one burden we can lift ourselves. we can end it with a simple vote -- a vote democrats and republicans have been taking for decades. a vote that the leaders in congress have taken four decades. it is not a vote that allows

congress to spend more money. raising the debt ceiling simply gives us the ability to pay the bills that congress has already racked up. i want to emphasize that. the debt ceiling does not determine how much more money we can spend, it's simply authorizes us to pay the bills we already have racked up. it gives the united states of america the ability to keep its word. monday night i asked the american people to make their voices heard in this debate. the response was overwhelming. to all the american people, please keep it up. if you want to see a bipartisan compromise, a bill that can pass both houses of congress that i can sign, let your members of congress no. make a phone call, send an e- mail, tweet, keep the pressure on washington so we can pass this. for my part, my administration will continue to work with democrats and republicans all

weekend long until we find a solution. the time for putting party first is over. the time for compromise on behalf of the american people is now. i am confident that we can solve this problem. i am, the net that we will solve this problem. for all the intrigue at all the drama taking place on capitol hill right now, i am confident that common sense and cooler heads will prevail. as i said earlier, we are now running out of time. it is important for everybody to step up and showed the emirate -- should the leadership the american people expect. thank you. >> world bank president, robert zoellick, says congress is "playing with fire on the debt limit." mr. zoellick served as trade representative under george w. bush. he spoke at an event hosted by the society for international development, which has chapters

in over 65 countries. this is about 45 minutes. >> it is a sincere privilege for me to introduce a conversation between two people i very much admire. michael gerston is a former speech writer for george w. bush and is not a syndicated columnist for the washington post. he has been a clear voice for development over a long period of time. i was one of millions of inspired on many occasions by michael's thoughts and words, including the 2005 inaugural speech piper that bush. i have also bought and recommended both of michael's books, most recently, "city of man.: it is about the role of people of faith in the public square.

compelling and interesting. the conversation is also going to be enforced by the fact that michael is part of what he described as a humanitarian conspiracy. he was one of the architects for the initiative that has saved millions of lives. i would turn the floor over now to michael gerston. >> it is an honor to be with all of you and an honor to be with robert zoellick. i get our former allies, bob and i were colleagues. i deeply admire his leadership at the bank. he is a voice for economic sanity and a voice for the world's poorest people.

let me start with a question. what are the -- what a fax is the debt limit having on the global economy, leadership, and the u.s. political system? >> as i try to think about that answer, let me just start -- might was kind enough to talk about some of our work together. my budget career is a wonderful example for those of you who wonder about speech writers. it probably is not generally known, but it should be, that issues such as aids, malaria, sudan -- "our common challenge: a world moving towards a sustainable future" -- michael gerston was a constant driving

many of these issues. i expect many people had these positions and they take the day today, but they do not go home at night and ask what legacy they will leave. this is something that was very contrary to his view of public service. he served the american people extremely well in addition to being a great writer. >> i appreciate that, but you cannot avoid the question. [laughter] >> as with many events like this, i think there is a short- term and, maybe, a bigger perspective. on the short-term perspective people are playing with fire. the world bank is a pretty big financial institution. we operate all across the world.

we and, any other -- we and any other financial institution is coming up with a series of contingency plans, not just the first, but the second and third order effects. this is taking place in a context where you still had the result in serious difficulties. they have put together a package, but it is a long process japan, which has been struggling with growth for a long period time, had a terrible, natural calamity. you have an environment that was already fragile and uncertain coming out of the financial crisis, which many of you know was before the food and fuel crisis. in any barbette with the tools people used in 2008 -- in an environment with the tools people used in 2008, they had basically run their course. this is a context in which

whatever 1's logic about the tactics, it is a very dangerous environment. to be blunt, to have a debt default in the united states would not only be a financial calamity, but it should be an embarrassment for america. but there is a medium and long term that i spent time reflecting on because the bank has 187 shareholders, but our clients are primarily developing countries -- emerging markets. what is striking is we are in an debarment with the nature of the recovery from crisis -- in an environment with the nature of the recovery from crisis. the challenge is now one where the growth has recovered so well the danger is more overeating or asset-priced bubbles. the developing countries are struggling with spending, debt, and large-scale unemployment.

this creates a tension in the international system. one thinks about the world bank -- it came out of the end of world war ii where people were tried to learn the lessons of economical -- economic calamity. if you need some system that deals with trade, development, exchange rates, and capital flows. in a sense, the system is very much in a state of flux because the emerging markets represent half of global growth. in the '90s, it may have been 20%. this does happen relatively fast. the relevance of what is going on in washington, europe, where tokyo these days is that people are trying to decide what should be the norms, the rules, the expectations of the system. other separate we say that for people in the developing countries might work with, it is a little bit of a

disappointment and frightening to see the united states, which some people have been admiration for, some people say it has been too pushy -- but to see it basically sidelined itself is a troublesome prospect whether you are in africa, china, india, or others. the bigger picture here is a combination of dealing with the substantive challenges that the u.s. and europe places, but also a sense about what role they will play in shaping this future international system that has some incredible opportunities. what does not have to look at doom and gloom in this. africa is going on average about 5% for a decade. there are lots of opportunities there. private capital is going there. china has gone 9.9% in 30 years. there are great opportunities, but there -- but they have to be seized. we got to figure out how

developed and emerging markets work together in a different way than they did in the past. >> bob, another news item that is getting a lot of justified attention is the food crisis in eastern africa where 11 million people are at risk in the current drought. i know the world bank is taking immediate action in the crisis. what can be done to address the longer-term food problem in developing countries? >> well, again, there is the danger an opportunity with this. the opportunity is that if we can increase agricultural and production in the developing world significantly, we can take advantage of higher prices to create higher incomes, help overcome poverty, create a basis for assets and ownership. we at the bank are trying to

deal with this problem by looking all across the value chain. this is everything from research on feed, including different conditions -- climate change, drought, and others. we helped organize something that was started by robert mcnamara in the '70s. it has great potential from some of the research in seed. fertilizers, irrigation, transport systems -- i was meeting yesterday with the president from west africa where the problem is not so much the production, but getting the goods to market. we estimate about half the production is lost on the way to market. investment in storage facilities. again, this does not have to be governmental. we have the private sector that is looking at the value chain and try to see how to produce -- how to improve the production

depending on the country. in monetary terms, the bank was probably investing $4 billion a year in agriculture and now, all of a sudden, $6 billion to $8 billion a year. but, there is also, i think, the phenomenon about how we deal with some of the risk and uncertainty and the price volatility. what people saw in agricultural markets in 2007 and 20008, not only the increasing level, but the sharp changes in prices -- the first up on this -- and we have been working with p g 20 to come out with some ideas -- the government should not make it worse. when you have a potential shortage, when countries put on export bans, you have the crisis in panic. countries will not give up their

ability to do that totally, but at least we got an agreement recently that for humanitarian purchasers, such as the world food program, they will be able to access country's foods. this might seem obvious, but during the crisis in 2007, the head of the food program and i were having to call governments to create exceptions. some better information on the quantity and quality of stocks. people are used to this in the united states, but in china and india they have not had this information. information can lead to some of the panic and volatility situations. rather than try to control prices, which is not going to work, it makes sense to focus on those most believable and most in need. one thing we started to learn at the bank act the financial crisis in east asia and latin

america, the macroeconomic stability was not enough. you could lose a generation if you did not have the appropriate food and nutrition. as people here know, the cognitive ability and potential of children. we have been working with developing countries at different stages of development on basic safety-net programs. when people know you're pretty well, mexico started something. these are called up additional cash transfer programs. they go to, in a sense, the 10% to 50% most needy on the condition that people send their children to school. it is probably done more for women's health in mexico than anything else in the country. the world bank has taken the small and, in one form or another, and help 40 countries develop it. the reason it is important is

this was done in mexico and brazil for about half a percent of gdp. this is a very basic effect. for some countries in sub- saharan africa, they may not have the capability to do that. we work with the world food program and unicef on platforms for dealing with child nutrition and other aspects. in my view, with the ways you have to deal with volatility and uncertainty is every country should have some basic safety- net for those at the bottom. part of the < if you look at north african countries is they had some very expensive programs. i am not just saying throw money at the problem. we have learned from other developing countries how to create an effective safety-net. i think this will be important because i believe the food price issue is going to be with us for a considerable time for some

structural reasons that i will be happy to talk about if you wish. >> the high prices and volatility -- is a temporary problem? what's good question and i get a lot. what people were used to is a price increase any supply response. but i think the situation we are in now is going to remain with relatively higher prices with risk for a longer period of time for the following reasons. first, wardrobe some of the prices in 2007 and 2008 is food stocks became relatively low. you look at korn and wheat stocks globally and there is not a great deal of push. rice has gotten a little bit better, but the problem with rice is it is a rather thinly

traded commodities. only about 7% of rice produced in the world is traded. what set of the prices was the failure of the philippines. people started pulling back. it is vulnerable. the basic grains markets have low stocks. normally you'd expect the stops to get replenished overtime, but there is another phenomenon. as emerging markets become wealthier and people eat better and have two meals instead of one male and eat more meat, you are seeing an increase in demand. it is an understandable process. but it means that even if you have a good harvest, you are not really replenishing the stocks because it is going into the increased demand. this is a gradual process that suggests to me that for a considerable time, we are somewhat at the whim of the weather event.

what happened in 2008 is we had better conditions in europe, north america, australia, and others. the pressure on prices and the volatility is going to be a factor for a while. there is one other dimension. we seek closer connectivity between energy and food prices than 10 years ago. the correlation is very tight. some of it is biofuels, but not all of it. some of it is energy for fertilizers, transport, and other things. another phenomenon, talking about financial markets, investors look at commodities as an asset class like bonds, equities, or mortgages. now we have commodities. this is a very debatable topic. what we have seen in the studies, these people moving in the commodities market will not necessarily change the trend. that is based on supply and demand. but it could affect the movement

and volatility as money moves in and out of these markets. for all of these reasons, i argued that feedsg210 the stupid -- that the g20 days to put food as an issue. let's also try to make the opportunity on the production side. just to give people a sense of where creativity and innovation -- you can take something and make it more positive. >> we work on rate index futures. this audience knows you only have about 5% of the crops irrigated. south asia's more like 40%. good range -- reigns, no problem. you can figure out what the rain levels are in a country that can assess whether or not they will have a good harvest.

