organizational changes to the agency that will help us operate more effectively. we are doing everything we can based on everything we have. the government is a fascinating process. it has been very interesting and disposed of very interesting management challenges because of the differences between government and the private sector. host: let's take our next call. caller: back in the day, when i got out in 1968, coming back from 'nam, i was informed that you had to get three refusals from the bank, but that is not what i call. i wish sba would work with governors to establish some sort of system where local guys trying to go into business have

some kind of assets available through the state, because it is pretty obvious that the federal government is not going to be able to help our governors in 10 years. i just drafted an e-mail to my governor in connecticut suggesting that he get together with sba and other people to see if they cannot get more of our tax dollars in the state of connecticut -- keep more of our tax dollars in the state of connecticut. some negotiable funds that we personally could take as tax deductions as well as contributing to the economy of our state. i don't know what you think of in idea, but i've been business, and trying to go through the sba, unfortunately, i could not get the three bank refusals gbut i wish you would comment on that. guest: thank you for your

question, and you raised a very good point about the federal estate partnership. those are absolutely crucial. we are actually doing important work in that area. small business jobs, like i mentioned earlier, gave the sba a number of tools to strengthen our ability to help small businesses, particularly ied area exporting. in the next few years, 95% of market demand will be outside our country. it is imperative that small businesses are equipped to do more in the area of exporting. we are working hard to make that happen. something we will be announcing within the next few weeks is the state trade export promotion grants that were part of the small business job act, where we will put $30 million in state hands, and every state that applies for the grant will receive funding to allow states to have better capacity locally in order to support small

businesses who are interested in exporting. that is one example of a federal-state partnership that i hope you will take a look at and we will -- and will see the benefits there. regarding the loan application and the process that you described, i am not sure when you apply for a loan, but for anyone who is with me, -- anyone who is listening, if you apply for a loan through the sba some years ago, there definitely is of benefit to trying again. it is a new sba. many of the processes of change, and the requirements. i encourage you to contact your local district office and give it another try. host: we have a question that combines small business loans and congressional oversight. the person you will hear from is a dairy queen franchise owner in texas. >> small business creates six out of 10 jobs and in the country, and if we don't have

access to credit, we do not have the jobs we need. we think there is a 20% shortfall in lending this year, and the sba has been critical i fulfilling the knee, but we are still 20% short. host: what is the 20% shortfall he is discussing? guest: actually, i am not sure what he is discussing with that 20% reference. but what i heard in his message is how critical the sba's role is in providing access to capital. host: in filling the gap. guest: one of the benefits of the small business jobs act is the ceiling size on our major loan programs, 7a and 504, was raised from $2 million to $5 million. it is very important for individuals who have manufacturing firms are

franchises. they needed a larger loan size. however, more small businesses need $10,000 line of credit, $50,000 in order to purchase a new piece of equipment. the jobs at also give us the ability to increase the loan limit ofor microloans from $35,000 to $50,000. earlier this week we announced 20 new micro lenders around the country, and those really are very important resources for small businesses because while the gentleman from texas needs a larger loan because he is the franchiser, many more businesses are looking for capital in the range of up to $2,000 or less. we are exciting about giving those opportunities -- the range of $50,000 or less. we are excited about giving those opportunities are around the country. host: you mentioned at

counseling. this is in that category. is that under the rubric of counseling? will you help develop it ended the market research? guest: absolutely -- will you help develop it and do the market research? guest: absolutely. there are 900-plus small business development centers and experts in a number of different industries. market research, a business plan development, that is at the core provide, as's can well as the score counselors. we have women's business centers that have been very effective in helping women develop business opportunities and growth companies. women are -- women-owned businesses are among the fastest-growing segments among the business community. i would urge her to contact the sba, a local resource in our

community, and asked her to help get to work. host: type in your zip code for the nearest facility that can help. let's go to detroit next. this is a call from alberta, independent there -- albert, independent there. caller: the way it is going out with cutting wages for income for the poor, those are the people who buy stock. if you cannot purchase products or services, they cannot afford stuff. if they ask about small businesses, and she is -- is. a lady asked about small businesses, and she is right. guest: as i mentioned, in the response to the earlier question, we are always looking at size standards as an issue. this is a very important input. thank you for that.

as it relates to the economy in general, and you mentioned difficulty for people purchasing items and so on, the president actually agrees. that is why, now that the debt crisis debate is over, finally, he has turned his attention strictly to jobs and the economy. we in that sba -- ikn the sba had been focused on that since the beginning. i am confident that as it small businesses are able to get more resources and grow and create more jobs, that is going to have the opposite effect on the economy. -- the uplift effect in the economy. it has happened before. we cannot climb out of the whole we are in overnight. but we are moving in the right direction. that is why i am also encouraging folks who had not thought about starting a business previously to think about it now. now is a good time to think about starting a business and

growing your own opportunity in detroit. i would urge you to do so. host: our next call is on the small business owners line. caller: good morning, how are you doing? host: good morning. caller: the guy from connecticut and the guy from michigan is right. i and having a problem -- i applied for an sba loan a few years back, and you had to go through that same thing of having three turned-downs. a year ago, when president obama put that stimulus package in for the small business owners, that was ate up within three days. i went in there, and they said it went to a small bank. but the time you go to small banks, their policy is that you have to meet with them for a smaller time. that did not work. after we go to sba and did all

the paperwork, but they said meet the same bank that turned me down. -- they sent me to the same bank that turned me down. i have been in business since 1966. now they're telling me that since the economy is that i have to have good credit. if my credit is not good, how do you do that? i have been having such a hard time paying my bills. what is it that i can do to keep my business going? it just seems like it is so much -- host: sounds like you're being caught in a cycle. caller: yeah -- guest: thank you for your question. two things i would recommend if you have not looked into that i don't know how much money you are looking to get for your business, but i mentioned microloans previously. by lenders are a very good resource for small businesses and a -- micro lenders are very good resource for small businesses in the range of $50,000 or less.

they tend to be smaller lenders, very focused on the small business community, i understand the community and often have a different lens on how they look at a potential borrower as opposed to a large bag. the other resource i would ask you to take a look at is community advantage. it is a new loan initiative the sba rolled out a few months ago. for the first time we brought non-depository lenders into the program. those are cdfi's or microloans intermediaries, community development companies. again, these are local, they tend to be smaller lenders who are very connected to the community. they are mission lenders in that edition -- in addition to being lenders, the they provided technical assistance and counseling. they are also lenders who generally have a different and more tightly tuned lens to the

small business community, as opposed to a bank that may not be invested in the community and may not know the small business landscape as well. community advantage and micro lenders, those are two resources i would ask you to look at to see if those to be of assistance to you. host: more from the committee on the small business jobs back last year -- small business jobs act last year. at the time of its creation, the finance committee thought it would lead to the creation of half a million jobs. how has it done? guest: the small business lending fund is one of the few provisions from the jobs act that was not within the sba's purview. that was the role of the department of the treasury. the small business lending fund got a bit of a slow start, but

treasury has recently announced that community banks are around the country have access to some of the small-business lending fund portfolio. we are expecting out to see more traction -- we are expecting it now to see more traction because money is finally out there and available for use. host: a couple of callers refer to the three refusals. is that still part of the procedure? guest: i don't believe so. i made a note to myself to check on that. i urge people, depending on when they came to the agency, and they could have a very different experience. it they have not been in touch with the sba within the last two years, i would urge them to be in touch with us, because we have a lot of new things going on and a lot of good opportunities for small businesses to support growth and job creation. host: quickly, let me take a call from massachusetts. eddie, .

-- eddie, republican. caller: you mentioned that the dishwasher -- in europe, the dishwasher is considered an apprentice. he is not even pay. here we have to give him all wage. host: eddie, just because we are almost out of time, we will take the points, the effective minimum wage and corporate tax rate on small businesses. guest: the president has recognized that the tax burden on businesses is an important factor in their ability to grow, and that is why he signed 17 tax cuts into law since he entered office. as far as the minimum wage, that is an issue that is constantly evaluated by congress, but what i would -- i'm not sure where eddie was going with his point -- host: are small business owners under a certain threshold subject to it? guest: employers subject to

minimum wage? host: if you bought two employees. there is no threshold. that is a good thing, in your estimation? minimum wage law? guest: minimum wage laws are in place for a reason. yes, that is a good thing. host: business line and. james, south carolina. caller: yes, i am here. i have dealt with the sba before, and my main situation i have run into -- i have been in business for myself beforfor ye. i'm an electrical contractor. the paper work is so immense whenever you deal with the government program that is difficult for a startup. if you are a small business, you have to get out there and work along with everything else. but counting, whatever needs to be done. it is too much paperwork involved.

it really is, i think, from my experience, the sba deals more with medium-sized business. also, ms. johns said she worked in the private sector, but the private sector is not a business owner. i would rather a business owner be any charge of such and organizations like the sba. guest: i just want to let the gentleman know that i am a small business owner. i started a small business after i retired from verizon. regarding the paperwork, you are right. we have made some improvements in our paperwork, streamlining our processes, but we know we have more work to do in that regard. i mentioned our advantage loan products earlier to one of the advantages of the loans is that we streamline the paperwork and processing time. in response to what we've heard from individuals like you, that

we needed to do that. we know we have more work to do in that regard and we have a initiatives being rolled out in the near future that we'll address that message straight we are working hard to use our technology and make our paperwork -- the requirements of the paperwork are not up our own making, but because of the law, we afterclaps certain information. but again, how we can streamline the information it and make it easier for business owners like yourself, james. host: appreciate you taking calls, and it was also good to hear from small business owners. guest: very good, always good to have that input. host: since it is a congressional right, we get to be here for the full time. our next guest is a political science professor from george washington university who will tell us about the history of the

special committee's and how this one might function. >> every weekend, american history tv on c-span3 highlights the 150th anniversary of the civil war brought this week, one of the most important documents in our nation's history, the emancipation proclamation. and albany law school professor on abraham lincoln and the proclamation's constitutionality. >> this weekend on a booktv on c-span2, the life and times of clarence darrow. on "after words," the british citizen who fought for the union and it confederate ss.

"in depth," ann coulter. look for the complete book tv schedule at booktv.org. and sign up for the booktv alert with schedules in your inbox. >> c-span radio features more of the lbj tapes. final releases from the johnson library. this saturday, the conversations between the president, secretary of state dean rusk, and the senate armed services committee chair richard russell. >> i am trying as hard as i know how to get the peace in viet nam as quickly as i can. for that reason, i am not running. >> this a nationwide on xm satellite channel 119 and online at cspanradio.org.