you can use nasty derivatives for a good purpose. through our private sector, we are helping in number of emerging markets in a partnership with big banks to have access to commodities and futures markets in the 90 states, which does not exist in some aspects because of the credit system. part of the role in banks is how we can innovate and use markets to view some of these risks. let me switch topics a little bit and go to the political situation. the house marked up this week on assistance, where eight took a huge hit. a particular hit in the context. it is a tough fiscal environment. how do you make the case, particularly republicans that

american interests are implicated here, the cuts are dangerous? what is the best set of arguments? >> it relates to -- if you go back to 1947, when a another generation, harry truman engage the united states and the world, and you look at the levels of income per person or family in the united states, they are about a quarter of what they are today. if you use gdp, it is even less. in 1947, america thought it was

important enough to engage it seriously in terms of economic investment, trade, and security. what does this say about a generation that is four times richer and we have to pull back? it is a fundamental decision about a country and what their priorities rule the world. at another level, i make the point that the types of things that the world bank and many others do is move beyond charity as it may have been seen in the 1950's or 1960's. it is in the realm of self interest. developing countries are now half of developing -- world growth. the more we get, you are not going to get from europe or japan, but you look at the u.s. companies and others doing well. they're benefiting from this growth, whether it be done deer or caterpillars or the service industries and sectors.

america is about 4% of the world's population. if we continue to grow, we have to market to the rest of the world. what has changed a lot, there is increasing opportunities for investors on the trade sector. there is another dimension. the world is an interconnected place. diseases, influenza, it may be in a sense of values and do we care about what happens in southern sudan or liberia? and the interconnection in the security area. the world bank publishes pose conflict or fragile states.

the story of afghanistan is not just shoulders fighting, but what you can create some economically sustainable system, where the government eventually of loans the country. when i talk to the congressman, in different groups, there are those interested in economics and security, and the religious community has gotten more deeply engaged, so there are constituencies. but for all of this, there is a tremendous amount of misinformation. the u.s. foreign assistance contribution is less than 1% of the budget. we are in a difficult budget time. we have to figure out how to take cuts, and the world bank -- we put money back into the development world.

we provide these benefits. the money that was first invested in the world bank has will then leverage many times. we will have an opportunity for a couple of questions at the end of the session. we have some housekeeping here to determine how that is going to take place. >> we have so many people in the room, so i will ask you if you have a card at your table and would you please start thinking about your questions now, and we will collect those in three or five minutes. in the process, we will start collecting questions after that. >> accountability has never been more important when it comes to

aid. you talk about democratizing -- the mid 20s interested view. the nature of these economists is that developing economies can be go into infrastructure. the key notion is we as an institution play a role that is much broader than providing finance. take the knowledge and experience and being able to

share around the world. to do that effectively, we have to reach out and get other people's ideas, we have to create a broader dialogue on these issues. one thing that was launched in recent years that may be an important thing that i have done there is we have created an open information initiative. i used to go to meetings like this and a professor would say, you have great information.

we have some value. you realize it was like $3 million extra. we finally said, we are making it open and available for everybody. we opened up over 7000 data sets. we have changed the whole mind- set. our staff has come up with different software applications where people can engage in the use this. we have created an absence for development competition. we had over 115 or 20 contestants. and we did not get as much to

west africa as east asp -- east africa. we want to -- we want this to work, but it only can if people on it. if you start to engage with people in their own perspective into solutions, you have a much better chance of learning what works and what does not. opening up the bank to hold networks of people that were part of our broader set of partners. it also starts to drive how you think about things.

you start to say, it is hard to know the effect of this if people are keeping the data on gender. we are opening up a gender data initiative. what i find most about -- you can go on our website and punch up a country and see all of the projects we have in the country. you can learn what is going on in that project. by the end of the year, -- i would like to move to a world where people with a hand-held device can start to interact with that. you would think that is what the results are. i think it reflects -- reflects what is happening more broadly in the world.

in many developed countries, there are issues with property rights. what can the international aid community do about it. the questions are exactly right. you have to think about the basis of property rights, but also who gets them. one of the issues is in some countries, women did not have access to property, so it was harder to borrow. sometimes, this is the point about learning from experiences as opposed to just text books. one of the programs we did in ethiopia was on the property rights a document, we created space for another name and picture. it vastly increase the registration for men and women.

at the same time, property rights -- we work with countries on a registration schemes, doing business environment, improving the investment requirements, the will of law, these are components of having use of property rights. at the same time, some countries have had different types of tender. you have to figure out how to be sensitive to those issues as well. it is part of the broader point i was making with the banks. while we are a big financial player, we are building those institutions and marking those -- it may be in the property rights to have effective micro finance or credit or other

assets. it is an empowerment agenda. everybody wants to own something and be able to build from it. can you share ideas of working with this on civil strife? i was in the south sudan for independence. to have huge pose conflict challenges, and i would recommend a development report on this topic for this year. what are some of the lessons you have learned about working in this situation? >> it is a topic that has interest me. you were with me on one of the trips.

what i was always struck by is you have people who focused on security issues, development issues, governance issues, but they were not really interconnected. our original name was the international bank of reconstruction and development. our first loan was to france. the challenge you outlined is the reconstruction issue of the 21st century. how do we interconnect these topics better. it is an art not a science as with a lot of problems in life. one of the key dimensions is the importance of basic security, creating inclusive coalitions. you may not be able to get everybody in a society, but from

the political economy view, you have to get a critical mass to move the issue forward. you have to get early results. let me give you an example of where this seems obvious but is hard to achieve. whenever i talk to security people, they want a job fast. they want to show progress, and stop young men from going back to violence. economists will say, we cannot do that. we have learned a fair amount, which we are trying to apply in north africa and other countries about the ways you can do more with out interfering with building the private sector and job creation. they may have a food for work program. the importance of local ownership, the project that we

have put together years ago is probably the most successful. you have local councils that make their own decisions and may have small sums of money. is it a school, a theater rohm. this is a sense of ownership and people will be willing to stand up and protect their community against those that would threaten a school or operation. this is a field that creates the banks to integrate more effectively. regional bank players. on the security side, we see the importance of regional security groups. it is in my mind as i met with

west africans yesterday. what i find interesting is, even these topics of very interesting to others. it reflects the problem that sometimes people operate in a tunnel categories. i will give you another one. it would surprise people that the humanitarian and development communities do not interconnect as effectively. we need to figure out how some of their sourcing issues can help fund the development side.

nutrition and agriculture. nutrition people in agricultural people may never meet. we tried to interconnected these issues without getting bogged down in people's specialty. there is a lot of use to employ people. it is often seen as a form of corruption. it is interesting when you have an armed population that those programs can affect emergence of a militia. it is rational in some of those contexts. often it overwhelms with very modest compassion.

we are calling multi don't trust funds. if a country as 40 donors, they have programs that have trouble getting basic staffing. put the money into one pot, have the country work with the country on their priorities. help them build a capacity, and be careful in terms of trying to improve the transparency and others. >> what is the bank doing to promote the rights and status of women at the policy level? >> i reference a little bit about the gender report. >> i hope this will move us to

another stage. we have been trying to get people around the world to understand the basic concept. let's start with the basic concept. do not allow your people to reach their potential, it is probably not good for your economy. the reason i start with smart economics is in societies around the world, there are different concepts of roles and families. it can be somebody in europe or elsewhere that realizes that this shows to better economic development. it leads to more income for a family. it starts to drive a whole series of willingness to engage in women more effectively. if we are looking at issues from everything on the effect to world schooling, infant

mortality issues, to some of the top biddies -- tapis bigger and property ownership, its value -- it varies by country and experience. we also learned things about the benefits of working through women households. it is extraordinary and compelling for a variety of sources. you put money through the women head of household. there are many multiples of the male head of household. being gender attentive is not only an issue of women and men.

we have tried to do some pilots to learn more about these things. when you run a big institution, you have to make sure it is not a check the box issue. we have testing leaders and we tried to have asking -- we want to build it into the dna of people. do you build it as a separate capacity or do you try to learn and integrate it through your organization? we tried to use some pilots in specialized aspects. the real goal is how do you integrate this and scale it up? >> can you briefly, -- comment

on the recent demise of the world trade talks? >> i believe this would be an extreme tragedy for the international system. trade can historically be one of the best drivers of growth. the u.s. is talking about cutting subsidies. we could put together a package that cannot do it by its own. emerging markets would have to step up and play and emerging role. i was trying to make the case that simply looking at the

position of the u.s., there is still an opportunity to push this what are you going to do to open markets and create a special opportunities? it would require it europeans to be very supportive and would require others to no longer pretend that today art sub- saharan africa. i was against the view of coming down, but i have been warned -- wore you will not get a deal on that anyway. i know the u.s. constitutional system -- i think if you are not on offense, the congress is not going to do it for you. you will not get a trade deal driven by congress. you need somebody in the united

states to organize this with a vision and a direction. we have to help people adjust to change. we have an unemployment insurance system that is 80 years old. there is a work force investment. why not take these tens of billions of dollars and ask yourself, are we getting people back into jobs in an economy that is changing? >> thank you for your thoughtful answers. thank you for your support and for being with us. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] --2011]

>> visit charleston this weekend on book tv. it is featured on c-span2. saturday at 5:15 p.m. eastern. american history tv on c-span 3. plantation life and a catastrophic 1886 earthquake. charleston is south carolina, this weekend on c-span2 and 3. >> president obama has announced that the auto industry and has said that cars should reach 53 miles per gallon in the future.

the president made the announcement at a gathering of auto industry executives in the washington, d.c. convention center. this is about 20 minutes. >> thank you and good morning. i have been having a lot of fun this week. nothing more fun and more important to the future of the american economy than of the agreements we are making today. i am proud to be year -- be here with people that represent auto companies across america.