"the supreme court close what is now available as a standard and -- "the supreme court" is now available as a standard and ebook. it includes an interview with the latest supreme court justice, elena kagan. available now or ever e-books are sold. "washington journal" it continues. host: let me introduce you to sarah binder, a political science professor in washington, d.c., at george washington university. she is also at the brookings institution, a fellow in governance studies. our topic is to learn more about the experience this country has had with special committees and commissions, such as the want it has now created for handling the data and deficit -- handling the debt and deficit. i was struck by a headline in this morning's "washington

times." "politics in every choice facing deficit panel." my reaction was, as in every committee -- hasn't ever committee at truces to make? committee haty choices to make? guest: absolutely. just because the committee is treated as not make the work any easier. host: they have been around for a very long time. even in the 1800's, congress was creating a special committees. do you have a sense of in the modern age how often at they have been successful? guest: if we had a comprehensive list and were able to figure out which ones work and which ones did not, the larger history is that they tend not to work could having said that, if we really had this list, they would be apples and oranges. some have the statutory authority. congress creates them.

some of the president creates through executive orders. obviously, this cannot have much authority. some are members, some are private citizens, some are mixed, some equally split between bodies, some of the role of entitlement. in the end, we have a couple of successes and we can learn from the examples where they did succeed. but by and large, just creating a committee does not lead to success. host: your writings suggest that every decision about how congress sets it up as an indicator of what its likelihood of success might be. to construct a statutory -- the concept of the statutory is important. is this considered a statutory committee? guest: absolutely. it is written in statute. congress passed a law. it establishes the committee, and many democrats there will be, how many republicans there will be.

there are deadlines set into law. it is not say much about the jurisdiction break and be pretty wide-ranging trade taxes, spending cuts, entitlements. everything is fair game. if it gets a bipartisan vote, then the house and senate really are forced to vote up or down on the package. it is an event that most of these committees and commissions will never have -- it is an advantage that most of these committees and commissions will never have a. host: you suggest that most of these are an obvious effort to kick the can down the road, structured in a way that nothing is likely to happen. but this one, because it is written in statute and has a trigger mechanism, what does that suggest that congress' intent is? guest: keep in mind that there are all eyes on congress in reaching this deal. if you don't come up with a credible commitment that we trust you are going to address

these deficits, we are going to downgrade the debt. in creating this committee, kicking the can down the road is pretty usual. but if they fail to reach a decision, there will be these triggers with automatic cuts in defense spending and entitlement spending. that is what is different here. members fought down the road that there could be a lot of deadlock. there could be deadlock in this committee. these members an incentive not eo deadlock -- let's giv these numbers an incentive not to deadlock. host: what we are focusing on is the construct of the special committee congress is setting up where all members of congress -- the appointments have to be made, report back and it has the trigger mechanism. if you have questions about it,

if you laugh, it's about it, if you watched other committees and commissions -- if you have comments about it, if you watched other committees and commissions created in the past, we have the addresses on the screen. you mentioned others we can look to as good examples. what are they? guest: by most accounts, brac, base closing realignment commission, established by law in the 1980's and 1990's, set up the process of closing military bases that were obsolete, or whose purposes could be moved to other installations. congress authorized an external commission to come up with a list of bases, run it by the president. if the president signs off -- he cannot pick or choose -- those go into effect, unless congress chooses to reject the entire list.

getting their hands on it, picking it apart -- is a pretty big commitment if there ever was one. there were two or three rounds of a very successful base closings, because congress tie its hands so tightly guarde. host: my memory of the brac hearings -- we cover all of them -- was the date of the final decision, how communities were covering it, because of the effect on their own community. do you expect that this commission -- that was not televised, so let me use that as a segue -- that was all televised, so let me use that as a segue. how often do it all-member committee's work at a public? guest: we have sunshine laws where we have to do the business

in public where it is typical to close the doors. there is a lot pressure for members to open the doors of this committee. course, the more transparent and the more sunshine offered, the harder it is to reach compromise, because everybody stake out positions, and i would actually hope that this summit -- that there's some degree of closing the doors to make this process work. host: let me move to the members. how many lawmakers will be on the panel? guest: committee of 12, six democrats, six republicans. host: is a majority vote or unanimous vote? guest: the requirement of the law is a majority vote. host: 7 members have a lot of power. guest: they do. of course, their decisions are subject to an up or down vote on the chamber floor. host: how the members selected? guest: they tell the speaker of the house, the majority leader

and minority leader of the senate, each of you choose 3. host: let me go back to the article started with. "within two weeks, the leaders of the house and senate will name lawmakers for the committee. no leader can afford to appoint a wild card might stray." guest: absolutely. this has been out of discussion, other ways in which it they might and the appointments year. -- it had a discussion, otherwise i which they might have done the appointments here. they want some certainty, greater certainty about what the committee is going to do. host: montana, first up, jack, a democrat. caller: my concern is that lots

of members of the republican party in congress have taken this grover norquist pledged not to raise taxes under any circumstances. don't you think that is an inherent conflict of interest for someone to serve on the commission? guest: well, it's certainly complicate the work of the committee if there are members who, in with clearly stated -- who come in with clearly stated public positions to not raise taxes. having seen at the negotiations between john boehner and obama, the gang of six in the senate, there are lots of ways in which the committee might come up with the revenues to reduce the deficit that don't explicitly in all -- involve interest rates themselves or individual tax rates. there might be more room for compromise than meets the eye, but i think you are tapping the concern here that we don't want the cake baked before you put it in the oven.

host: going back to not appointing a wild-card -- "the leaders have an incentive to name loyalists who follow party orthodoxy -- self preservation. no one wants to lose seats in the next election or as a rebellion by rank-and-file lawmakers that might cost them their leadership posts." the tea party. guest: absolutely, and it points to another element, the difficulty reaching decisions in the committee, not just policy differences. not just differences about how much to cut or where to cut. those you can find compromises over. i want $100 billion, you want to hundred billion dollars, we compromised at 150 billion -- you want to hundred billion dollars, we compromise at $150 billion. it is really hot, given the control of the house and senate and control the white house up for grabs and others come up for

election. host: a tweet -- guest: well, i think there is some hope by legislators and lawmakers who set this up that perhaps there could be an alliance in this group. selecting the members really makes us scratch our heads about how much room for compromise there really is. host: connecticut, or republican gues. caller: the question i have for the professor -- hello? host: willis 9. calle -- we are listening. caller: she mentioned that once

they send the report, the congress cannot do anything but an up or down vote. i don't understand that, because i believe congress can amend anything they want. i don't quite understand that. guest: it is a very good question, the authority congress has to delegate and make choices. of course, the constitution says, article one, that the house will each have their own right to set their own rules. the framers did not want to micromanage how congress is going to do its business. the house and senate want to create a role and our committee, constrain the right to amend a bill, that is really within the bounds of their authority, and that is precisely what is going on here. justice that the senate -- just as if the senate has a rule that you need 60 votes. host: tyrone is watching us in pensacola, florida, an independent. caller: it is interesting, and i don't know if we can

characterize them as an in- group, because it seems to me that they will take people or like-minded. the republicans will have like- minded people, and the democrats. all we really just taking this fight, taking the ire the public is directed towards the speaker and the president and democrats and republicans and focusing it on to all people -- on 12 people and we will have the same kinds of results and bickering and in fighting the experience in the republic debates we have seen thus far? guest: again, i think that is a very reasonable concern. the politics that lead to deadlock or deficit reduction deferred to these committees and the first place in. of the conflict we see in the chambers. having said that, this is a little different. this as it triggers of automatic spending cuts if the committee fails to act. those triggers are supposed to be draconian and half that it

induces compromise and an agreement in it -- draconian enough that it induces a compromise and an agreement in the committee. it gets much, much harder for them to throw up their hands and say we cannot solve the problem. vivian, an -- charleston, south carolina. are you there? caller: yes, good morning. thank you for taking my call. my question is regarding the trigger, with regard to making a decision as to if that they don't come up with an agreement, regarding the entitlement, that there would be a reduction in entitlements, as well as defense spending. guest: yes? caller: is that going to work? it are they going to be forced to do that?

how is that going to help revenues? i know that is not a part of it, but how is it going to increase revenues? guest: well, clearly, by cutting spending, that helps to reduce that deficit. is the trigger going to work? that really gets to the heart of the problem here at the challenge here for this committee brought some people speculate, is it possible that some, for instance, republicans on the committee, is it possible that some of them might prefer these very, very steep cuts in defense department budget to a package that actually includes the closing loopholes? is that possible? is it possible that democrats would prefer draconian at medicare cuts, given the alternative of what could come up in a grand bargain? of course, the cuts -- if the trigger were to come down, those don't go into effect until 2013. there is the possibility that congress could revisit the

decisions to avoid the cuts. it is a little harder for them to undo the package here, but it is always, of course, within the realm of possibility. host: within -- when they get to the annual appropriations process, could they make different suggestions that what the committee suggest? guest: they at contrib -- they could. the law sets caps for the first two years, but the decision on which programs get cut, which ox gets gored -- there is a lot of politics still to come over the shape of these spending bills. on the alanet simpson and bowles commission. are they likely to provide a framework? guest: that is definitely at the

hope of economists and others who have been looking at what is going on here, and it turns of the likelihood -- in terms of the likelihood coming out of a good deal, grand bargain. the bulls since then commission -- the bowles-simpson commission laid out a plan, and there was the rivlin-domenici commission and others. they are not starting from a blank slate here. the work of these commissions could be quite valuable. host: let me ask about one commission from a generation ago that dealt with that social security. in 1983, alan greenspan was asked to chair a social security commission appointed by congress and the president looking at options for the viability of the social security, which led to the social security reform act of 1983. house that looked on in history? the success or not a success?

guest: there was the thought that it saved social security from the brink of collapse. the social security commissioner early on said that the commission pretty much in deadlocked. they had findings and and they knew there was a crisis brewing. president reagan stepped in, tip o'neill, the speaker, stepped in. they brought it to the commission and the commission agreed. would give the commission cut it with working. it is part of -- the story -- we give the commission credit with working trade is part of the store, but it took political intervention to make it work. host: what are the lessons? guest: there is something with the committee by giving it a statutory authority, by treating triggers -- creating triggers.

it stacks the deck in favor of the committee. but it's a guess that in the end, given -- it suggests that in the end, given that the parties are polarized, it is hard to see a grand bargain without the president and the speaker and the majority leader in the room to hammer it out. host: sour reminder political scientists and has the -- expertise s -- sarah binder is a political scientist and has expertise in the structure of government. we're talking about special committees and the want congress has created for the debt. eric on the republican line. caller: thank you for taking my call. i have one question and one comment. under the constitution, it is mandatory that all revenue bills originate in the people's house, the lower house, the house of representatives.

in as much as there will be senators involved in this bill, on which you must vote up or down, i do not understand how such a hybrid bill would conform with the mandatory requirements of the constitution. the comments i have stems one of frustration i have 1 people say that the rich should pay their fair share. the most recent 2010 irs table indicates that the top 10% of all taxpayers by 70% of the total tax bills -- pay 70% of the total tax bills. i do not see how that is unfair . host: the second is a politics question which we will not answer, but the first is on constitutionality. guest: if you are in my class, eric, you would get a write off

the bat. the committee is authorized to come up with the plan, but it has to be introduced as a bill in both chambers. if there were to be revenue raisers in the bill, i would assume that we would have the house a bill be the vehicle for subsequent congressional action. congress has a way of getting around this problem. we have seen it periodically, but this should be relatively straightforward because the bills have to be introduced. there are no joint bills per se. host: this is a comment from frank, watching us in texas, retired from the u.s. army for 30 years and an independent. guest: that is a great

suggestion. as i was thinking of other ways to set up the committee, that is a great idea. host: but it is not going to happen. guest: not going to happen. the leaders did not want to lose that much control. we have democrats willing to entertain entitlement cuts, republicans willing to entertain revenue increases, and the leaders want far more control than they would get in it looking members from a pool -- plucking numbers from a pool. host: "the appointees with likely half budget expertise -- have to have much expertise." guest: fair enough. having said that, we have expertise in congress, we have simpson-bowles.

i suspect it it will not hurt for expertise. the fresh air of new players is what congress needs to make a decision. host: long beach, mississippi, pat. caller: good morning. looking at it from a historical perspective, we have been here before. the problem that i see has to do with whether or not the aristocracy over there in new york and washington is willing to really fight the real problem. the country is capitalist, but the government has never had to worry about any income. ever since they for the of the herld war ii -- forgave te world war ii debt, the politicians and administrators have always been able to give raises.

that is why the government cost so much, that is what the property values in that area are so high. there are too many people laid- off. laying off entire departments, like i hear people want to do, it will just cause more problems. we get more and more laid-off people into the food pantry. is there any hope that they will say every politician or anybody making over, say, $60,000 in the federal government who has the decision authority will take half a percent pay cut per year for the next 20 years and get back to paying where they should be if that they had to do something else besides borrow money? host: ok, pat, thanks. guest: absolutely, federal

employees have borne some share of recent efforts to cut the deficit. members of congress will tell you that they have frozen their pay. it is hard to be sympathetic -- hard for them to make that case. these are really tough questions. there is no getting around that. the conflicts within the house and senate represent the difficulty of how to finance the government with all these demands, particularly in a poor economy, when there is disagreement about what the role of government is in turning around markets. it is an almost insurmountable problem. host: columnist charles krauthammer writes about the super committee. he believes it can be a success. he concludes, "the result of such a grand bargain would be debt reduction on a scale never seen. world confidence in the economy would rise dramatically.

we would be on the road to national solvency. could be done in three months. in three stages." is there any experience at the committee operate on this short a framework? guest: that is a good question. i'm having a hard time coming up with a committee that has been given such a short deadline. not to say that members are not always under the gun, given the annual budget an annual spending process. but it is a rather large charge here for this committee. again, as you said, there are plans on the shelf so they are not starting from scratch. certainly, the time constraints here are going to keep pressure on members not to deadlock so easily. host: many have their own staff they have to hire. the time frame does not seem to leave enough time for them brought out with the administrative part of this be structured? -- enough time for them. how would it be administrative

part of this be structured? guest: i am a little less worried about that, given how much effort has gone into, in all of these committees -- i'm a little less worried about that. the m -- i am more worried about the deadline of having to reach an agreement and reaching it fast. host: and the framework of the being put in place without all the members -- guest: absolutely. that is all underway. host: kansas city, barbara, democrat. caller: i have a comment and question, and i will be brief. i believe that the gop has been the pied pipers of negativity since they took office, and that is what brought down consumer confidence. i wonder if this committee -- you now, the republicans lay

theinicking and screaming on congressional floor until they got away, and i wonder whether this committee, since what republicans want to do is have that deep cuts, if they hold their breath so nobody will agree on the committee, it will automatically get the deep cuts they what. i don't see how the democrats can win anyway, because all republicans have to do is just don't agree, and then the deep cuts they what will happen any way. the man who said that rich people pay 70% of all the taxes -- state bank probably have about 70% -- of all the money they -- they probably have 7% of all the money. of all the money, so that is fair. with the tax increases if they don't agree, or is it just cuts?

guest: you put your finger on the question that everybody in washington wants to know, what will happen with this committee? what will it take for one democrat to cross over to six republicans, or vice versa? what has to be kept in mind here about the republican strategy -- are they going to dig their heels in? will they refuse to do anything besides spending cuts? if that leads to a 6-6 vote, the republicans have to weigh the danger of defense cuts. there are divisions within the republican party between defense hawks and republicans who are more committed taking tax revenues of the agenda. -- off the agenda. host: we showed the new cbs-"new

york times" poll. how is the establishment of this committee play into member's understanding of public perception of congress' work? guest: there are a couple of things that drive people's views of congress. people's views of congress are never very good, even aftt the highest. it peaked after 9/11, rally- around-the-country effect. first, the economy, and that fact we have this committee is a direct consequence of the state of the economy. so it is not surprising to see perceptions of congress so low, given unemployment and low growth projections. one element of public's views of congress is that the

public picks up perceptions of how well congress is working. when congress blocks, and certainly -- that has been this -- when congress gridlocks, and certainly that has been the story for the past few months or so, when congress still -- >> perception goes down. we should not be surprised, but it is no less troublesome that the legitimacy of the institution is called into question. host: rosalita is remembering when tom coburn walked out of the gang of six. i think that is a little harder to do this time around, just because of the formal character, the statutory character of this committee, and how much attention is being paid -- host: as opposed to these frequent gangs, which are in

formal comment -- informal comings-together. guest: much more freedom to do that when it is informal institution. host: you are on the air. caller: i was reading that this super committee -- they had the power to make up any kind of bill or law and congress votes yes or no about it, and if congress disagrees, the president can still vote yes and make it happen. i'm wondering, how are we having a republic if a small group people and the president cannot dictate what it is that the laws of congress, and by extension, the people of america, have to go along with? i am not understanding how we are keeping our democratic republic if we are able to be told what we have to do. or maybe i misunderstand what this super-congress is all

about. guest: excellent question. it is an almost a regular legislative process, but it does limit what goes on on the floors. the house has set up or down vote, the senate has an up or down vote. if it passes both chambers, it goes to the president's consideration to sign or veto. were he to veto, it would go back and they could override the veto. in many ways is a normal legislative process, just altered at the edges here. host: why can you not see at ivy oak happening if there is a mix of cuts the -- is not acceptable -- why can you not see a veto happening if there is a mix of cuts not acceptable to the president? guest: he has to think about

his reputation, whether he can govern, the attack on the economy. we saw the stock market completely tumble this week, some people say because of congress' inability to solve the problem. it might get one or two democratic votes, and it is not clear to me that this would be a far-right package that the president would want to veto. if it makes it out of the committee, it would have some support. host: j.d., independent. in regards to the committee that is going to meet about these cuts, number one, do they know the difference between an

entitlement and social security? they are two different entities, number one. social security was paid for by everyone who worked, and they expect it back, and yet there are iou's that are just basically a piece of paper -- host: ok, that other question. caller: second question, regarding defense cuts -- now, they can withdraw -- there are places we can withdraw troops from -- i am an army retiree myself. we have troops in germany. we don't really need all those troops in germany and italy and places in europe. now, korea is a difference of course, because we are still at war tactically with korea, because nobody signed the surrender agreement --

host: what is your overall feeling about defense cuts? caller: how that affect the decisions with defense cuts and so-called entitlements? guest: your first point about distinguishing between medicare and social security as sources of revenue, i think members and senators are quite aware of that. in fact, that difference has led to disagreements over setting up these commissions or committees in the past. before simpson-bowles, congress tried it to start the process of setting up a committee, and it foundered over the issue of social security and mr.. was it ver >> -- social security and medicare. it was a very difficult issue. as to the appropriate level of defense cuts and what to cut, these are questions congress will have to address because not only will the super committee have to address that, but

it caps, the killion of dollars of cuts are going to come partly from national security areas. these are not issues that congress can doubt. these will come out rather quickly, rather soon brou. host: let's take another baltimore caller. intended. -- independent. caller: good morning to both of you. a lot of noise to sift through. i think that at the end the day, the cuts are going to have two effects. there will be relatively more poor people and relatively wealthy people that are less rich. people more poor at the outcome,

relatively less rich. it makes me wonder what the political advantage the roman congress was trying to gain when rome burned. did they select committee to study it? it's very frustrating. guest: i take many, many people share your frustrations with the difficulty congress has reaching agreement on these tough questions. how to bring the budget into balance, closer to balance, how to reduce $14 trillion of debt. many ways to do it, and the frustration you see about the choices congress is making, what people call the lowest common denominator approach, people find it very frustrating. these questions are not going away. host: we talked about defense spending, and questions came out in yesterday's press conference by the chairman of the joint

chiefs and secretary of defense leon panetta. my question is, looking at these commissions and committees, what is the likely intensity of lobbying, either de facto, such as this is, or lobbying on the hill? guest: there will clearly be a lobbyists of all stripes, many policy areas converging. think of all the lobbyists and interest groups that went on over health care reform. hospitals, providers, recipients and so forth. medicare is just one potential part of the issue here. we have defense lobbyists, we have lobbyists from across the board. it is going to be pretty intense. having said that, members, i think, are used to the intensity that comes from pressures from outside. in many ways, it is not new.

it is concentrated in the period before the committee has to report. host: among the 86% -- we have just eight short time left. birmingham, alabama. ted, not much time here. caller: how much power to these 12 men have over the president, or do they have the power over the president? guest: well, i don't know that -- think of it this way. these 12 members are setting the agenda. they are putting out, in theory, a proposal. it cannot be amended. in that sense is quite powerful. those who set the agenda had a leg up here. what goes on in the committee is immensely important. it's certainly constrains other

players in the house and senate who otherwise might have the opportunity to amend it. when you delegate authority like that and protect the decisions from and then, that is a pretty strong step. host: first sunday of each month on booktv, "in depth." this sunday, ann coulter. later on, michael moore. thanks for being here. you have a great weekend. congress now in session, pro- forma. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] boehner, speaker of the house of representatives.

the speaker pro tempore: the prayer will be led by the deputy parliamentarian. >> let us pray. almighty god who has given us this good land for our heritage, we humbly beseech thee that we may always prove ourselves os to a people mindful of thy favor and ready to do thy will. bless our land with honorable industry, sound learning and pure manners. so help us god. amen. the speaker pro tempore: the chair has chammed the journal

of the last day's proceedings and announces to the house his approval thereof. pursuant to clause 1 of rule 1, the journal stands approved. the chair will lead the house in the pledge of allegiance. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation, under god, indivisible, with liberty and justice for all. pursuant to section 4 of house 375, legislative business is not dispensed with on this day. the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir, pursuant to the permission granted in clause 2-h of rule of the rules of the u.s. house of representatives, i have the honor to transmit a sealed envelope received from the

white house on august 2, 2011, said to contain a message from the president wherein he has made a certification. with best wishes, i am, signed sincerely, karen l. haas clerk of the house. the speaker pro tempore: the clerk will read the message. the clerk: to the congress of the united states. pursuant to section 3101-a-1-a of title p 1 of the united states code, i hereby certify that the debt subject to limit is within $100 billion of the limit in united states code 3101-b and further borrowing is require to meet commitments. signed, barack obama, the white house. the speaker pro tempore: referred to the committee on

ways and means and will be printed. the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir, thank you for your courtesies to me as speaker and your fairness as chairman of the education committee. by this letter, i give notice of myres. egg nation from the united states house of representatives, effective immediately. i have included a copy of my letter to the governor of oregon. i shall miss this honorable work in this institution. god bless the united states of america and god bless the house of representatives. signed, david wu, member of congress. the speaker pro tempore: under clause 5-b of rule 20, the chair announces to the house that in the light of theres. ig -- resignation of the gentleman from oregon, mr. wu, the whole numb of the house is 432. the chair lays before the house a communication. the clerk: the honorable the speaker, house of

representatives, sir, pursuant to the permission granted in clause 2-h of rule 2 of the rules of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on august 2, 2011, at 1:00 p.m., that the senate concurred in the house amendment to the bill senate 365, that the senate agreed to, without amendment, house concurrent resolution 70, with best wished, i am, signed sincerely, karen l. haas. the speaker pro tempore: pursuant to clause 4 of ruled 1, the following enrolled bill was signed by the speaker on tuesday, august 2, 2011. the clerk: senate 6 -- senate 365 to provide for budget control. the speaker pro tempore: the claire lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir, pursuant to section 4-c of house resolution 5, 112th congress,

and section 1-k-2 of house resolution 895, 110th congress, i transmit to you notification that jay egan, alison hayward and kelly bruington have each signed an agreement not to be a candidate for office of senator or delegate or resident to the congress until at least three years after he or she is no longer a member of the board or staff of the office of congressional ethics. copies of the signed agreements shall be retained by the office of the clerk as part of the records of the house. with best wishes, i am, signed, sincerely, karen l. haas, clerk of the house. the speaker pro tempore: the claire lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir, pursuant to the permission granted in clause 2-h of rule 2 of the rules of the u.s. house of

representatives, the clerk received the following message from the secretary of the senate on august 3, 2011, at 10:54 a.m., that the senate passed senate 1302, that senate passed senate 710, with best wishes, i am, signed sincerely, karen l. haas, clerk of the house. the speaker pro tempore: the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir, this is to notify you formally pursuant to rules of the u.s. house of representatives that i have been served with a nonparty subpoena issued by the circuit court for russell county, kentucky, for documents and testimony in a criminal case. after consultation with the office of general counsel i have determined that compliance with the subpoena is in compliance with the rights of the house, signed, sincerely,

anet wright, executive assistant. the speaker pro tempore: pursuant to sections 3 and 4 of house resolution 375, the house stands adjourned until >> the house returns tuesday for another pro from a session. the house will force the senate to return on her as a rigid regular basis block in the president from making recess appointments. the senate approved a short-term funding bill for the faa. we will have live coverage to all of pro forma sessions runcie's that. wash -- president obama is going to the washington navy yard to talk about transitioning veterans to the work force. we will have live coverage at 11:00. hiring picked up slightly in june. the unemployment rate was at 9.1%.