[applause] i am glad i have a chance to see some of the great cars you are manufacturing. it is only a matter of time before malia gets her learning permit. i hope to see some models, the ejector seat any time boys are in the car. hopefully you have some of those in the pipeline. for the last few months, gas prices have been killing people at the pumps. they are filling up their tanks and watching the costs rise, $60, $70. for some families, it means driving less. but others have to go to work and pick up the kids.

in other expense when money is already tight. this is not a new problem. for decades, we have left our economy vulnerable and with the demand for oil going up, for countries like china and india, the problem is only getting worse. the demand for oil is rising far faster than supply. prices will keep going up unless we do something about our own and dependence on foreign oil. that is the reality. there is no quick fix for the problem. there are things we can do now to help us become more energy independent.

house is not in order. the speaker pro tempore: the house is not in order. the gentleman is correct. the gentleman is recognized.

mr. ryan: mr. speaker, i yield the remainder of my time to the gentleman from ohio, the speaker of the house. the speaker pro tempore: the gentleman is recognized from ohio. the speaker: my colleagues, i'd like to cut through all the fog here rather quickly. today's report on the economy reminds us that our economy is still not creating enough jobs. americans are worried about finding work. they're worried about our economy, and they're worried about the mountain of debt that's facing them and their children. today, we have a chance to end this debt limit crisis. with this bill i think we're keeping our promise to the erican people that we will cut spending by more than the increase in the debt limit. the congressional budget office has certified this commonsense standard and has been backed by more than 150 distinguished economists from across the

country. we're also imposg caps to restrain future spending so we can stop the expansion of government while giving our economy a chance to grow and to create jobs. and we're advancing the great causof a balanced budget amendment to the constitution. what this bill now says is that before the president can request an additional increase in the debt limit, two things have to happen, a joint committee in the congress must produce spending cuts larger than the increase in the debt limit and both houses of the congress must send to the states a balanced budget amendment. listen, a balanced budget amendment, it is -- it's time for this to happen. it enjoys support in both houses of this congress and it enjoys bipartisan and widespread support across our

country. the bill alsends this crisis without raising taxes which would cripple our economy and there's noimmicks. there's no smoke screens her that represent the old ways of doing things. now, the bill before us still isn't perfect. no member would argue that it is. it's imperfect because it reflects an honest and sincere effort to end this crisis by sending a bill over to the senate that at one time is agreed to by the bipartisan leadership of the united states senate. and to my colleagues in the senate if they were here, i would say this -- if this bill passes, this house has sent you not one but two different bills that cut spending by trillions of dollars over the next decade while providing an immediate increase in the debt ceiling. and to the american people i would say, we've tried our level best.

we've done everything we can to find a commonsense solution that should pass both houses of congress and e this crisis. weried to do the right thing by our country, but some people continue to say no. my colleagues, i have worked since the first week of this session when we were sworn in in january to avoid being where we are right this moment. two days after we were sworn in, the treasury secretary sent us a letter asking us to increase the debt ceiling. i immediately responded by saying we would not increase the debt ceiling without serious cuts in spending and serious reforms to the way we spend the people's money. we passed a budget. the other body, it's been over

800 days and no budget, no plan. this is the second bill we've sent over to the senate and yet not one piece of legislation out of the senate that's passed that deals with this crisis. and my colleagues, i can tell you that i have worked with the president and the administration since the beginning of this year to avoid being in this spot. i have offered ideas. i've negotiated. not one time, not one time did the administration ever put any plan on the table. all they would do was criticize what i put out there. i stuck my neck out a mile to try to get an agreement with the president of the united states. i stuck my neck out a mile and i put revenues on the table in order to try to come to an agreement to avert us being where we are. but a lot of people in this town can never sa yes.

a lot of people can never say yes. this house has acted and it is time for the administration and time for our colleagues across the aisle put something on the table. tell us where you are. and,es, ople can be critical of what we've done, but where are the other ideas? at this point in time the house is going to act and we're going to act again. but it is time for our colleagues across the aisle to tell us what they're for, tell us how we can end this crisis. you know, ronald reagan has been quoted throughout this debate over the lasteweeks and ronald reagan would probably be flattered, i'm

sure, if he were here, but ronaldeagan on his desk had a little plaquered and that plaquered said something simple. it said, it can be done. i have a replica on my desk. i tell you, members of congress, it can be done, it will be done if we have the courage to do the right thing. so for the sake of our economy, for the sake of our future, i'm going to ask each of you as the representatives of the people of the united states to support this bill, to support this process and end this crisis now.

the speaker pro tempore: all time for debate on the bill has expired. rsuant to house resolution 375 the previous question is ordered on the bill, as amended. the question is on third reading of the bill. those in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it. third reading. the clerk: an act to establish the commission on freedom of information act processing delays. >> mr. speaker. the speaker pro tempore: for what purpose does the gentlewoman from new york seek recognition? >> i have a motion to recommit at the desk. the speaker pro tempore: is the gentlewoman opposed to the bill? >> oh, yes i am opposed to this bill. the gentlewoman qualifs. the clerk: ms. hochul of new yorkoves to recommit --

>> i reserve a point of order. the clerk: ms. hochul of new york moves to recommit the bill to the committee on rules to amend section 403-b-3 at the end following a new clause, prioritizing deficit reduction from corporate subsidies before cutting education. the joint committee shall first consider the elimination of, one, oil and gas subsidies for the major integrated oil companies and, two, subsidies for corporate use of aircraft before cutting essential education programs that are necessary for the creation of jobs, economic recovery and investment in america's future. the speaker pro tempore: pursuant to the rule, the gentlewoman from new york is recognized for five minutes in support of her motion. ms. hochul: thank you, mr. ms. hochul: well, here we are. >> the house is out of order. ms. hochul: the eyes of the

world are upon us. the eyes of the american people are upon us. but most importantly, the eyes of the people who put their faith in us in sending us to this institution are certainly upon us. and as we engage in this debate, i will say just one thing that is clear t me, that everyone in this room loves this great country, loves this country. america has stood the test of time and risen above disasters as one people. in the last decade alone, rattled by wars, unprecedented natural disasters, the longest recession since world war ii. as we approach the 10th anniversary of 9/11, we are reminded of what we can do when we pull together. we are a resilient people. but, mr. speaker, never, never

in this history has there been an intentional disaster perpetrated by the very people who were sent to be the caretakers of th country. and that is exactly what will happen if we refuse to take action, prevent default and pay our nation's bills now, not six months down the road. i understand that a spirited debate in defense of one's viewpoint, certainly. but when i look down at the copy of the constitution that i keep on my desk, i thank god that our founding fathers had it in their hearts to give and take and yes compromise for what is in the best interest of this country. i can't go back to the hill view

restaurant on transit road in lancaster and look into the eyes of my seniors and tell them we didn't get this job done, that we decided to continue this game of political chicken to dangle defaults cruelly over the heads of our citizens, businesses and economy and hold it hostage while we kicked this can down the road again. mr. speaker, am i supposed to tell the greatest generation that when they passed us the torch, we dropped it because we couldn't compromise? and that is why my amendmen is a simple statement of america's priorities. it says before we cut our education for our children, that we first must cut subsidies to big oil and corporate jets. this amendment is one of our last chances to affirm the

values that bind us as a nation. i know one of these shared values is our sense of obligation to create a better world for our young people to inherit and give our people a better chance to achieving their dreams. the next generation will be more prosperous and more secure, but only if we invest in it now. in the human capital, whose creativity, innovation and work eic can ensure this country remains a world leader and beacon of hope to others. but this is all at risk. speaker boehner's plans results in consequences that i can't imagine anyone in this room really wants. on top of the unconscionable uncertainty, it will leave this economy with a temporary fix and we are putting investments in education that are so critical to our young people to compete with china, india and europe on

the global change. my amendment is about priorities, the priorities of the people we represent, because i face slashing programs for seniors, young people, middle class, all because we are afraid of the influence of big oil? that is wrong on so many levels. i come from a family of entrepreneurs. my mom started a small business an my father helped grow a business from four to 3,200. i get it. i have tremendous respect for companies to have grown to that size. if they have a corporate jet, i don't begrudge them. that's great. but we agree our deficit must be reduced and why can't we ask them, people with big oil and corporate jets give us a hand and make this country great. you know, a hardware store in a

county in my district, how is it they pay more in taxes than the big companies that are shipping jobs overseas? i can't explain that to that family. i cannot do that. and my constituents are hurting in upstate new york. some of them at the time of huge corporate profits can hardly afford to fill their gas tanks. there is one value we share and that is fairness. it is fundamentally unfair. th time of the gentlelady has expired. ms. hochul: i will finish very briefly. the speaker pro tempore: the time of the gentlelady has expired. the gentleman from california. ms. hochul: i do want to reach out our hand -- the speaker pro tempore: the gentleman from california. mr. eier: i wish to cla time in opposition to the motion to recommit.

ms. hochul: i yield back the balance of my time. the speaker pro tempore: the gentleman from california withdraws his reservation. mr. dreier: i haven't spen yet and i appreciate the applause of my colleagues on the other side. the speaker pro tempore: does the gentleman withdraw his reservation? mr. dreier: i would like to withdraw and claim time in opposition to the motion to recommit. mr. speaker, this doesn't prioritize social security, it doesn't prioritize medicare, it doesn't prioritize veterans, doesn't propose one item that would cut spending. all it does is engage in class warfare and increase taxes. vote against the motion to recommit.

quorum call be lifted. the presiding officer: without objection. mrs. hutchison: mr. president, i rise today to speak about the looming august 2 deadline for raising the debt ceiling and making reforms or budget cuts at least that would allow us to show that we are not going to have business as usual in washington but that we are going to raise the debt ceiling with the reforms that are necessary. despite the differences in this body, we are all here to share three concerns.

first, we do know at this point, because of the time that it has taken us to cobble together something that could be put through both of our houses and signed by the president, that we have fundamental differences in the principles of how we should run our government. i think it is very clear the republicans have stood for no taxes, especially in this economic environment. we believe that piling taxes on top of the costs of the obama health care system that is in the process of being implemented would keep our businesses from hiring people and getting this 9.1% unemployment rate down. i think we all agree that we need to bring that unemployment rate down. but we have fundamental differences about what's causing it and how we can solve it.

number two, we all agree, i believe, or 95% of us agree that we cannot default on the debt in our country. i do believe in both houses the vast majority believe that we should not go into default. and the costs of a default are not being considered nearly enough. the costs of a default, of interest rates going up, of having to do backpay, having to correct some of the many issues that we will face by having some of the people who are owed money not paid and having to pay interest and extra interest if we are in default. we cannot allow that to happen. i think we all agree on that. and we are all troubled with the delay in resolving this issue. the delay i think has been

caused for many reasons. of course, our fundamental differences are one, but i believe that although members of congress and leaders in congress have been talking for a long time, i think the president did not get involved until just two weeks or so ago and has never put forward a real plan and then talked to members of congress one-on-one about having his plan or some iteration of his plan go forward. now, the senate majority leader and the house speaker have put forward plans. i believe that there is a common ground that can be found between these two proposals, but they are not the same. in fact, i think the republican leader in the senate has also put forward a plan and i think we're seeing the different pieces of the plans that have been put forward now starting to

come together. i believe the boehner plan is a good one. i believed in the cut, cap and balance plan, where you cut spending now to make your down payment, you cap spending every year for the next ten years at a level that brings down the overall deficit, and you send a balanced budget to the states for ratification. i feel so certain if we could pass a balanced budget from this congress and send it to the states, it would be ratified and it would put us on the real course for fiscal responsibili responsibility. the course that would assure that social security is sound, that medicare works, and that our children and grandchildren will not inherit a debilitating debt that hurts our economy. so i do believe that cut, cap and balance was the right way forward.