the congressional joint economic committee is meeting today to look at the details of those numbers and we will have live coverage at 12:45 eastern on c-span. >> the house of representatives has been off eight weeks already including this week. do you get a week's vacation because i sure didn't. >> former "russia today" host takes an hour review of washington and the u.s.. >> we're willing to try something different and figure out how to make tv news exciting and entertaining and informative again rather than the garbage it has dwindled down to. >> that is on "q &a." >> 8, 7, 6, 5, 4, 3, 2, 1 - zero

- >> these are the stakes, to make a world in which all of god's children can live or go into the dark. we must either love each other or we must die. >> vote for president johnson on november 3. >> this weekend, we'll look at the history of political campaign as with lsu professor robert burqa mann. american history to be on c-span 3, get the complete we can schedule at c-span.org/history. this month, cspan real features

more of the lbj tapes airing for the first time. this saturday, your conversations between the president, secretary of state dean rusk, and senate armed services committee chair richard russell. >> i am trying as hard as i know how to get peace in viet nam as quickly as i can. for that reason, i am not running. >> listen to cspan radio at 90.1 kent and online at c- span.orradio.org. >> the center for retirement security meets today to discuss innovations in retirement security. it is part of their annual conference. the speakers include two of the trustees overseeing social security and medicare with live coverage at noon eastern on c- span 2.

we'll show you a portion of yesterday's conference. this is not enough americans are contributing to an aunt -- to a retirement account and the obama administration is pushing congress to make ira enrollment automatic. the conference was hosted by boston college and is happening here in washington and this is half an hour. >> i am honored to introduce mark every. i have had the pleasure of knowing mark for a very long time very his influence on public policy calls to mind the quote by harry truman," it is

amazing what you can accomplish if you do not care who gets the credit." that is marked. in an understated way, he has been a major force behind improvements in pension and health care policy for decades. chief among his accomplishments is the auto escalation default rates which is the biggest positive developments since 401k's were developed. he is an architect of the faovrs credit and co-authored the obama proposal to expand coverage through auto ira's. i don't have time to list all his accomplishments but i want to stress that mark is sought out by decision makers of all political persuasions in the public and private sector for his expertise. , his insight, and his skill at making things happen.

he is truly an on son here in the retirement policy community for his ability to develop and implement sensible policies for pressing problems. if you have not already guessed my feelings, marcus said -- mark is simply a terrific human being. we're lucky to have him here today. please join me in welcoming mark everey. [applause] >> alisa, thank you for the gracious act of perjury on my behalf. [laughter] i am delighted to be here. this is a fantastic collection of brains and talent. i would like to thank mike astrew, dave rust, david weaver, and everyone who put this conference together.

the consortium is a wonderful effort. it has been productive. it has added great value to the thinking about policy in this area and the three retirement ansearch centers do extraordinary job. i have a strong sense that being with such a distinguished and thoughtful group, the best use of my time right now probably would be to close my remarks and go around the room and solicit ideas. i'd like to collect your best thoughts and suggestions but i have been asked to talk a bit first. i will dutifully complied.

y. the theme of the conference -- innovations in retirement security -- is highly appropriate and timely. within the private pension system and the retirement savings system which supplements the fundamental bedrock protection that the social security system provides to the american workforce. within the private pension system, our second tier of retirement security in this country, the market is in no wading in a variety of important ways.

it has to do with breaking down the traditional barriers between the traditional benefits that promises a particular dollar amount, typically per month, for life in the traditional format as opposed to the defined contribution plan which puts a particular amount of input into the plan, a $1 contribution that grows with investment and is designed to produce an output that is not necessarily determine that the outset. breaking the barriers between those classic formats is something innovative that the market has done and it's on. policy makers have not taken the initiative to do that. the creativity and the market has done that and has gotten beyond the labels and focused on

the realities, this does of the attributes of these programs and vehicles. , what characteristics they should have in order to best help people get retirement security and provide for their retirement security. our private pension system right now is in a state that one might fairly characterized as glass half full/glass half empty. the half full part is obvious and salian. 65 or more million american workers are covered by private pension and retirement programs. millions of middle income and lower income families have been receiving benefits for decades

now from defined benefit pensions and from the fine contribution 401k and other plants. s. the ira's have supplemented the settings opportunity on a tax- favored this is for folks who don't -- who do not have an employer plan available to them. we have accumulated the largest pool of investment capital, perhaps some world. -- perhaps in the world. the latest results from the last quarter of 2011 suggests there is $11 trillion in the combination of defined benefit/to find contribution to ira with something like $2.30 trillion in the defined benefit -- defined benefit pensions. something like $4 trillion in

the 401k and defined contribution and $4.70 trillion in the ira's. as we know, the ira's have been taking roll overs. from the other two types of plants of that much of the ira money is attributable to these employer-sponsored plans that have had the benefits rolled over to the individual retirement account while other portions of the irs sets are attributable to continuing contributions by millions of americans, in particular, people who don't have access to an employer plan. the employer-sponsored system covers about half the work force, perhaps a little more.

those are key features of the glass being half full. the glass is half empty and the sense that the employer- sponsored system covers about half the workforce. perhaps a little bit more but the rest are disproportionately minorities, lower income people, women who are not in the work force steadily for 40 years on end, the folks who are left out, who are in some cases contributed and to these individual retirement accounts but only something like one out of 10 of the people who have no employer plan and are eligible to contribute on a tax-favored basis to an ira would actually be contributing in an average

year. the rate at which people use these tax-favored savings opportunities is not where it could be. the system is also driven by tax preferences which are designed, as we know, to encourage the private sector to supplement social security as it has done in such a formidable way. those tax preferences are designed in a way that may not be ideal when it comes to how best to address the needs of the majority of american workers. the system of tax preferences is deduction dallas-based. -- does deduction test base. when you contribute a dollar to

8401 k account, for example or white -- when an employer contributes $1 and your behalf to a retirement program, it does not appear on the w-2. it does not get included in your taxable income until years later typically when the dollar has grown and exits your plan as a withdrawal when you're ready to take your benefits. when a cousin to the plan, it disappears from your tax base. it does not appear on your w-2 which is a value in proportion to how high your tax bracket is. + you are in the federal + area, generally $1 generates 40 cents worth of tax savings as the dollar would have been taxed to the tune of 40 cents.

to you, the after-tax cost, the cost to you putting the dollar in the plan after taking into account your tax savings is the dollar-the 40 cents you save or 60 cents. if your tax bracket is 10%, , you are getting a dome worth of tax benefits. the net after-tax cost to you and its origin in the 10% bracket of setting a dollar is 90 cents rather than 60 cents. you have a dime's worth of tax benefits for saving a dollar. many in the economics profession have referred to this as an upside down kind of incentive in the sense that the people who need the help the most to encourage them to save are given the least incentive.

as a result, the congress in 2001 passed a saver's credit designed to level the playing field on behalf of -- on behalf of the majority of the american work force. the majority of our work force are in the lower tax bracket many are working hard paying their payroll taxes and not 01 any income tax. payrollpaying their taxes which is a substantial amount -- substantial percentage of their income for these people. the income tax savings when they contribute is zero. that may have a fica tax break when the employer contributes. this situation can be remedied

by expanding this tax credit which congress enacted that favors credit that gives people an additional financial incentive for savings when the tax bracket is not the highest. if you save the $1 in a retirement program, you could get 50 cents back that a tax benefit. the current savers' credit unfortunately because of revenue constraints gives most people who qualify for it 10 cents on the dollar back or 20 cents signed on the dollar back. very few get 50 cents on the dollar but it could be expanded in order to give more people a more substantial financial reward. for saving that would level the playing field in favor of those who are in bill lowest tax

bracket. it could also be made refundable meaning that folks who pay their payroll taxes that don't owe any income tax would actually get a deposit, a refund in the form of dollars contributed to their plan. another shortcoming of the current system is even of the people who have an opportunity to save in the workplace through an employer plan, many don't. one of the key innovations in the private sector that has addressed that shortcoming to increasing extent and this is something that alicia manell has

written a brilliantly, is the automatic 401k. the notion has been that one reason people don't participate as much in retirement savings opportunities that they have is because it takes initiative. it takes getting up off the couch and deciding where to contribute. if you have an employer plan it may be clear where you contribute but maybe not have to invest it. the choices can be daunting. they can keep people in a state of inertia or they don't the around to making the decisions and closing the deal and actually save it. we have had traditionally in

the 41 k space something like a 70%-75% take up tate. people typically leave money on the table because the employer often matches what the employee contributes perhaps at a rate of 50 cents to the dollar. there is the employer-matching contribution that the participant is leaving on the table that they could get by putting in some of their own money. the employer plan is a powerful vehicle. it makes savings pretty easy. traditionally, not easy enough. the need to take the initiative to sign up for the 401k and make the decisions and how much to put in and how to invest had deterred -- has deterred many people.

he may say you'll get the form back to hr after this weekend and you think about and make the decisions and you will bring it back next week. if you're like me, by the time the weekend is over, you cannot find the form. [laughter] you have not had a chance to discuss this with your spouse or whoever else pretty soon, some time stars to go by and inertia takes its toll. one of mye 1990's, staff came to me when i was a treasury and said there is an obscure legal question that we've been asked to consider. suppose the 41 k plan puts them in the plan, and rolled them and did not make them sign up but let them opt out of the plan would that be legal?

my staff and i were swamped with things to do and i remember saying that we got all these major policy concerns trying to promote a more secure system, promote retirement security in various ways and we've got so many of trees legal issues of our plate already. i don't think we have time to deal with this. let's put it off. the light bulb did not go off until a little later. i will confess that it was probably a couple of months. then all the sudden, it became clear that putting somebody in a 401 k. but giving them the choice to step out of it might

overcome the inertia that keeps a 1/3 or 1/4 of the eligible folks out of the plan. it was framed as a - 0 election. -- was framed as a negated election. this is so the election form was only if it wanted out of the plan. encouraging saving and good policy to promoting retirement securities, this was not * legal question but a very good idea. -- this was a very good legal question. the few plants that have been trying this were reassured that

it is consistent with all the other roles. in 1998, we issued a ruling- defining this practice and naming it approved a get, promoting it. -election did not seem like a great name. [laughter] this is washington, after all and we wanted people to understand that this is a positive constructive idea, consisting of individual choice but helping people find it easier to save. this is so that inertia perhaps the most powerful force in human affairs would be on the side of saving rather than the side of not saving. my staff and i gathered over lunch one day and spent half an hour discussing the name and

what we should call at. automatic enrollment -- just because that is descriptive of what it is. it is automatic in the sense that as an employee, you're in the plant automatically even if you do nothing. does not automatic in the sense that you have to stay in. that is just the defaults, the presumptive thing that happens. we called that because we wanted to also plants the seed that maybe all phases of savings could be automated in that sense. if you have a moment may all- out so people are in unless they opt out, what about investors? why make investments that way, too. give people the choice and let them decide. make an automatic option available. people can then decide later as

the get more financially literate and they can do that. automate all phases, enrollment, contributions, investment, and what about payouts from the plan? lots of the funds that are cumulative and our private pension system leak out of the system in the form of consumption that may not be for an emergency or to feed the family will summon is unemployed. it may not be for a long-term investment in security like maybe purchase of a home or education for oneself were once kids. hboaty be to buy the baty for taking a vacation. the government should not people what they should do.

we are providing tax preferences for the savings. customers are paying mall -- more to direct money toward this policy. we are encouraging people in a certain direction. the purpose of the tax preference is supplementing social security by providing more retirement. automatic rollover, that is transferring the money when it comes out of the plan, if you're not ready to retire end of your in your 20's 30's, what ever in your not ready to reebok -- retire, transferring it to your new plan, hopefully will have a new employer, or transferring it to your individual retirement account.

that portability, tax-free roll over, from an employer plan to a new employer's plan or an ira is something we could also perhaps make more automatic. indeed, the system has moved in that direction. if the employee leaves a job does not ask for their money, the money stays in the plan. if the employee has less than $5,000 in the plan, it used to be that the employer could catch the person out in voluntarily. it appears in your mailbox and it tends to be specced. once people get their hands on the money especially a harder -- a smaller amount, is hard to visualize what this will go to reach your so security. it is most likely to be spent and that is true in my family.

what congress and the executive branch did was developed a way to automate these payouts to some degree. we provided that the law under which employers involuntarily cash out small distributions, they would keep the money in the plan until the individual asked for it. the person wanted, and a family says they want, they get it. sb -- if people are silent by being distracted or changed their address, the money either stays in the plan to continue to accumulate tax-favored basis or it gets rolled over to an ira. in that person's name even of they did not sign up for it. either way, it stays in the tax- favored retirement system. the phases of saving in the 41 k

world have been automated increasingly. plans have gone to automatic enrollment to an appreciable extent. large plants that now converted -- large plans might be 3% or 6% of pettitte. it does not have to be able to kill the low rate. in the obama administration, we make pains to emphasize that the rate does not have to be the 3% the many plants use which was the rate we used in our 1998 ruling, uprooted automatic enrollment merely as an example.

employees are participating along her at these four and rowling plans up to 95%. the takeout rate has been dramatically increased and lower income people have benefited most from it, minorities, folks who were not signing up for the plan at their own initiative. they're now doing so. those don't want to save are free to opt out. consistently, is significant number of people whether it is 5% or 10% of those eligible observed that choice. representmatic 401k's

a first generation of making saving easier. there is a second-generation coming on that a lot of creativity in the market is boring and posturing. peeper -- people who are newly hired will be at 5% or 6% of their pay unless they choose otherwise. they can be whatever the maximum is that is permitted in their plan. but when you use 5% or 6% of the fall, the anecdotal evidence suggests you don't get more people opting out. maybe a few but not a lot more. second, the contributions can ratchet up over time and automatically. the employer can stay -- and said we started every one at 5%

but they're going up to 6%. you can get off that escalator anytime you like but it is not as automatic as a default. that step up technique has been spreading steadily in the 401k universe. the investments have been automated so there is a default investment and the labor department has issued guidance some years ago and that is the news to a great extent in the private sector. this success story in the 41 k world is one that has helped millions of people get into saving who are not sitting

before. what about the other portion of the population that does not have access to a 401k? you cannot enroll someone automatically and some they don't have. -- something they don't have. the idea has taken hold with my colleagues like david and john at the heritage foundation who along with bill gayle at the brookings institution and peter orszag when he was at brookings, as part of the retirement security project, nonprofit venture, some years ago, we worked on these approaches and david, john, and i put together a way to automate enrollment for people who don't have an employer plan. we have a voluntary pension system.

many employers feel they are not ready to embrace this plan. they have an asset that their employees could use to make saving easier which is their payroll system. one of the great strengths of our private pension system is that it is employer-based. using the payroll system to makes it easier. that is rather than having to amass a certain amount of liquidity, a few thousand dollars worth of cash in order to contribute to an ira for example all you can contribute smaller amounts subject to the ira trustees role. rather than having to think about where you will get a lot of money in order to make a meaningful contribution to employee with payroll deduction would benefit from the slow, gradual allocation of a few percentage points -- every day. .

is preparing us. it adds up. -- is pretty painless. it adds up. this can be replicated for the millions of folks who don't have access to a 401k or defined benefit pension or any other polls by way of savings. we can next an automatic enrollment to them by asking their employers to let the salary reduced and have that go into their own tax- favored savings accounts without the employer having to sponsor a plan or contribute from its own funds matching or otherwise, or having to comply with the arisa labor laws or the tax code laws

that apply to 401k's or other plans. as a matter policy, the administration and boat people here want people to want to sponsor the plan. we encourage employers to encourage defined contribution plans what ever for a plan they are willing to adopt for their employees. those who are not ready to do that could at least let their employees use the payroll system as a conduit, as a delivery mechanism to get the money from the employee's own paycheck if the employee wants to. wants to.ployee doe we call that the automatic ira.

heritage foundation has been very supportive of this. many other organizations. aarp, has been tremendously supportive and members of congress on both sides of the aisle. the program was adopted some years ago by senator obama and senator mccain, both of them indicated support for it and senator obama put it in his platform as a central component. the president has continued to propose this in his budget proposal. a tax credit would go to the employers that do this and let their employees use their payroll system and no employee -- no employer that does not have a plan would be asked to do

use this. it would be an employee that flies the flag and as more than 10 employees. it should be as easy as possible for the employer, minimum of hassle or burden for the employer and now out light. the employer is not contributing. there's no out-of-pocket cost. our hope is that something along these lines like an automatic myrick proposal which members of congress and others in the house have proposed and which has attracted support from a variety of quarters over time.

our hope is that this will help address the people who are not in the system now and make easy for them to say. -- it makes it -- and make it easy for them to save it. . there are many other constructive ideas that would be desirable to pursue like to discuss with all of you. we undertook to save some time for q&a. alisa, if you would like to begin that. >> but if you have questions, write them down on a piece of paper and they will be collected one is -- i think your baby was attacked by "the wall street journal." there was a recent article that indicated the ppa might have

had the unintended effects on 41 k savings. this is your chance. >> i am familiar with the acronym pension protection act of 2006 was one of the things that after initial release from treasury and irs promoted automatic enrollment. alicia is referring to a point of view that points out that if you automatically enrolled people in the plan some of them might go along with inertia even of not participating, they would have participated at our level than the deval contribution. maybe they would have been treated 6% but the plans a fall is 5% so i do nothing and i am in a 5%. that is a phenomenon that some people call ancoring people at

a lower level. that also can happen when you automatically handle people. as bird would enthusiastically agree, you can address this very readily for escalating the contribution level from year to year. as others have suggested, every time someone gets a raise, you can give them an increase in the contribution automatically unless they want to do otherwise. so they don't see their take- home pay going down. as many companies do, even with three out -- even without regard to the timing of a race, you can increase the contribution level automatically every year. apart from that, it is said significant to have people who are not contributing at all enter the plan for the first

time and become savers. that tends to swamp the affected people might otherwise have contributed a little more but who by inertia might be drawn down to the default level of contribution. to take a zero contributor and burn them up to 5% i would argue is more of a social benefit for all bus them to take a 10% contributor and have them contribute 5% because they go with the nar said. you have encouraged someone to come into the system. it to increase that 5% gradually over time, you'll take care of the problem entirely. >> there are a couple of questions related. you talked about the human relations phase of the 41 k plan.

-- four zero one k plan. -- 401k plan. all the money is moving from 401 k's to >> the revenue being generated in the syrup plants are more than red cross but how to get people into 401k's and to contribute more very often is well worth it. the problem you are alluding to is another shortcoming of our system that over time as we have shifted from the find that the plans to 401k's.

it is not so much to find as employer-funded. is employer initiated employer directed. to do yourself plans that people direct honor on. that shift has been associated with this client in a lifetime income, a decline in retirement income payments as opposed to single cash payments. more people are taking money out of their plans and invest another owns the my traditionally have been the case when plans are more prevalent that paid out lifetime income, a monthly check you got for your entire life and the life of your surviving spouse, typically, that guarantee you would not run out of assets during retirement at least to

the extent of that monthly check. in addition to social security. these traditional pension plans that pay annuities were similar to some aspect of so security paying a lifetime income. the lifetime income has been declining. even the defined benefit pensions are paying more lump sums and less lifetime incomes. the default is defined benefit pension is a lifetime annuity. people will elect against a default sometimes. our behavioral strategies need to be more sophisticated than simply relying on a default. what the market has been doing by way of innovation and what the treasury and labor departments have been doing has

been focusing on how we can encourage more restoration of lifetime income to our system. it is easier for individuals to take seriously as an alternative they might want to use for their retirement security and a lifetime income protection or retirement income whether it is guaranteed for life or whether it is a long stream of payments for decades that may or may not be an annuity that is guaranteed for life, that is something that is coming back where system slowly. labor and treasury are encouraging a national conversation about this. we have got many comments on our request including from many of you here. -- startut to come out

to come out with administrative guidelines that would be designed to allow people to consider options for a lifetime income in various formats whether commercial annuities, defined benefit plan would tease, it is a retirement accounts, ways to help people a mess -- manage their assets in return. acrylic -- the killing the assets in the first place is critical. we're far from having reached our goals there. happily, many middle income people are reaching retirement now with more accumulation of assets in addition to whatever guaranteed income they have from so security and other defined benefit pensions. those people need help simply in deciding how do i make this my last and how the way in sure that i will not run out?

but as the issue that is being address. we very much invite all of you to counsel with us and how best to promote that. we still have a private pension system. we still call it private pension system but the term pension traditionally has commented lifetime in come. a stream of payments that is guaranteed for life the way so security is at the way many defined benefit plans still provide income. returning to that as a viable option but not necessarily something everyone should do. many people feel for emergencies that they will have expenses and long-term care and medical shocks. they should at least for this

option sell the back on the table. >> you'll have to have a truck or a will bear when you leave here because there are so many questions. do you have any thoughts about limiting the number of investment options in 841 k? your job is to make these easy and automatic. >> you are right that in a sense, our whole deal is been made to make savings easier and much of it to make it more automatic, but part of it has also been to recognize the voluntary nature of our private pension system, and recognize that the market and the private sector is in the driver's seat, and that is appropriate. what we are trying to do is anchorage, make it easier rather than require -- encourage, make it easier rather than require.

401k plans, i think we are finding that they can make the choices easier, in some cases not by reducing the number of options, but as you know and you have written very eloquently on this, by having one to be the default. if you have one automatic investment option, it is easy for people who would otherwise be paralyzed by the range of choices to go along with that and think over time about whether to diversify into other choices. >> this one i have no idea what the answer is -- could an investment company, such as vanguard, do it if congress does not enact legislation? >> well, that is a creative thought -- [laughter] >> we are creative people. >> and that is why we are here. there is room for all sorts of innovation along those lines.

employers now can voluntarily adopt a payroll deduction ira. that is, if they are not ready to have a plan, and we hope, by the way, that automatic ira's, if enacted, employers to adopt plans when update see how effective payroll-based savings is and how employees appreciate it. but they can have a payroll deposits just as this and a direct deposits to paychecks -- they said direct deposits and paychecks into people's accounts. that direct deposit of paychecks is a kind of model for taking perhaps 5% of that paycheck, at the employee's b.s., and sending it to ever the employee wants to - that the employee's behest, and sending it over to wherever the employee wants it to be said.

you could let employees opt out. you could do something like that in another context. employer's right now have not taken up the erroll composite i -- the payroll deposit ira. typically, they have not had a plant -- obviously, that employers have adopted more elaborate plans. but small businesses -- typically, they are not doing this voluntarily, and that is why the automatic ira proposal would call for employers who are large enough but not willing to sponsor a plan to at least make that a cable system available to their employees with a tax -- make that payroll system available to their employees with a tax credit that would be for whatever small administrative costs would be entailed. >> want last one, and that we

will let you go, because you are only one day from vacation. is there still a role for financial education? >> that is something i am very glad has been raised. financial education, i would argue, is crucial, and even more so with automatic features. the fact that financial education by itself is not sufficient to generate a breakthrough in saving in the united states does not mean that it is not necessary. were tremendously important. -- or tremendously important. i think that it is, if you are going to automatically and will people -- automatically erroll people with investment, you want them to assert their choice. the auto features are just to help people get off the couch

and start saving, to help people get into the system. once a bank are in the system, if they have not already -- once they are in the system, if they have not already asserted their choice, they ought to have the opportunity to make the choice that is best for them. it is critical that we promote the financial capability and financial literacy efforts. i know that you and others here have been leaders in the social security administration, who has been a leader in that. the treasury and the obama administration are strongly supportive of it, and have also been trying to advance that. let me add, to connect these themes in closing, lifetime income, the idea that people need help, advice, other types of assistance in figuring out how to make their savings last and how to make sure they meter

neither -- how they meter run at a retirement nor to abort their savings and not -- helping with those issues is so intense that an education project. it is not only giving them easier mechanisms, but also helping them understand how it all works, how an account balance translates into a stream of income, and framing the issue so that people will become used to thinking in terms of a retirement or pension paycheck that they need to provide for themselves rather than just the sum of money whose duration is uncertain. this has been great. i very much hope that we can continue as we have been doing the dialogue with all of you here.

we very much welcome -- i say "we" -- the administration, treasury department included -- welcome your suggestions and ideas and collaboration and input on what needs to be a thoroughly bipartisan, non- ideological effort to promote retirement security for all americans. >> mark, thank you so much. [applause] john, you should probably come up and take over.