but, mr. president, congress is split. we have a majority of democrats in the senate and republicans in the house. therefore, we are not going to get everything that any one of us believes is right and certainly we're not going to get the boehner plan in the senate. but it is the right approach and we will have to take a few steps at a time and i hope that we will be able to come to terms on that way forward with the principles of cug spending, putting a cap on spending -- of cutting spending, putting a cap on spending and not raising the debt ceiling any more than the cuts that can be counted. and that's what is a concern to me about the reid plan. senator reid is calling for $2.7 trillion in an yeast in the

debt ceiling. the purpose, as the president has stated, is to get through the next election in 2012 and not deal with this again. but, mr. president, the next election should not be the focus. the focus should be, how do we show that our country is on the right track to get this enormous debt whittled down. by whittling down the deficits and having sound budget principles. this $2.7 trillion would be the largest debt ceiling increase in the history of america. the previous largest debt limit increase was $1.9 trillion which president obama signed into law in february of last year. this debt ceiling increase in senator reid's proposal is not paid for.

it offers $1 trillion in cuts for a $2.7 trillion increase. many of those cuts are illusory. they are not cuts that can be counted. to say that we're going to label $1 trillion of cuts savings from leaving afghanistan and iraq is just not credible. we don't know what the obstacles are going to be in afghanistan and possibly iraq. we also don't know what we might have to do in the middle east going forward. afghanistan is not settled, mr. president, and we have to have a certain level of stability on the ground in afghanistan or we will have wasted the billions that we have already spent and the lives of

our military personnel in afghanistan because it will go back to the way it was before, a center for terrorism that will come to our country or can come to our country. it did once already and we have been over there to try to wipe out al qaeda and the taliban, which has been in league with al qaeda. we have been over there losing american lives and spending american taxpayer dollars to protect our country from another 9/11. to say that we're going to cut $1 trillion in the future over the next ten years when we aren't placing the emphasis on what are the conditions on the ground is not sound policy and it's certainly not sound national security policy. so that's illusory. and then the other parts of the

cuts that i think are very hard to decipher are cutting waste, fraud and abuse, which we all want to do, but we don't have the guarantee of those cuts. so i think it is important for us to look at the cuts and try to make sure that if we're going to raise the debt ceiling, we raise it only the amount of the actual cuts that we can produce. in the majority leader's -- majority leader reid's legislation, there is a joint committee. there is also one in the boehner bill. but in the majority leader's legislation, the committee has to report but its product doesn't have to be passed and enacted before the debt ceiling is lifted. now, that's the real problem in

senator reid's proposal. the bill would lose its expedited status and the joint committee would dissolve on january the 13th of 2012 under senator reid's proposal and then we would still have the lifting of the debt ceiling that has already been enacted. that is not the way to go forward. the joint committee proposed in the boehner plan is forced to produce savings, and the forcing mechanism in this case is the fact that the debt limit can't be increased unless the cuts are enacted. so you will keep the governor on the debt increase by assuring that there have to be cuts in spending dollar-for-dollar. and, third, there is no balanced budget amendment included in the reid proposal, and, in fact, there's no requirement that we even vote on a balanced budget amendment. now, i know that

it would be very difficult to pass a balanced budget amendment right now out of congress. but i do believe it is the best thing we could do for the long-term security of our country. so i would hope that, as we come together -- because we know the reality here; the reid bill is not going to pass the house and the boehner bill is not going to pass the senate exactly -- so we've got to come together with a plan. maybe it's a short-term plan that just has a dollar-for-dollar cut along with the raising of the debt ceiling, or maybe we can get more after we dispatch with the two bills that are now before the congress and try to put something together that has the best parts of both. i could not support the reid plan, as it is today, and i do

support the boehner plan, but i also know that neither of them is going to pass the other house. so i think it is incumbent on us to now go forward, and let's quickly start doing the work that could produce results, and that is to try to get the best of both of these before the august 2 deadline. and i think we've got to be open to what can work that stays within the principles of no tax increases and no debt ceiling increase without the same amount of dollars, at least, to be cut from spending, with real cuts that can be assured. i think the american public is looking not for promises but for the assurance in the law that we will not be able to raise the debt ceiling without some cutting of spending and reforms

that would equal the amount that the debt ceiling is increased. we can go forward, mr. president, with those principles which i think both sides would agree to at this final few hours that we have before that debt ceil something reached. but it is time -- before that debt ceiling is reached. but it is time to vote on these bills and then get down to the real work of determining what is the best in both that we can pass in bothdings under the quom call be dispensed with. the presiding officer: without objection. mr. conrad: mr. president, we are now reaching a critical hour in the congress of the united states on the question of extending the debt limit of the nation and of fundamentally dealing with the debt of the nation. i don't think there is any serious person in either body that does not understand that we

must deal with the debt itself as we extend the debt limit. we are borrowing 40 cents of every dollar that we spend. the gross debt of the united states will reach 100% of our g.d.p. by the end of this year. the best economists in the country of whatever philosophical stripe are telling us we'ren an unsustainable course that must be changed. mr. president, in the midst of this, we have had the house so far unable to send us a package. now we're told they do hav the votes because they have added a balanced budget to the constitution as part of their

package. mr. president, the balanced budget that they have previously proposed in the house of representatives can never pass the united states senate, at least as this body is currently constituted. and it should not pass this body. it is deeply flawed. and to attach that to a measure that has to pass both houses before tuesday of next week frankly is an indication of a lack of seriousness on the part of our colleagues in the house of representatives. ultimately, there has to be a bipartisan agreement. our friends in the other party control the house of representatives. the senate is controlled by my party, the democratic party. we have a democrat in the white

house. no serious pson can fail to understand that putting a -- an amendment to the constitution of the united states that is deeply flawed into that package absolutely guarantees that it cannot pass in this chamber. that would take a two-thirds vote. i don't believe it would even command a simple majority here, much less a two-thirds vote. so here we are at the 11th hour and people in the other body seemingly are still not serious about coping with the challenge of both extending the debt limit to aid a default which would be catastrophic and

of dealing with the debt itself. mr. president, i understand ideological rigidity. the time for that is past. the time now is to work together in some reasonable way so that we advance legislation that both extends the debt limit to avoid the catastrophic consequences of a default and to deal with the debt threat itself. mr. president, "the new yo times" on wednesday had this story." on all levels of the economy, concern about the impasse." what they were talking about is the rating agencies saying if we don't do both, if we don't extend the debt limit and deal effectively with the debt itself, they're going to

downgrade t rating of our credit as a country. mr. president, the story goes on to say -- "economists and analysts are trying to gauge the cost to the economy and the consumers. if the united states loses its solid gold credit rating, a move that appears more likely now that the standoff in washington over government spending has calcified. some economists say the effects of lowering the federal government's credit rating to aa from aaa can be measured in the billions of dollars, in increased borrowing costs for the government and in the billions more tha consumers, corporations, states and municipalities will have to pay for their credit. it also could erode consumer and business confidence, slowing even further the economy and job creation." mr. president, it's started already. we have just learned the latest

numbers on economic growth. they are a tepid 1.3%. mr. president, this uncertainty being created here by a failure to deal with our debt and with an extension of the debt limit are creating a head wind for our economy. ducing economic growth, slowing job creation, costing us a stronger recovery. mr. president, i want to remind colleagues, for every one percentage point increase in interest rates, that adds adds $1.3 trillion to the debt. so kicking this can down the road, not facing up to it has enormous consequences. $1.3 trillion added debt for every 1% increase in interes rates, this is justhe effect on the federal government.

trillions more wou be the effect on consumers, on companies, on other levels of government with an increase in interest rates. mr. president, when we see the proposal by the speaker that apparently the house is now prepared to send us, it has fatal flaws, and here they are. first of all, it would repeat the default crisis in just six months. that would continue the uncertainty and put the economy at further risk. our friends on the other side have repeatedly said how uncertainty is hurting this economy, and now they want to crte themselves more uncertainty. it makes no sense. mr. president, the boehner pn

includes significantly less deficit reduction than does the reid plan. the boehner plan, as i understand it, has not been able to calculate its newest version fully. it was in the range of of $1 trillion of savings. majority leader reid's plan is well over $2 trillion of savings. third, the boehner plan provides no firewall between security and nonsecurity spending. that means even deeper cuts on the domestic side of the ledger because we all know whatappens if you don't have a firewall. and finally, it requires an irresponsible balanced budget approach that has been clearly rejected here and will be reject ed again. that's certain.

mr. president, standard and poor's has warned against repeat ed debt ceiling debates. here's what they have said on july 26. "we would be concerned if we thought the debt ceiling debate would come back and be open and we'd have to go through all this again and again and again. that would be negative in our view." mr. president, this is the rating agency that determines what the interest rates will be on the debt of our country. not directly but indirectly, because if they write down our creditworthiness, that will increase interest rates. so they are sending us a very clea signal, don't do the speaker boehner plan that has only a six-month extension and repeat this whole process and create more uncertainty and put e economy further at risk. to avoid a u.s. credit rating

downgrade, the s&p wants to see a bipartisan debt reduction effort. not the totally partisan approach that speaker boehner has for the moment chosen to pursue. mr. president, i don't know what could be more clear. the other body is in the control of our friends in the other party. this body is in control of the democrats. at the end of the day, we have to come together. we have to work together. now, i have been part of two efforts to work together. lastear, the fiscal commission, 18 of us given the responsibility to come up with a plano get our debt under control. at the end of the day, 11 of the 18 agreed on a plan. five docrats, five republicans and one independent.

fully bipartisan. i was proud to be part of the 11 that aeed to that plan. this year, i have been part of the group of six, three democrats, three replicans that were ask by about 30 of our colleagues to see if we could find a way to implement the findings of the commission, because for the commission's findings to be impmented, they had to have a super, supermajority. they had to have 14 of the 18 agree. and even though we had 11 of 18, it wasn't enough. so about 30 senators met at the beginning of this year, the end of last and asked a group of us six, three democrats, three republicans, to see if we could come up with a bipartisan plan. we have worked all year, hundreds of hours, and we have agreed. we have laid out a plan for our colleagues. it is the only bipartisan plan before either chamber.

mr. president, speaker boehner at this late hour is still pursuing a plan only on the republican side of the aisle and only in one chamber. that can't possibly be a recipe for success. mr. president, david brs, stdard and poor's global head of sovereign ratings said this on july 26 -- "we will measure the deal on a number of parameters. one is is it credible? and corct, among other things, means to us there has to be some buy-in across the political divide, acrs both parties, because politics can and will change going forward. and if there's ownership by both sides of the program, then that would give us more confidence. it's not just about the number. it's about the all-in intent."

mr. president, are our colleagues listening? the solution cannot be found on just one side of the aisle in one chamber. this is going to require bipartisan, bicameral cooperation. we're going to have to act like adults. not like kids in a school yard pointing fingers, spreading rumors, spreading blame. that will not lead to success. mr. president, here's the circumstance we face. the red line i the spending line of the united states going back 60 years. the gre line is the revenue line of the united states going back 60 years. and what you can see, the

revenue of the united states as a share of our national income is the lowest it has been in 60 years. spending as a share of our national income is the highest it has been in 60 years. revenue is the lowest, spending is the highest. that's why we have record deficits. mr. president, clearly you have to work both sides of the equation to get a solution. some of our friends on the other side are saying don't touch venue. me of our friends on both sides are saying ah, and don't touch entitlements. don't touch medicare, don't touch social security, don't touch medicaid. mr. president, if you can't touch revenue and you can't touch the entitlements, you can't solve the problem by definition. when you're borrowing 40 cents of every dollar and you exclude

all revenue -- that's half the equation -- and you exclude 60% of federal spending, if you eliminated all the rest of federal spending, every dime for defense, for nondefense discretionary, if you eliminated every dime, you wouldn't solve the problem. mr. president,t some point here we've got to get serious and real withhe american people. the balanced budget amendment that our colleagues in the house sent us previously that's already been rejected here on, now they're putting in the package to send us here again at the 11th hour, a balanced budget amendment that is as deeply flawed asny amendment that i have seen in 25 years in this chamber. let me review what our friends on the other side sent us in a

balanced budget amendment that was rejected here just in the last few weeks. it would restrict the ability to respond to economic downturns. meaning you would compound the decline. that's bad economics, and it's not going to pass. number two, it uses social security funds to calculate balance, and subjects that program to the same cuts as other federal spending. even though social security has its own trust fund and is separately funded. number three, it shifts the ultimate decisions on budgeting to unelected andnaccountable judges. and fourth, it requires a state ratification process that could take years to complete.

we don't have years to wait for a state ratificationrocess for a constitutional andment. we need to make these spending and revenue decisions ourselves and do it now. it's our responsibility. let's not be waiting for the states to ratify a constitutional amendment before we take the action that is necessary. mr. president, the balanced budget amendment that the house previously sent us has the risk of turning a recession into a depression. why do i say that? because there is no provision in the amendment that they sent us r an economic downturn as being an exemption from the balanced budget requirement.

that is hoover economics all over again. how many times do we have to learn the harsh lesson that when we are in an economic free fall, the only entity big enough to pull us out is the collective organization of our government? that is the only place that has the muscle to prevent a recession from turning into a depression, and the baland budget amendment our colleagues cept us before would absolutely lock down the federal government's ability to respond. that would be a profound mistake, and contradict all we have learned in economics since the great depression. this is what norm ann ornstein at the american enterprise institute said about this constitutional amendment. he called it 5, quote, "really

dumb idea." this is what he said. "few ideas are more seductive on the surface and more destructive in reality than a balanced budget amendment. here's why -- nearly all of our states have balanced budget requirements. that means when the economy slows, states are forced to raise taxes or slash spending at just the wrong time, providing a fiscal drag when what is needed is countercyclical policy to stimulate the economy. in fact, the fiscal drag from the states in 2009 and 2010 was barely countered by the federal stimulus plan. that meant the federal stimulus provided was nowhere near what was needed but far better than doing nothing. now, imagine that scenario with a federal drag instead." mr. president, "the washington post" wrote an editorial about

the house balanced budget amendment headlined "a bad idea returns." rewriting the constition is the wrong way to deal with the debt. here's what they said in their editorial. "worse yet, the latest version would impose an absolute cap on spending as a share of the economy. it would prevent federal expenditures from exceeding 18% of the gross domestic product in any year. most unfortunately, the amendment lacks a clause letting the government exceed that limit to strengthen a struggling economy. no matter how shaky the state of the union, policymakers would be prevented from adopting emergency spending such as the extension of unemployment insurance, and other countercyclical expenses that have helped cushion the below of the current economic -- blow of

the current economic downturn." mr. president, it doesn't stop there. this is what senator mccain said on the republican balanced budget amendment proposal on july 27. "what is amazing abo this, some members are believing we can pass a balanced budget amendment to the constitution in this by with its present representation and that is foolish. that is worse than foolish. that is deceiving many of our constituents. that is not fair to the american people to hold out and say we will not agreed to raising the debt limit until we pass a balanced budget amendment to the constitution. it is unfair. it is bizarro. maybe some people who have been in this body six or seven months or so believe that. others know better. it is time we listened to the markets. it's time we listened to our constituents. most of all, it's time we listened to the american people and sit down and seriously

negotiate something." senator mccn had it exactly right. sending us a deeply flawed balanced budget amendment to the constitution of the united states at the 11th hour is not designed to achieve a result. it is achieved, it is designed to achieve a headline. a bumperticker slogan that will not help us solve the problem. mr. president, here's what a top economic adviser to former president reagan said about the house balanced budget amendment. he said and i quote, "-- this is bruce bartlett a former reagan administration top economic adviseor. and i quote him. "i have previously explained the idiocy of right-wing advocates of a balanced budget amendment. however, the new republican

balanced budget proposal is especially dimwitted. in short, this is quite possibly the stupidest constitutional amendment i think i have ever seen. it looks like it was drafted by a couple of interns on the back of a napkin. every senator co-sponsoring this balanced budget amendment should be ashamed of themselves." that is from a former top economic advisor to ronald reagan. is anybody listening? is anybody paying atttion to how far off base things have slipped in the other body, to send us at this moment, at this critical juncture a plan that has absolutely no chance of passing in this body, and should not? mr. president, what is so deeply flawed? in addition to the other points i've made, the balanced budget

amendment that the house republicans cept us earlier -- sent us earlier set a spending cap of 18% of g.p. well, let's add up what that would mean. u can see here social security is the red band. that's about 5% of g.d.p. if you add defense and all other nonhealth care spending that takes you up to about 16.5% of g.d.p. interest on the debt takes you to over 18% of g.d.p. you notice what's missing here? medicare. inhe republican plan, that they sent to us, with a spending cap of 18% of g.d.p.,

if you fund social security, if you fund defense and other -- and other non-health spending, and you fund interest on the debt, there's no money left. there's no money for medicare. there's no money for medicaid. there is no money for any health care spending. mr. president, that's what the house of representatives sent us just in the last seval weeks as a balanced budget amendment to the constitution of the united states. when some of our side called it cut, cap and kill medicare, they weren't kidding. because if you add it up, it doesn't add up. mr. president, not only that,

the balanced budget amendment r colleagues in the house sent us just in the last few weeks also said it would take a two-thirds vote to get any additional revenue, even though revenue is the lowest it has been in 60 years. they would apply a two-thirds requirement to get more revenue. really. so they would protect with a two-thirds vote requirement every tax scam, every off-shore tax haven, every tax shelter currently being used by some to avoid and evade the taxes they owe our country. i've shown this picture on the floor of the senate many times. this is a little building down in the cayman islands. a little five-story building

that clas to be home to 18,857 companies. they all say this is their business headquarters. ve said that's the most efficient building in the world. a little five-story building down there and it's the headquarters of 18,000 companies? anybody believe that? anybody believe that 18,000 companies are operating out of that little building down in the cayman islands? they're not operating tir businesses out of there. they are engaged in a giant tax scam to make all the rest of us pick up their responsibilities. all of us who pay what we owe are getting stuck by the companies that are hiding out in this little building down in the cayman islands, avoiding the taxes that they owe our country.

because there are no taxes down in the cayman islands so they operate out of this little building down there, five-story building, 18,000 cpanies. and they avoid paying the taxes that they owe and stick all the rest of us with the responsibity. that's not right. and the constitutional amendment that our colleagues in the house of representatives sent us would protect that behind a wall of a two-thirds vote, which means you'd have an impossible time ever fixing this problem. it's hard to get a 60% vote around here, much less two-thds. they would protect every off-shore tax haven, every abusive tax sheer, every unfair tax preference that's in the current code because they

would require a 2/3 vote to change it. mr. president, that flawed amendment is not going to pass the united states senate. not now, not later this year, not next year, because it itself would require a two-thirds vote. it is not going to happen.  so i'd say to our colleagues in the other chamber, sending us a totally partisan approach with a deeply flawed constitutional amendment is not going to work. it is not going to help solve the problem. and now is the final for us to join in a serious dialogue about solving the problem, solving the debt threat overhanging the country, which will require not a trillion-dollar package, as is

in the house offering, but a $4 trillion package. the occupant of the chair well knows of what i speak. he was governor of west virginia and he dealt with a piss cal crisis in his state and he guided his state through that crisis of the not just by operating on one side of the aisle, but by working together with people on both sides to come up with solutions. not political slogans. we are w beyond that. we are within days of a default on the debt of the united states that would have catastrophic consequences for t economy of our country. it's time. it's time, colleagues, to come together to do something that

can pass, to deal, yes, with the debt limit but also to deal with the debt itself. it will be an empty gesture if we just extend the debt limit and we don't deal with the debt itself. now, our leader, to his credit, has put something together that begins to take ideas from both sides of the aisle to try to resolve this crisis. it would save the nation from an immediate economic crisis. it would provide a significant down payment on deficit reduction -- more than $2 trillion --ndt would put in place a special joint coressional committee, equally divided, democrats and reblicans, to find additional savings. and there is no new revenue in the plan. our friends on the other side have thus far said, at least in

the house of representatives, they can accept no new revenue, none, not a penny. so our leader has said okay, i don't like that but if that's your line in the sand for right now, we will accept it so that we can find a solution that both sides can support. no new revenue, more than a trillion dollars -- more than $2 trillion of spending cuts, and a special joint committee to come up with a plan to achieve even greater savings. that's a pretty good offer to the other side to say, we hear you, we want to work with you because we need a solution. mr. president, we're just days

away from a true crisis, one that would be self-inflicted. colleagues, let's not go there. let's come together. we've shown we can do it in the past. we need to do it now. not with blame, not with finger pointing but by saying this is a time to join together, to stand shoulder to shoulder to prevent irreparable damage being done to our country. i ask my colleagues, now, now is the time, this day we've got to find a way to come together. i thank theecognized for whatever time i shall consume as