>> we are going to take you back live to the conference and retirement today. the panel is discussing innovations in retirement security. speakers include robert reisch auer, one of the trustees overseeing medicare. we expect to take you live bank to the navy yard in washington, d.c. -- take you live to the navy yard in washington, d.c. we will have live coverage when it gets under way, which should be fairly soon. the main features, according to the associated press, of the obama proposal include two tax

credits for companies that hire unemployed veterans, of returning heroes tax credit for 2012-2013, companies that hire unemployed veterans would receive a $24 tax credit. also, a two-year extension of the wounded warriors tax credit, which gives veterans with service-related disabilities and nearly $5,000 credit brought the official with the administration estimates that the cost of the tax credits are $120 million. the president's comments are coming this morning after the labor department announced the unemployment figures. unemployment dropping just a bit, to 9.1% for the month of july, with the monthly job figures showing that 117,000 jobs were added last month. the labor department says that is better than the past two months, which were also revised higher. live coverage from that navy yard in washington, d.c., with president obama, up shortly --

coming up shortly. a live look at the crowd waiting at the navy yard in washington. president obama will be speaking shortly. world mike mullen is also in the audience today -- admiral mike mullen is also in the audience today.

this speech at the navy yard, president obama's only official public item on his agenda today. he adds to the maryland mountains, camp david, over the weekend. the president will be talking about employment opportunities for veterans. "the washington post" this morning says that the steps he will talk about include tax cuts for companies that hire unemployed veterans, and the creation of an intergovernmental agency task force to explore the idea of "reverse boot camps to better prepare veterans for reintroduction to the civilian workforce." again, this is the navy yard, not far from the white house in washington.

at the navy yard in washington, d.c., waiting to hear from president obama about employment opportunities for veterans. this on a day when at the labor department announced the unemployment rate ticking down slightly to 9.1%, with the economy adding 117,000 jobs. on capitol hill today, both bodies, the house and senate, in

for a pro forma session, although the senate did approve a short-term funding bill for the federal aviation administration, which funds the agency through september 16. also, "the washington post" reports that three -- delayed trade deals with south korea, panama and colombia are moving closer to a vote. >> chairman of the joint chiefs of staff, admiral mike mullen. [applause] >> mr. president, distinguished guests, good morning. on behalf of our men and women in uniform and their families, some of whom joined us here today, thank you for being here. welcome to the washington navy yard, our navy's oldest shore establishment. for those of you who don't know, this is a special place in

american history. through war and for peace, sailors, civilians, naval architects and businessmen came together at the navy yard to build and repair america's fleet. hear, opportunity was created and innovation rewarded. here was spent a great sweat and muscle and sinew of our overseas security. not far from where we gather, the uss constitution, all ironside herself, was brought in for repairs during the war of 1812. the navy yard manufactured the 16-inch guns that bristled atop a deck of our world war ii battleships. and here, as scientists and engineers fashion at the components that made possible the great accuracy of those guns. it is fitting indeed that here today, the president announces a new initiative to put the muscle and sinew and intellect of the new generation of veterans to

work again. many of these young people have served five and six and even seven it tours in combat. some of them suffer from serious wounds seen and unseen. all of them want a chance to pursue the same dreams as every other american pursues. i think back to a young man i met in those angeles a couple of years ago. he fought in afghanistan, fresh out of the army, unemployed and homeless. he told me, "i gave my country 100%. all i ask for is 100% in return a." that does not seem like too much to ask -- a job, education, a roof over your head, food on the table. what our troops need when they come home is more than yellow ribbons, parade and an open heart. they need an open hand. one of the best ways to extend

that and is to truly are a veteran -- and to truly under a veteran is to hire one. with the right support, right opportunities, our veterans and their families will not only make incredible contributions to the workplace, but also to their communities as well. they are smart, tech-savvy, wired to serve and great leader's. they will make terrific employees. and i can tell you this -- they darn sure know how to show up on time. [laughter] the problem is, once they leave the service, they can be hard to find it tough to identify. i am convinced there is a sea of goodwill out there and organizations eager to help. but there is no easy way to connect our young cadets with the employers and community leaders and organizers who remains a critical to making and sustaining those relationships. i am pleased an extremely

grateful that president obama has focused all of us on doing just that. finding ways to make sure our veterans have the tools they need for success after service, and the jobs they need to continue their lives after they have done and given some much for us. he and the first lady have devoted an extraordinary amount of time and personal leadership to this endeavor. through programs like this one and the joining forces initiative, our first family is doing everything they can to put the military first. they are doing everything they can to give back that 100%. the president has made our troops and their families his top priority. he has backed that up a day in and day out with a real and substantial changes and the resources to make those changes work. i have seen him a labor hard over these initiatives and drive

us all to better measure s of success. he is nothing if not passionate. and yet somehow he doesn't look a day over 50. [laughter] ♪ ladies and gentlemen, it is my honor to introduce our commander in chief, president barack obama. you can go ahead and a cheer, too. [applause]

>> please, everybody. i'm just waiting here. [laughter]

well, thank you very much. good morning. somebody told me that was the last one, because i had lost count. [laughter] it is great to be here at the navy yard. first of all, i want to thank admiral mullen for being here and for his four decades of

extraordinary service to this country. i want to thank him for saying that for an old guy, either go get it -- for an old guy, i'd look ok. [laughter] i appreciate that. this may be one of the oldest shipyard in the united states, but today it is used to develop some of the most advanced technology in the military. although i hear your engineers are still working on a solution to the traffic when the nationals are playing. that is not ready yet. let me start by saying a few words about our economy. there is no doubt this has been a tumultuous year. we have weathered the arab spring's effect on oil and gas prices, the japanese earthquake and tsunami's effect on a supply chains, the extraordinary economic uncertainty in europe, and recently, markets around the

globe have taken on the right -- have taken a bumpy ride. my concern right now, my singular focus, is the american people -- getting the unemployed back on the job, rebuilding the social security, and helping them recover folate as families and as communities from the worst recession that any of us have ever seen. today we know that our economy created 154,000 new private- sector jobs in july, and that is the strongest pace since april. the unemployment rate went down, that up -- down, not up. but while this marks the 17th month in a row of growth in the private sector, nearly 2.5 million private sector jobs in all, we have to create more jobs than that each month to

make up for the more than 8 million jobs that the recession claimed. we need to create a self- sustaining cycle where people are spending and companies are hiring at our economy is growing. we know that will take some time. but what i want the american people and our partners around the world to know is this -- we are going to get through this. things will get better, and we are going to get there together. the bipartisan compromise on deficit reduction was important in terms of putting us on a sounder fiscal footing going forward. but let's be honest, the process was divisive, it was delayed. if we want our businesses to have confidence, at they need to get cash off the sidelines and invest and hire, and we have got to do better than that. we have got to work together to grow the economy right now and to strengthen our long-term finances.

that is what the american people expect of us, leaders that and put aside differences to meet challenges. when congress gets back in september, i want to move quickly on things that will help create jobs right now. extending the payroll tax credit. extending unemployment insurance to help people get back on their feet. putting construction workers back to work rebuilding america. those are all steps we can take right now that will make a difference, and there is no contradiction between us taking some steps put people to work right now and getting our long- term fiscal house in order. in fact, the more we grow, the easier it will be to reduce our deficits. both parties to share power. both parties share responsibility for our progress. moving our economy and country forward is not a democratic or

republican responsibility, it is not a public or private responsibility. it is the responsibility of all americans. it is in our nature to do the tough things when necessary, to do the right things when called, and that is the spirit that washington needs right now. it is also the kind of spirit found in the men and women who proudly served in our country's uniform. that is the spirit that indoors long after it they take those uniform -- that endures long after they take those uniforms off. today's veterans have done their duty. they have fought our wars with the dollar in the jungles of vietnam to the deserts of iraq and the mountains of afghanistan. they include members of today's military, the 9/11 generation, some of whom are here today, who volunteered to serve at a time of war knowing they would be sent into harm's way. to these men and women, i want

to say that all of you have served our country with honor. over the last decade, you have performed heroically and have done everything we have asked of you in some of the most dangerous places on the planet. your generation has earned a special place in american history. today, nearly 3 million extraordinary service members like you have completed their service and made the transition back to civilian life. they have taken their leadership experience, and their mastery of cutting edge technologies, their ability to adapt to changing circumstances, and they have become leaders here at home. just think about how many veterans have led their comrades on life and death emissions by the time they were 25 years old. that is the kind of responsibility and experience that any business in america should want to take advantage of.

these veterans are already making an intact, making companies and communities stronger, but for every success story, there are also stories of the veterans who come home and struggled to find a job worthy of their experience and talent. veterans like nick. when nick was in afghanistan, he served as a combat medic with the 82nd airborne. over the course of his deployment, nick save the life of a french soldier shot in the head and not 42 -- helped 42 people escape from the flooding river. he earned a bronze star for his actions. when he got home to wyoming, he could not get a job as a first responder. he ended up having to take classes for the post-9/11 at g.i. bill, classes he easily could have taught, just so he could qualify for the same duties at home he was doing every single day in afghanistan.

there are veterans like maria. she was a financial specialist in the army, helping to provide financial support for the unit in iraq. when she got home, she finished a earning her degree in business management. but even with her education and her experience in the army, maria still cannot find a steady working shop in accounting or finance -- still could not find a steady working jobs in accounting or finance. that is not right, and it does not make any sense, not for our veterans, not for the strength of our country. if you can save a life in afghanistan, you can save a life in an ambulance in wyoming. if you can oversee millions of dollars in assets in iraq, you can help a business balance its books here at home. our incredible servicemen and women need to know that america's values and not simply for what they can you in uniform, but for what they can

do when they come home. we need them to keep making america strong. our companies need a skilled workers like our veterans to groote. there is no reason we cannot connect the two. keeping our commitments to our veterans has been one of my top priorities as commander in chief, and that includes helping them make the transition back to civilian life. that is why we are fully funding the post-9/11 in gi bill, which is helping more than five what it thousand veterans and family members pursue a call -- the gidget -- helping more than 500,000 veterans and their family members pursue a college education. that is why i directed the federal government to be a model employer and hire more veterans, including more than 100,000 in the past year and a half alone. so today we are taking a step further.