if in morning business. the presiding officer: without objection. mr. inhofe: there is a simple reason we are talking about the debt limit increase and it's the fact this president has spent more money than i ever believed would be possible. so far he spent over $10 trillion in three years and next year if he has his way will spend another $3.5 trillion. i remember so well in the clinton administration, i think it was 1995, i was outraged, i came down this to this podium and said can you believe a president has a budget of $1.5 trillion, and this president has spent $10 trillion in this short time. if he hadn't spent all this money we wouldn't be talking about a debt limit increase right now. i hate to sound so partisan about it but it's truly a partisan issue. the democrats have supported his spending and the republicans have not. the boehner plan that we're going to vote on, they're going to vote in the house today and i think we might have an opportunity to vote on here later on tonight, may not be perfect. none of the stuff around here is

perfect but it is good and has dramatically improved over the last 12 hours. it allows the debt limit increase but only after we significantly cut spending. never before have we tied in the history of this country a debt limit increase to spending cuts. but it's something we have to do now and that we are so far into this mess. the first step of this plan cuts spending by over $900 billion in exchange for a $900 billion increase in debt limit. that will last the president to around february and i think it's a fair deal. i'd like to cut the spending more but we can only do so much when we only control the house. the second step of this plan is also good. it establishes a mechanism to quickly consider $1.8 trillion in additional spending cuts between now and the end of the year. it also requires congress to pass a balanced budget amendment to the constitution and accepted it to the states for

ratification. this is something that just happened in the last 12 hours. people were talking about well, we really want to do something, a balanced budget amendment is the only way it's going to be good for now and for the future. and we've been talking about this for many, many years. i remember so well way back in -- oh, the 1970's i was in the state senate in oklahoma when carl curtis, a wonderful gentleman from nebraska, he was a senator, had been a senator for quite some time, he was the perennial author of the balanced budget amendment but he never could get it through but he had an idea. he came to me in the state of oklahoma and he said you know, inhofe, we have been trying to get this balanced budget amendment for a long time and the excuse they use is you're never going to get the required number of states to ratify it. he said i've come up with an idea. we will get 3/4 of the states to preratify a balanced budget amendment to the constitution. to the constitution. that's kind of an ingenious

thing. why don't you be the first state? so i did and we passed by resolution in my state of oklahoma in 1975 i believe it was a ratification of a balanced budget amendment to the constitution that didn't exist. that's kind of neat. and we actually got up to almost three-fourths of the states and some of the other forces knocked it down. that's how long we've been doing this. there hasn't been one year that we talked about a balanced budget amendment that -- that -- that hasn't come up for discussion. well, this is probably the first time that it is a possibility. because we've never been in this spending situation that we're in right now. as i said, $10 trillion in just three years. so right now, we -- we added that just in the last 12 hours and if that legislation passes, the president will get an additional debt limit increase so we're tying it to behavioral patterns and spending and austerity and it's a smart way too do it. this -- this proposal would keep the

debt limit and spending debate at the forefront of the national conversation. we must have this conversation. if we don't, we'll be worrying about things a lot worse than an increase in the debt limit. the president wants nothing to do with this. he just wants to -- a blank check to increase the debt so he can continue to raise deficits. why do i think this? well, if we undid all of his policies today, the policies that so rapidly increased the spending and are killing our economy, then we wouldn't need a debt limit increase. the president's spending addiction is it only -- now, this is unilateral. this is the president of the united states. this was his budget, so it's not a group of people, it's him. and a lot of people are looking -- in washington say, don't any of them really care? well, there's one guy that doesn't and that's the president of the united states. his -- his action are what we're talking about today and we'll look at the failed policies. first, we have obamacare. there it is. obamacare. now, we're talking about a -- right now trying to get

something like $800 billion in all these negotiations so that we can increase the debt limit. in one fell swoop, $1.5 trillion. his plan costs, over the current decade, once it's fully implemented, the ten-year cost nearly doubles to $2.5 trillion. this law dramatically expands the government's influence and involvement in the health care sector and together with medicare and medicaid, it will result in the financial ruin of this great county. so that' -- of this great count. so that's $1.5 trillion. second, we have the failed stimulus plan. we all know that it didn't meet any of obama's expectations. of course, it clearly met all of mine. i didn't expect much. it didn't help the economy a bit. it only expanded the size of government. i can remember when we, down here, even though we were opposed to it, i'm among the most conservative members. senator boxer's a very proud liberal and she and i together tried to have an amendment to take some of the money, the $800

billion, and put it -- a large amount into infrastructure. right now we have to have roads and highways and bridges. that's what we're supposed to be doing up here. and, of course, they didn't do it. only 3% of the $800 billion went for that type of infrastructure. over a trillion of this amount, once you add the costs -- that's thousand would get up to a trillion, the cost of interest that we have to pay for the practice spending. so that's a total now of $2.5 trillion. so you've got your stimulus, a trillion, your o obamacare, $1.5 trillion. then there's the president's relentless pursuit of regulation folegislation for regulation. whatever the president hasn't been able to legislative accomplish, is he attempting to do it through regulation, most of it through the environmental protection agency. now, cap and trade is a good example. you know, we debated that since -- well, since the kyoto treaty was up and clearly the votes aren't there. right now in this chamber, you wouldn't get 25 votes for a cap

and trade. and yet everyone's talking about how the debt's important, we're going to have a cap and trade. so now he's trying to do it with -- through regulations. now, that alone would cost the american people $300 trillion to $400 trillion a year. not just one shot. that's a year. he has his boiler mack legislation. that's maximum attainable emissions -- maximum obtainable controlled technology. in other words, what can we do. what do we have the technology to do to stop the emissions? well, we don't have it. but he as that and, of course, that is billions of dollars a year. ozone regulations, i understand just -- he was going to announce this week a tightening of the ozone regulations that would put 608 of our counties in america out of attainment. i'm from the state of oklahoma, they put 15 of our counties out of attainment.

that means in those counties, they can't recruit industries, they can't hire people. manufacture them would have to go out of business because of these ozone regulations. and it's not even in my opinion legal the way that he's doing it because he's supposed to be addressing it every five years. and when he did it -- and when it was done in 2008, it was done on new technology -- that's a requirement -- and yet today he's trying to do it using the same old 2008 technology. again, extremely expensive. it's cast a tremendous cloud over the uncertainty of the business sector and that's a key reason why it has announced today that the economy's only growing at a rate of 1.3% a year. that's terrible, especially when you consider the recession that we're in. generally, as a general rule, economies recover rapidly when coming off of a financial recession. it's not unusual for countries to grow at 4% and 5% and 6% for the years following a recession. but we can't even get around 2%. this has a huge negative effect on the economy and on the government. the president's regulatory

agenda is the reason for our unemployment rate above 9% and it's the reason that our economy is growing so slowly. and because of this, our tax receipts are way off their historic levels. now, if we can get the economy to grow faster to sustain -- at a sustained period of time, the effect on tax revenues is really unbelievable. i used to say -- and it's pretty well accepted -- that for a 1% increase in the economy, it -- it equals about $50 billion in new revenue. and that's the way to grow revenue. certainly president kennedy knew it. president reagan knew it. and so the best way to increase revenue is to -- is to get the economy moving again. and, of course, increase the -- the economy. if the economy grows at a rate of 1% faster than presently forecast for the next decade, then federal tax revenues would grow by nearly $3 trillion. and i conservatively estimate that the cost of federal revenues of the president's

regulatory agenda has been a trillion dollars. so we have there, through his regulatory behavior, another trillion dollars. that brings our total to $3.5 trillion. then there's an increase in nonsecurity discretionary spending which added up to $500 billion in spending. so we have now the cost of $500 billion and there's expanded and increased spending on unemployment benefits, which are also a consequence of his regulatory policies that have killed the economy and its recovery. and the cost of that is another $500 billion. so together, all these failed policies add up to $4.5 trillion contribution to the federal deficits. since inauguration day, the dealt hadebthas increased by $3. it's on pace to increase by more than $5 trillion by the end of the president's first term f. w-

term. if we undid all of these failed policies, we wouldn't find ourselves in the situation we find ourselves in today. we wouldn't be here today debating this because it wouldn't be necessary. it is because of the president that we are even talking about raising the debt ceiling today. if we could undo the president's policies, we wouldn't need to raise the debt ceiling at all. and where's the president? he's been totally absent from this entire debt conversation. today he's meeting with a terrorist from cote d'ivoire and he's probably going to go and play golf in the afternoon. i don't know. but he doesn't -- he's not around here. he's not participating in this. he doesn't seem to care about debating the debt ceiling. he just wants to raise the deficits. if he did care, he'd see the need for the boehner plan, endorse it and sign it into law but i guess that's too much to ask. well, we're going to have a chance to do this tonight. we're going to have a vote over in the house on the boehner plan i think around 6:00. then it's going to come over here. we'll have an opportunity to do that. and if the democrats will

support, just a handful of them, we would be able to get that passed. so we'll wait until tonight and see -- see what happens. >> the senate has voted to block the john boehner debt ceiling bill. senators will be working on their own version of the debt ceiling bill this weekend, when offered by senate majority leader harry reid. but the house and senate will be in session through the weekend, working on a compromise bill. a obama administration officials say the deadline is tuesday, august 2. we will have live coverage of the house on c-span and the senate on c-span2. earlier in the day, president obama spoke to reporters about the debt ceiling issue. he said there are multiple ways to resolve the issues, but they have to be bipartisan and they have to happen fast. he urged democrats and republicans in congress to come together on a plan he can sign. this is a little over five minutes.