first, we need to do more to make the transition from military to civilian life easier for our veterans. that is why i am directing the departments of defense and veterans affairs to decide what we are calling a reverse boot camp. the problem is, right now we spent months preparing our men and women for life in the military, but we spend much less time preparing them for life after they get out. we will devote more time on the -- back end to help them learn to transition to credentials. we'll help him pursue a career that it's the best. these steps will bridge part of the gap between veterans looking for work at companies looking to hire. that is only part of the

equation. the other half is about encouraging companies to do their part. that is why i am proposing a new returning hero tax credit for companies that hire unemployed veterans. i am proposing an increase in the existing tax credit for companies who hire unemployed veterans with a disability, who still have so much to offer our country. finally, we are challenging the private sector to hire or trained 100,000 unemployed post-9/11 veterans or their spouses by the end of 2013. this bill has commitments many companies have already made as part of the campaign can be in -- championed by my wife, michelle, and jill biden. microsoft is helping more than 10,000 veterans deaget i.t.-

certified. today, groups from the u.s. chamber of commerce to lockheed martin have all agreed to do their part to help veterans get back in the workforce. the bottom line is this -- we still have a long way to go, a lot of work to do to get folks the economic security and opportunity they deserve. that begins with connecting americans looking for work, including our veterans, with employers looking to hire. over the last few years, another generation of young veterans has learned that the challenges don't end in kandahar or baghdad. they continue right here at home. today we are saying to our veterans, you fought for us and now we are fighting for you, for the jobs and opportunities that you need to keep your family strong and to keep america competitive in the 21st century. at a time when there is so much work to be done in this country,

we need everyone's help to do it. so thank you, god bless you, god bless all our services, and god bless the united states of america. [applause] ♪

♪

[applause] >> so in washington today, the center for retirement security at boston college holding their annual conference. we will bring you a discussion on innovations in retirement security. speakers included two of the trustees overseeing social security and medicare. live coverage at noon eastern on c-span. in his comments at the navy yard, the president mentioned it on and limit figure. it dipped slightly in july to 9.1%.

the labor department said that employers added 117,000 jobs last month. the joint economic committee meets to look at the details of those numbers. we will have that live on c- span. >> every weekend, american history tv on c-span3 highlights the 150th anniversary of the civil war. one of the most important documents of our nation's history, the emancipation proclamation. albany law school professor on abraham lincoln and the proclamation's constitutionality. >> this weekend on a booktv on c-span2, the life and times of clarence darrow. "after words," the british citizens who fought for the union and the confederates. live, sunday at noon eastern, three hours of your calls and questions. "in depth" with ann coulter.

look for the complete book tv schedule at booktv.org, and sign up for the booktv alert. and from this morning's "washington journal," a discussion of the attack o-- impact of the debt ceiling agreement on defense cuts and a national security. specialist on defense spending. we're going to talk about the cuts already agreed to in the negotiations and what the prospects are for the debt hammer of the special committee and what it says, what happened to defense spending if no agreement is reached with them. thanks for being here this morning. i want to start -- because yesterday, the pentagon was the top civilian and the top military leaders had a press conference to talk about the pentagon spending and the debt. let's listen to secretary panetta, and then we'll come

back and learn about what's been said and their reaction to it. >> because we are a nation at war, we face a broad and growing range of security threats and challenges that our military must be prepared to confront. from terrorist networks to rogue nations that are making efforts to obtain a nuclear capability, to dealing with rising powers that always look at us to determine whether or not we will maintain a strong defense here and throughout the world. it is that multitude of security challenges that makes me particularly concerned about the sequester mechanism that was contained in the debt ceiling agreement. this mechanism, the kind of

doomsday mechanism that was built into the agreement, is designed so that it would only take effect if congress fails to enact further measures to reduce the deficit. but if it happened, and god willing that would want be the case, but if it did happen, it would result in a further round of very dangerous cuts across the board, defense cuts that i believe would do real damage to our security, our troops, and their families, and our military's ability to protect the nation. host: these are the headlines that came out of that yesterday in the various papers, fighting for defense. in his second warning in as many days, leon panetta cited the continuing threat of terrorism as reasons not to exceed roughly $400 billion in cuts. below that, "the washington post," panetta warns against additional cuts in pentagon

budget. a panel should look elsewhere, defense chief says. and in the "new york times", senate pleads for no more cuts, a suggestion to raise taxes or reduce entitlement programs. well, let's start with the first part, what we know, which is approximately $400 billion in cuts in the pentagon budget. what's really behind that number? guest: in april, president obama denounced his own budget that was pending on capitol hill that came over in february for 2012. he outlined a goal of $400 billion in defense cuts over 10 years. that's rough where will this debt ceiling legislation shakes out. the different baseline, the estimates, but they're comparable in terms of their long-term impact on the defense budget and military spending priorities. the president chose $400 billion in his initial speech, because that is essentially what the previous secretary of defense had already taken out of the defense budget for various initiatives, as well as the money that he had given back to the white house before we even saw this budget.

basically, the cuts of the last two years have already happened in defense, we're going see that same number applied for the next 10. host: so there's consensus on that number. it was an easy number to reach? guest: well, the last secretary made it look easy. part of that was internally trying to cut overhead and addressing bureaucratic inefficiency and other types of structural reform. the question is whether he's going to actually -- the new secretary is actually going to reap a lot of those savings. it's up in the air right now how much is actually going to be returned to the treasury versus how much just goes away as a result of you're thinking you're going to get more when you don't find out until it's over. host: does the drawdown in the middle east account for that number? guest: they do not. the pentagon basically has two budget. you have a budget for the wars in iraq and afghanistan. it's about $120 billion this year. and then they have the base budget that funds the military

of over two million people and everything they do around the world everywhere else. that's really your peacetime and future budget within the next generation for innovation and technology. that's the budget that's going to be affected, the base budget, as we call it. in the debt ceiling legislation, there was simply -- they were basically saying we will adjust the cap according to spending t. drops next year to $100 billion. we can expect that to be fully funded. host: so that's fungible, in other words? caller: i don't believe so, because it's a hard number. it's protectable. the pentagon is one of the few agencies that puts out a five-year budget every year when they sent it over to capitol hill. we can already see what they were going to issue. we already know what the pentagon needs for next year. we already have the set of numbers that we can work from for this baseline. i guess in theory, there's wiggle room on the overseas war

spending, but in my mind, it's a hard cut to debate. host: we will move on to talk about secretary panetta's fears about the trigger mechanism. let's get a differing point of view from this table earlier this week. gordon adams was here, former associate budget director for national security. and he was talking about these budget cuts and his perspective. let's listen in. >> it's quite obvious this is political rhetoric, but not analytical rhetoric. we have done this several times in the last 60 years, and we can do it now without it being armageddon. that being said, i don't expect armageddon. i would expect, say, $500 billion over 10 years. now, you're talking about something like 8% or 9% of currently projected defense budget. it's been done in the past. it's been managed. we have a reasonable force at the end of it, and it's still

globally dominant. i think what we're looking at is this whole debt and deficit is defense debate is caught in the dance of washington with a lot of rhetoric surrounding the choices people want to make and don't want to make. reasonable people are going to compromise. i'll tell you, they always compromise when they're doing budget at the level of a top line. there's not a department in government that cuts because it's done analytically, it cuts because a top-line negotiation is going on. same is true for defense. host: will you respond to him? guest: guest: well, gordon and i would absolutely agree that the pentagon is going to try to justify their strategy and chase the budget number to meet these goals. this was something that congress plucked out of the air, partly probably of obama's speech that at the end of the day he's goinging to struggle about how they're going to live and work under these numbers and pose upon them, which is not what we would call a

bottom-up review where you determine your budget based on your strategy by any means. i think that these cuts will have much more of an impact as gordon is predicting. ultimately what we could see, whether or not we have the trigger mechanism, the cuts could range from defense to very wide variables, but it could raise from $400 billion to almost a trillion dollars from just the base budget, which is really about $500 billion. and that's closer to 15% to 20% reduction in that funding account. that would be a military that book mentally books different. host: what is the ratio of production to savings? how does that work? guest: well, the challenge is that the pentagon is running these kind of strategy and budget drills in parallel, and so, again, they're chasing these numbers, and there isn't a lot of time to give this great thought, so the

confidence to do what we call salami signing. you give everybody a haircut. all of the services will apportioned appropriately. we've done that in the past. that's definitely the wrong way to going about this crusts. i certainly expect them to require more glasses. if it's managed too quickly or too poolt, it could be devastating. i don't think the secretary was overstating that yesterday. caller: someone who also argued for the federal revisiting of how we spend military dollars, the former assistant secretary of defense at the kennedy school. the right way to trim in the "new york times" this morning, america can scale back military spending. he argues it's not enough to tinker with the defense budget deal, but also we we use the power.

a smart strategy would depend on tailoring our foreign-policy to fit the clock that we have. guest: this is a fundamental foreign policy debate. you do not starved the military in the hopes day you will restrict the president's ability to do something overseas. deciding what america's role in the world is and what you want your military to do is a part of t i absolutely agree everyone should have. what we have seen with previous budget cuts in the 1990's is that reality does not change on the ground. in fact, all three have added commitments? so the difference here from the

1990's is that we had the reagan build off to live off of. we don't have. we have an all volunteer force and they are worn out when. not just the people, but all of their stuff and equipment. host: let's move to the trigger mechanism and the deadline for this is a somewhere around thanksgiving. what will happen if no agreement is reached? guest: they need a simple majority approval from the committee. if they do not get that, the trigger kicks n. the cuts are pretty dramatic and pretty immediate and they hit the department of defense and military the hardest and most quickly. security becomes a much smaller

category of spending then this year. we exclude other agencies like veteran affairs and homeland security? -- and homeland security. the trigger is designed to be pulled? i really don't see a scenario in washington -- secretary leon panetta probably knows this better than anybody that there is a zero political will to take on federal entitlement reform. we have seen everyone's positions become entrenched. i do not see any movement on tax hikes. this trigger is likely to happen which is concerning to him? -- to him. they are going to possibly

overwhelmingly include defense cuts. we are probably looking at this kind of number, 800 or $900 billion over 10 years. host: our last guest this morning is a political science professor at george washington university and she has studied and written about these various extra committees and how they are structured functionally to work or not work. we will get her perspective on that. mackenzie eaglen is our guest, national security studies research fellow at the heritage foundation. we are welcoming your calls, comments, and tweets. i'm going to start with a tweet this morning.

guest: i think overhead and the bureaucracy that supports it is a great place to start looking. what i do not want to get this salami slice think where we start hacking away at all this equipment without looking at these harder choices to make. the department of defense is the single largest employer in america. that is active guard and reserves. we have over 700,000 civilians at dod. these are the kinds of help the exercises that should result from these cuts. host: there has been a major move to outsource contract work. has it saved money? the guest: government is like a pendulum. one of your previous callers

says america has a short attention span. what we saw in the 1990's was a great effort to save money by outsourcing. over the long term, it depends. if you are outsourcing and eliminating, that is different. it is better to eliminate functions as opposed to just simply outsourcing. what we have seen in this past decade is the pendulum swinging far back towards insourcing. specifically on the acquisition part of the house. the majority of that is services, not actually hardware or equipment. we are seeing this major swing back towards insourcing when

federal employees are under consideration because they are highly skilled and professionals. they are more senior government officials in washington. host: for mackenzie eaglen, first call is larry. good morning. caller: good morning. i think we should cut the military budget in half. i don't see no reason for this. we go all around the world killing people. we have no business in iraq or afghanistan. the people of afghanistan -- another thing we need to do is -- in the 1980's, ron reagan

called it star wars. we have been spending money for 40 years. we spent trillions of dollars on its. it is like throwing money down a black hole. we need to close down all of these bases and embassies. we need to get out of the business of war and get into the business of peace. we wonder why people hate us. host: i am going to jump in at that point. closing bases in europe. we are now experiencing some of the results of closing bases and europe. what about reviewing european bases and freeing up continent space? guest: this is something that the last administration just completed. we are drawing down our forces in europe. on the ground forces side