>> good morning, everybody. i want to speak about the ongoing and increasingly urgent effort to avoid default and reduce our deficit. right now, the house of representatives is still try to pass a bill that the majority of republicans and democrats in the senate have already said they will not vote for. it is a plan that will force us to relive this crisis in just a few short months, holding our economy captive to washington politics once again. >> it does not solve the problem. it has no chance of becoming law. what is clear now is that any solution to avoid default must be bipartisan.

it must have the support of both parties that were sent here to represent the american people. not just one faction. it will have to have the support of both the house and the senate. there are multiple ways to resolve this problem. senator harry reid, a democrat, has introduced a plan in the senate that contains cuts agreed upon by both parties. senator mitch mcconnell, a republican, offered a solution that can get us through this. there are plenty of modifications we can make to either of these plants in order to get them passed through both the house and the senate's and it would allow me to sign them into law. today i urge democrats and republicans in the senate to find common ground on the plan to give support to, a plan icahn side by tuesday. this is not a situation where the two parties are miles apart. we are in rough agreement about how much spending can be cut responsibly as a purse step towards reducing our deficit. we agree on a process where the

next step is a debate in the coming months on tax reform and entitlement reform. i am ready and willing to have that debate. we need to put in place some kind of enforcement mechanism to hold us all accountable for making these reforms. i will support that if it is done in a smart and balanced way. there are plenty of ways out of this mess. but we are almost out of time. we need to reach a compromise by two state so that our country will have the ability to pay its bills on time as we always have. but the social security checks, veterans benefits, and the government contracts we have signed with thousands of businesses. keep in mind, if we do not do that, we could lose our aaa credit rating. not because we did not have the capacity to pay our bills, we do. but because we did not have the triple-a political system to match our aaa credit rating. make no mistake, for those who say they oppose tax increases

on anyone, a lower credit rating would result potentially in a tax increase on everyone in the form of higher interest rates on their mortgages, car loans, and credit cards. that is inexcusable. there are a lot of crises in the world that we cannot predict or avoid -- hurricanes, earthquakes, tornadoes, terrorist attacks. this is not one of those crises. the power to solve this is in our hands. one a day where we have been reminded how fragile the economy already is, this is one burden we can lift ourselves. we can end it with a simple vote -- a vote democrats and republicans have been taking for decades. a vote that the leaders in congress have taken four decades. -- for decades. it is not a vote that allows congress to spend more money. raising the debt ceiling simply gives us the ability to pay the

bills that congress has already racked up. i want to emphasize that. the debt ceiling does not determine how much more money we can spend, it's simply authorizes us to pay the bills we already have racked up. it gives the united states of america the ability to keep its word. monday night i asked the american people to make their voices heard in this debate. the response was overwhelming. to all the american people, please keep it up. if you want to see a bipartisan compromise, a bill that can pass both houses of congress that i can sign, let your members of congress no. -- let your members of congress now agreed -- let your members of congress know. make a phone call, send an e- mail, tweet, keep the pressure on washington so we can pass this. for my part, my administration will continue to work with

democrats and republicans all weekend long until we find a solution. the time for putting party first is over. the time for compromise on behalf of the american people is now. i am confident that we can solve this problem. i am, the net that we will solve this problem. -- i am confident that we will solve this problem. for all the intrigue at all the drama taking place on capitol hill right now, i am confident that common sense and cooler heads will prevail. as i said earlier, we are now running out of time. it is important for everybody to step up and show the leadership the american people expect. thank you. >> world bank president, robert zoellick, says congress is "playing with fire on the debt limit." and it that americans should be embarrassed if america defaults on its debt. mr. zoellick served as trade

representative under george w. bush. he spoke at an event hosted by the society for international development, which has chapters in over 65 countries. this is about 45 minutes. >> ok. >> it is a sincere privilege for me to introduce a conversation between two people i very much admire. michael gerston is a former policy adviser and chief speech writer for george w. bush and is not a syndicated columnist for the washington post. he has been a clear voice for development over a long period of time. i was one of millions of inspired on many occasions by michael's thoughts and words, including the 2005 inaugural speech piper that bush. -- by president bush. i have also bought and recommended both of michael's books, most recently, "city of man.: it is about the role of people

of faith in the public square. compelling and interesting. the conversation is also going to be enforced by the fact that -- informed by the fact that michael is part of what he described as a humanitarian conspiracy. -- for the president's plan for aids relief. he was one of the architects for the initiative that has saved millions of lives. i would turn the floor over now to michael gerston. >> it is an honor to be with all of you and an honor to be with robert zoellick. president of the world bank. i get our former allies, bob and i were colleagues. i deeply admire his leadership at the bank. he is a voice for economic sanity and a voice for the world's poorest people. that is a very important global role. it is great to be with you.

[applause] let me start with a question. it is in the news and probably on the minds of the people here. what effect is the debt limit having on the global economy, leadership, and the u.s. political system? >> as i try to think about that answer, let me just start -- mike was kind enough to talk

about some of our work together. my budget career is a wonderful example for those of you who wonder about speech writers. it probably is not generally known, but it should be, that issues such as aids, malaria, sudan -- michael gerston was a constant driving many of these issues. i expect many people had these positions and they take the day today, but they do not go home at night and ask what legacy they will leave. this is something that was very contrary to his view of public service. he served the american people extremely well in addition to being a great writer. >> i appreciate that, but you cannot avoid the question. [laughter] >> as with many events like this, i think there is a short- term and, maybe, a bigger perspective. on the short-term perspective people are playing with fire. the world bank is a pretty big financial institution.

we operate all across the world. we and any other financial institution is coming up with a series of contingency plans, not just the first, but the second and third order effects. this is taking place in a context where you still had the result in serious difficulties. -- you still have the eurozone in serious difficulties. they have put together a package, but it is a long process japan, which has been struggling with growth for a long period time, had a terrible, natural calamity. you have an environment that was already fragile and uncertain coming out of the financial crisis, which many of you know was before the food and fuel crisis. in an environment with the tools people used in 2008, they had basically run their course.

this is a context in which whatever 1's logic about the whatever ones logic about the -- what everyone's logic about the tactics, it is a very dangerous environment. to be blunt, to have a debt default in the united states would not only be a financial calamity, but it should be an embarrassment for america. but there is a medium and long term that i spent time reflecting on because the bank has 187 shareholders, but our clients are primarily developing countries -- emerging markets. what is striking is we are in an environment with the nature of the recovery from crisis. it is multi speed. the challenge is now one where the growth has recovered so well the danger is more overeating or asset-priced bubbles. the developing countries are struggling with spending, debt,

and large-scale unemployment. this creates a tension in the international system. one thinks about the world bank -- it came out of the end of world war ii where people were tried to learn the lessons of economic calamity. if you need some system that deals with trade, development, exchange rates, and capital flows. in a sense, the system is very much in a state of flux because the emerging markets represent half of global growth. in the '90s, it may have been 20%. this does happen relatively fast. the relevance of what is going on in washington, europe, where tokyo these days is that people are trying to decide what should be the norms, the rules, the expectations of the system. other separate we say that for

-- i have to frankly say that for people in the developing countries might work with, it is a little bit of a disappointment and frightening to see the united states, which some people have been admiration for, some people say it has been too pushy -- but to see it basically sidelined itself is a troublesome prospect whether you are in africa, china, india, or others. the bigger picture here is a combination of dealing with the substantive challenges that the u.s. and europe places, but also -- u.s., europe, and japan face, but also a sense about what role they will play in shaping this future international system that has some incredible opportunities. what does not have to look at doom and gloom in this. africa is going on average about 5% for a decade. there are lots of opportunities there. private capital is going there. china has gone 9.9% in 30 years.

it depends on how you look at the world. there are great opportunities, but they have to be seized. we got to figure out how developed and emerging markets work together in a different way than they did in the past. >> bob, another news item that is getting a lot of justified attention is the food crisis in eastern africa where 11 million people are at risk in the current drought. i know the world bank is taking immediate action in the crisis. what can be done to address the longer-term food problem in developing countries? >> well, again, there is the danger an opportunity with this. the opportunity is that if we can increase agricultural and production in the developing world significantly, we can take advantage of higher prices to create higher incomes, help overcome poverty, create a basis for assets and ownership.

we at the bank are trying to deal with this problem by looking all across the value chain. this is everything from research on feed, including different conditions -- climate change, drought, and others. we helped organize something that was started by robert mcnamara in the '70s. the consulting group on agriculture research. it has great potential from some of the research in seed. fertilizers, irrigation, transport systems -- i was meeting yesterday with the president from west africa where the problem is not so much the production, but getting the goods to market. we estimate about half the production is lost on the way to market. investment in storage facilities. again, this does not have to be governmental. we have the private sector that is looking at the value chain

and try to see how to improve the production depending on the country. in monetary terms, the bank was probably investing $4 billion a year in agriculture and now, all of a sudden, $6 billion to $8 billion a year. we coordinate some of the programs that were put together in this area. but, there is also, i think, the phenomenon about how we deal with some of the risk and uncertainty and the price volatility. what people saw in agricultural markets in 2007 and 20008, not only the increasing level, but the sharp changes in prices -- the first up on this -- and we have been working with the g20 to come out with some ideas -- the government should not make it worse. that is that number one. when you have a potential shortage, when countries put on

export bans, you have the crisis in panic. countries will not give up their ability to do that totally, but at least we got an agreement recently that for humanitarian purchasers, such as the world food program, they will be able to access country's foods. this might seem obvious, but during the crisis in 2007, the head of the food program and i were having to call governments to create exceptions. some better information on the quantity and quality of stocks. people are used to this in the united states, but in china and india they have not had this information. information can lead to some of the panic and volatility situations. rather than try to control prices, which is not going to work, it makes sense to focus on those most believable and most in need. -- most of vulnerable and most

in need. one thing we started to learn at the bank act the financial crisis in east asia and latin america, the macroeconomic stability was not enough. you could lose a generation if you did not have the appropriate food and nutrition. literally lose a generation. as people here know, the cognitive ability and potential of children. we have been working with developing countries at different stages of development on basic safety-net programs. when people know you're pretty well, mexico started something. these are called up additional cash transfer programs. -- conditional cash transfer programs. they go to, in a sense, the 10% to 50% most needy on the condition that people send their children to school. it is probably done more for women's health in mexico than anything else in the country. the world bank has taken the small and, in one form or --

taken this model and, in one form or another, and help 40 countries develop it. the reason it is important is this was done in mexico and brazil for about half a percent of gdp. this is a very basic effect. for some countries in sub- saharan africa, they may not have the capability to do that. we work with the world food program and unicef on platforms for dealing with child nutrition and other aspects. in my view, with the ways you have to deal with volatility and uncertainty is every country should have some basic safety-net for those at the bottom. part of the < if you look at -- part of the lesson at the look at the north african countries is they had some very expensive programs. i am not just saying throw money at the problem. we have learned from other developing countries how to create an effective safety-net. i think this will be important because i believe the food price issue is going to be with

us for a considerable time for some structural reasons that i will be happy to talk about if you wish. >> the high prices and volatility -- is a temporary problem? >> good question and i get a lot. what people were used to is a price increase any supply response. but i think the situation we are in now is going to remain with relatively higher prices with risk for a longer period of time for the following reasons. first, wardrobe some of the -- what drove up some of the prices in 2007 and 2008 is food stocks became relatively low. you look at korn and wheat stocks globally and there is not a great deal of push. -- great deal of cushion.

rice has gotten a little bit better, but the problem with rice is it is a rather thinly traded commodities. only about 7% of rice produced in the world is traded. what set of the prices was the -- what set off the crisis was the failure of the philippines. the rice market is better, but it is vulnerable. people started pulling back. it is vulnerable. the basic grains markets have low stocks. normally you'd expect the stops to get replenished overtime, but there is another phenomenon. as emerging markets become wealthier and people eat better and have two meals instead of one male and eat more meat, you are seeing an increase in demand. it is not blaming anybody. it is an understandable process. but it means that even if you have a good harvest, you are not really replenishing the stocks because it is going into the increased demand. this is a gradual process that suggests to me that for a considerable time, we are

somewhat at the whim of the weather event. what happened in 2008 is we had better conditions in europe, -- weather conditions in europe, north america, australia, and others. the pressure on prices and the volatility is going to be a factor for a while. there is one other dimension. we seek closer connectivity between energy and food prices than 10 years ago. the correlation is very tight. some of it is biofuels, but not all of it. part of it -- some of it is energy for fertilizers, transport, and other things. another phenomenon, talking about financial markets, investors look at commodities as an asset class like bonds, equities, or mortgages. now we have commodities. this is a very debatable topic. what we have seen in the studies, these people moving in the commodities market will not necessarily change the trend.

that is based on supply and demand. but it could affect the movement and volatility as money moves in and out of these markets. for all of these reasons, i argued that the g20 has to put food as an issue. it is the basic sustenance of life. it is the core asset of all society. but while we do with the rest and uncertainty,let's also try to make the opportunity on the production side. just to give people a sense of where creativity and innovation -- you can take something and make it more positive. we worked with some sub-saharan african countries on rain index futures. in sub-saharan africa, as the audience probably knows, you only have about 5% of the crops that are irrigated. in south asia is 40%. if you have a good rain and a good harvest.

no rain, you have trouble. you can figure out what rate levels you need to make an assessment of it there will be a good harvest. you can use the nasty derivatives for a good purpose. we are helping a number of emerging markets in a partnership with some big banks to be able to have access to commodities in the futures markets that are commonplace in the united states that you do not have again emerging markets. part of the change in the world bank is how we can also innovate and is markets to deal with some of these risks. >> let me switch topics a little bit to the political situation. there was a house markup this week on assistance where ed took a huge hit -- aid to a huge hit. it is a tough physical

environment for a lot of these issues. how do you make the case, particularly to republicans, that american interests are implicated here, that cuts are dangerous? what is the best set of arguments right now? >> when i have been reflecting on at the biggest level relates to aid, but released to the u.s. in the world more generally -- if you go back to 1947 when another generation, harry truman engaged the united states with the world, and you looked levels of income per person or per family in the united states, they are about 25% of what they are today. if you use gdp as opposed to gnp, it is even less. the individual american as about four times wealthier today than his mother, father, grandmother,

or grandfather was in 1947. in 1947 americans thought the world was important enough to engage in seriously in terms of economic, investment, trade, and security. what does this say about a generation that is four times richer that has to pull back? this is the fundamental decision of other countries. weather priorities. at another level, i make the point that the types of things that the world bank and many others do is move beyond charity that might have been seen in the '50s and '60s. it is that the self-interest. what does this mean? first, i talk about the fact that developing countries are about half of global growth. the more growth we get in developing countries -- you're not going to get it from europe or japan -- you look at the u.s. companies and others that are doing well. they are benefiting from this growth in some fashion or

another whether it be the caterpillars, the john deere's, the services industries and sectors. america is about 4% of the world budget population. if we want to continue to grow we have to be able to market to the rest of the world. what has really changed of what -- changed a lot is the increasing opportunities for investors on the trade side. there is another dimension of self-interest. the world is an interconnected place. it may be diseases -- what happens in one part of the world of banks by another. it may be a sense of values. do we care about what happens in southern sudan? increasingly what one sees in the security area is the interconnection of these interests. we at the world bank published one of our major reports about the challenge of post conflict

of fragile states -- the connection between security, development, governments, a rule of law. afghanistan is not a story of soldiers fighting, it is a question of creating an economically sustainable system where the government owns the challenges of its own country. from topic after topic what i find is -- when i talk to congressman -- there are different groups. there are people interested in security. people interested in economics. the religious community has also, i think, gotten more deeply engaged in these issues. finally, there is a tremendous amount of misinformation. the u.s. foreign assistance contribution is less than 1% of the budget. we are in a difficult budget time. we have to figure out how to take cuts. at the world bank, we actually

got capitalized. we make revenue. we put money back into the developing world. we provide these benefits. we are in a desperate situation than some of the foreign assistance players. that in itself is the logic. the money invested in the world bank is leverage many times pursuing u.s. enters. >> we are going to have opportunity for a couple of questions at the end of this session we have some housekeeping to determine how that is good to take place. >> because we have so many folks in the room, the way we will manage the questions and answers is if you have cards and cables and european, start thinking about your questions for president zoellick now and will collect those in three or five minutes. michael asked a couple of questions what people are formulating that. >> related to this earlier question -- in our current

fiscal environment, transparency and accountability and have never been more important when it comes to aid. you have spoken about democratizing development economics. what you mean by that? >> at its basic level, it builds up what i was saying is happening in the developing world. the mid 20th century view was a hierarchy of experts. the concept of the third world is gone. at a minimum, the nature of these economies is much more you can learn from each other. there are some interesting things that developed on -- economies can learn from developing economies in the areas of private partnership. but the key notion here is that we as an institution play a role that is much broader than providing finance.

our primary -- our primary purpose is to take the knowledge and experience with conditional cash transfer programs, safety net programs, banking programs, and being able to share them around the world and help countries customize it in a way that new markets can use. to do that effectively you have to reach out and get other people's ideas. this is democratization. it comes from a series of experts sources. create a broader dialogue and a gauge on all these issues. one vehicle the bank has lost in recent years that may end up being the most important thing i have been able to do there is we have created an open and vote in this it did. this is an interesting story because i used to go to meetings like this and sometimes a professor would come up to me and say, "u.s. and great and folk sources at the bank, but

you charge for them -- information sources at the bank, but you charge for the emperor "i go back and dr. r staff and asked why we are charging for this. he finally realized it was $3 million extra to help somebody with their budget. what we finally said is, look, this is the public good. we are making it open and available for everybody. we opened up over 7000 datasets and we will be adding to this. they go back decades. we changed the whole mind-set. now we start to had some of our staff come up with different software applications where people can engage and use this. we created a competition where we said to the world, come and bring us your ideas. the only requirement is you use our data and related to the millennium development goal. we had over one of the 20 different contestants.

it opened -- 120 devorin contest. it opened us up to the software communities. the ideas that people came up with work things that i intend years with smart people in a room we could have never come up with. the notion of democratizing development is it only works if people owned it. it cannot come from outsiders alone no matter how well intentioned. if you start to share the information, if you start to engage people with their own perspectives and and sold -- and solutions, you have a much better chance of learning what works and what does not. you have a better feedback loop. you are engaging the community in the process. frankly, opening up the bank to networks of people who were not part of our broader set of partners.

it also starts to drive you to think about things. we will do a report on gender and development. we start to say, well, it is hard to know the offense of this is people are not keeping the data on gender. now we open up the gender data initiative. what i find most, just to give you an example of what this could do in real life, you can go to our website and punch up a country and you can see all the projects we have all in the country. you can push each project and learn what is going on in the project. by the end of the year, we will have this. what i would like to do is move to a world where people with a hand-held device could begin to interact with that. you think this is what the results are, but this is what we see in the village. this is a whole transformational flat -- flattening of what was traditionally seen as a

hierarchical system. i think it reflects what is happening more broadly in the world. >> let's get to a couple of these questions. in many developed countries there are issues with property rights. people do not have documents on their property. how does it affect domestic development in poor countries and what did the international aid community do about it? the questionnaire is exactly right. property rights are fundamental always making the point recently on gender. you not only have to think about basic property rights, but who gets property rights? if one of the issues in the gender area is in some countries women do not have access to property. it transforms the whole economic development process. sometimes, and this is, again, learning from experience is as opposed to textbooks -- one of the programs we did in ethiopia was intriguing. on the property rights document, we simply created space for

another name and picture. it vastly increased the registration for women as well as men for property. a simple change. at the same time, property rights issues -- we work with countries on land registration schemes, of doing business environment, and improving the investment climate for other types of property. we mention the role law and legal systems. these are all components of having the use of property rights. at the same time, and this is where the customization is important, some countries have had different types of tenure. sometimes it was a tribal or timidity tenure. you also have to figure out how to work with the city did issues as well. it is part of the broader point i was making. while we are a big financial planners -- player, our real affect is by building these

institutions and markets. it may be the property rights to have an effective micro finance or microphone credit or other aspects. ultimately, it is an empowerment agenda. the ultimate power for everybody is to own something and be able to build from it. >> here is another -- can you share some ideas on working on development in the context of civil strife? all add to that -- i was just in south sudan. it was a remarkable event after happy century of civil war. a -- huge pose conflicts challenges. i would also recommend the world development report on this topic for this year. what are some of the lessons you have learned about working in conflict emperors were conflict in their situations? >> let me start out with the perspective on this. this is a topic that interests me.

what i was always struck by was that you had people who focused on security issues. you had people focused on development issues. but they really were not interconnected. in the sense of the bank, our original name was the international bank for reconstruction and development. it was for part of the recovery of europe. for me, it is the reconstruction issue of the 21st century. how do we interconnect these topics better? as in a lot of problems in life, it is an art, not a science. one of the key dimensions would be the importance of basic security, creating inclusive

enough coalitions -- this is an important concept. you may not be able to get everybody in a society, but from a political view, you have to get a critical mass that news the issue for. yet to get early results. let me give you an example of where this may seem obvious, but it is often hard to achieve. when i talk to security people in the country, they want a job fast because they want to show progress, they want to stop young men from going back to violence. you talk to economist and they say, let's make more jobs. we have actually learned a fair amount, which we are trying to apply in north africa and other places, about ways you could do more rapid job creation in a way that does not interfere with building the private sector over time. for example, it may be a food for work program. you get some basic sustenance

and you help build the local effort structure. the importance of local partnership -- in the case of afghanistan, the u.s. and others have struggled with big ever structure projects. -- infrastructure projects. the national solidarity program has probably been the most successful you may have some small sums of money, but they decide. is it irritation? is it a school? this develops a sense of ownership. frankly, in some other situations, people would be willing to stand up and protect their community against those who may otherwise threaten a school or operation. this is a field where it also requires the bank to integrate more effectively with some of the un players, regional bank players. of the security side, i think we

are seeing the importance of regional security. i met with west africans yesterday. it is very important in west africa. what i find interesting in your point, michael, is that i am finding these topics are very interesting. it reflects a problem that you see to our development, which is sometimes people operate in a rather tall categories. i will give you another one. the humanitarian and development community and do not interconnect affectively. we need to figure out, for example,