already. that number is now coming up again for scrutiny. it is under examination if that number need to come down even further. a lot of times, the host government shares the cost with the u.s. it is a stop on a global highway. it saves our military time if they are already over there or if they have a place to refuel. it saves lives in germany and other places. we use these to transit to other places around the world. to military is busy. they are in a lot of places. counter-piracy in somalia, counter-terrorism in yemen, homeland defense, flood relief here in the u.s. every single day, guarding the border in

arizona. doing a lot of things everywhere to protect americans. we are unlike any other country on earth. we have global interests and responsibilities. there are few places untouched by our interests and the need to protect them. by argue so long as our interests are there to protect them. host: talk about the level of troops and what their role is. guest: that has been an area where we have been drawing down forces for a while. book should be cracked back open to look at if this is the right force mix at

the time. it is not a stable place in the last five years. we are seeing a lot of provocative behavior from the north korean regime. various nuclear and military shows of force. i am concerned that if we are not there or do not have a physical presence, it will only provoke the north korean regime and teven more. host: this is a comment from joan who writes -- is that correct? guest: is roughly correct. what we have seen post 9/11 is exponential growth in the cost of compensating uniformed

personnel. basically, if you look at the average per capita cost of the person in uniform on the active- duty side, about $150,000 per person per year, so it is a lot of money. we pay the military mostly in benefits of which is why it is so expensive. deferred income benefits are primarily retirement and health care, and education. the single largest driver is healthcare. just like we are seeing on a national scale, the explosive growth in costs in the provision of health care, in the department of defense, the military is outpacing toward national problem by three times. there is no doubt that the department of defense provision

of these types of benefits need to come under fundamental re- examination. host: next is jim from florida up. good morning. caller: good morning. thank you for taking my call. i appreciate you guys. mackenzie eaglen, i think you are a patriot. i served in the navy and served my country. i like the fact that you have "eagle" in your name. god forbid -- without the department of defense and our military, everything else would be a moot point. we could not protect anything else because we would not have a country. i am concerned about that. i am not politically correct. -we have been infiltrated -- i think we have been infiltrated. i am really concerned about that

and i hope we get better about that. i appreciate you and i am a real fan of the heritage foundation as well. host: this comment coming in from new mexico -- host: do you believe that the democrats want to destroy the military? guest: no, i do not believe that. government is about choices. you have to make difficult choices. article 1 of the constitution says the primary responsibility of government is to provide for the common defense of the american people.

it is a fundamental responsibility of the politicians here in washington. as a part of this at the ceiling debate, it is very disconnected from the budget. all the focus was on the discretionary side. i do not know about these -- i do not know enough about these programs to suggest how all of it would change. you could 0 out the defense budget and we have not solved any of america's the scope problems. so i do believe strongly that economic and military security are mutually reinforcing. we need a strong economy to fund a strong defense, but you cannot cut defense in the hopes of saving the economy if you are perceived as a weak nation as a result.

host: this writer on twitter -- guest: that is a good question. when we look at the pentagon budget, like i said, it is about $500 billion. $80 billion of that is foreign intelligence programs, most of which are classified. you can see how small the defense budget really is. if you have to pay 3 million people, that is a big portion of that budget. the rest is really research and development and equipment. but i think as part of the defense cuts, i think the tweet raises an excellent point, that intelligence is not immune to contributing to reductions. host: michelle, good morning to

you. caller: how much of the budget is used for foreign aid where we go into a country and pretend that it is a humanitarian task and then we build it up for the interests of america? don't you think it is time to bring america back to the global looking glass and bring all of our troops home to give them jobs here instead of working them to death for each soldier? thank you. host: this writer on twitter writes -- guest: it is a very small component of the federal budget. is about 1%. our military does a lot of military building capacity around the world.

we work with foreign military and security partners to give them the types of skills or training or resources that they might need to basically avoid having to send u.s. forces later. it is designed to be a cost saver and strengthens our alliances around the world to decrease the threat of conflict. this is arguably a good thing. in terms of our allies doing more or protecting everybody, absolutely not. sea, air, space, and even cyberspace -- our government is responsible in making sure that shipping lanes stay open every single day so free trade to move across the world and basically show up at a walmart where we have good competition and access to all types of things that we want on those shelves.

at the end of the day, america needs to do this because it is in our economic interests as well. host: this twitter writer pickes up on that theme. guest: if you look at the federal budget, and i will go back to the numbers -- 19% of federal spending declining to almost 15 percent and. we are talking under one fifth of every taxpayer dollar coming and to fund defense. what does the government do for me? the only thing i can think of the science building a house because of a mortgage and may be some student loans in college, the only thing that the

government does for me is keep me safe. host: next is a florida, frank is a democrat. good morning. are you there? frank, we missed you, too bad. we are going to move on to north carolina, an independent. caller: i believe using the word defense is quite a misnomer. it is like our psyche has been changed to wear if we cut our $900 billion empire in any sort of fashion, that somehow hurts our defense. there is somewhat an underground black ops or paid for by the cia and more going on in these countries. when people awakened to where one-fifth of their money is going, to kill the contents of thousands of civilians in other

countries, want the people wake up and demand these cuts? guest: i am concerned that as a part of this a debt reduction is happening too fast in terms of defense cuts so we are not having a serious conversation about it like we need to. i think every federal program including everyone under the department of defense umbrella should come under scrutiny and examination and stand under their own merit. it seems only fair. i started out by saying this is the third year of defense cuts. the challenge for me is it is not passing a small test when no other federal agency is doing that. gas, everything in defense needs to be examined from the ground

up -- yes, everything in defense needs to be examined from the ground up. all of these types of difficult questions. host: of the washington post this week had an interesting point and counterpoint. wide defense spending should be cut. this morning, they have every bottle on that. -- they have eight rebuttal on that. -- a rebuttal on that. i am going to ask you to do the same. white defense spending should be cut. -- why defense spending should be cut. he writes --

. we spend more on defense than the remaining countries put together. us.ums it all up for guest: virtually everybody that can be deployed has been. that is how america has funded its defense. you have to significantly ramp up spending during wartime because you cut it so deeply during peacetime. so, the budget growth that we

have seen post 9/11 needed to happen because you are using your military at a breakneck pace. this was not an investment in the future. it was a much different defense budget growth. in terms of america's defense spending relative to the rest of the world, you also have to look at defense spending by other metrics, a percentage of the federal budget and how it has gone up in real dollars, and then as a percentage of the overall american economy. defense spending is at an historic low. right about at 5% of our gdp spend on defense and military. during the cold war, it was significantly higher.

i would argue in terms of the size of our economy, america is in the 20s. that is an interesting metric that does not often come up. host: we have about five or six minutes left with mackenzie eaglen. let's go to martinsburg, west virginia, next. carl is a republican. caller: i can remember when bill clinton did it to the cia. i just hope we do not cut defense spending to the point that something and lot worse happens to this country. thank you. guest: i think you raise an excellent point. our military does not fight in wars to protect our interests

here at home and us as citizens. they are also supposed to prevent conflict. they are not just supposed to be at the pointy end of the spear and kill people. they show and demonstrate so much strength and also have presence around the world. you have troops somewhere or ships sailing somewhere across the world as a show of force to prevent conflict from happening which ultimately does save money. when you start cutting defense too far or too fast, that is exactly what can happen. you can invite conflict. you can create things that are unnecessary. president reagan had this vision of peace through strength. america never went to work

because we were too strong. host: a number of tweets asking about corruption and fraud, money lost in iraq, money unaccounted for in the pentagon. can you talk about what the real scope of that is and what the pentagon is doing? guest: in the war budget, there has been a lot of mismanagement. i do not think anyone can dispute that. there was so much money that flowed so quickly. this was at the same time when families were using body armor in iraq because they did not have the protection. budget went up so quickly to alleviate these problems. what we did see was a gross mismanagement and waste. thankfully, congress took notice.

they worked to oversee a bigger provision of contracts and services in both of these countries. there is still a lot of work to do. i have seen congress take their eyes off the ball in this regard. there is a lot more that can be done. the military has the money that they can use for structural and government projects in these countries and also an area that is ready for scrutiny in terms of the department of defense being unable to pass a financial audit is a problem that everyone thinks in washington is a headache. it has been decades since they have been able to do that. it is going to take a really great partnership with capitol hill to get this done. it has to get done. there is no way that congress

and the military can say -- host: and our next call is from west haven, connecticut. caller: what i do not understand is the debt deal. you could do a good part of reduction of that with social security which is in deficit spending. people are living longer. that is true. are congress has taken -- our congress has taken $1.50 trillion out of social security trust fund which has no principal or interest. the former president' george bush, $1.50 dragon was to cover the hole in social security.

hen will plug it and teh start taking it again. host: let's move to alexandria, va., an independent. caller: i have two quick points. i have done 10 years in the marine corps i think it is a good thing that we are cutting the fat and little. we had too many people walking around especially overseas. to many contractors. these people wasting space and a lot of money. from a more academic perspective, i want to say that when we talk about budget spending for the military, we tie everything back to the national security strategy. look at the president's approach to security. if we follow that along and read

closely, you are seeing a nation-building type strategy where we are going to work on country's development and political development and economic development, and that is tied to our own security. when we involve ourselves with such massive programs that get into socially reconstructing other nations, this is where we do a lot of spending and where a lot of waste comes in. there are a lot more important things that america's interests are taking place. guest: thank you for calling. i appreciate your perspective. i think a lot in uniform would shares that opinion. they think money could have been spent better or it was wasteful, and that is the input that capitol hill needs to hear as they help the department of defense figure out what to cut and what is right, what is

wasteful and what not we should be doing. i agree with you that everything is supposed to be done in the defense realm. you size everything based on what the president's foreign- policy vision is. that is the appropriate way to do this. the challenge here is that defense budgets have been in front of strategy. these two are disconnected from the debate inside the beltway here in washington, and i wish it were not. i hope secretary leon panetta will be able to take a step back and work with the hill on the exercises that you and i are highlighting. host: it is not possible to address the committee directly.

>> the labor department reported this morning that hiring picked up slightly in july. employers adding 117,000 jobs last month, an improvement from the past two months. the congressional joint economic committee meets at 12:45 eastern to look at the details. we will have live coverage. until then, a look at the administration's initiatives to create jobs. "washington journal" this morning talked with a small business administration official for about 40 minutes. we will show as much as we can. let me introduce you to marie johns, the deputy administrator of the small business administration. everybody this morning has been looking for this new jobless number to come out. employers added 117,000 jobs and

the unemployment rate this month has dropped to 9.1%. guest: it is good news. i like to think it is good news that somehow based on the work that we have been doing at the small business administration -- we represent half of the zero economy and half of the people working in our country today. 2 out of every three new private-sector jobs are created by small businesses. the agency has been working very hard to put the tools in the hands of small businesses. host: i pulled a number from the internet yesterday that looks at job creation by small businesses to give a snapshot of where we were. they said that in 1999, small business contributed 4.7 million jobs to the economy.

in 2010, that number dropped to 2.5 million. that is a snapshot of the slowdown in job creation since the recession hit. what is behind that number? what with the impediments of small businesses? guest: it is important to set some context related to the recession. the great recession was the worst economic downturn since the great depression, and all businesses were extremely hard hit. small businesses were hit at a more powerful rate and then larger businesses. what we have done following the recession when the recovery act was passed, that gave our agency to put more capital in the hands of small businesses because that is a large part of what small businesses need to grow to invest in their businesses and create jobs.

they need a technical assistance that we provide. our programs are another important part of our approach to support small businesses. host: i am going to give you the phone numbers because we want you to get involved with us. weoue to hear small business owners prospective. we will put those on the screen. we'd like to hear from you during this segment with mrs. marie johns. the guest: of the downturn was devastating, so we have been coming out of the worst downturn since the great depression. small businesses need access to capital, access to markets, technical assistance for their businesses to grow. as we have seen between the

recovery act and the small business jobs act and the president obama signed, we have been able to put $42 billion of capital in the hands of small businesses. we are seeing the numbers coming back. job creation is on the upswing. the recovery has not been even. we have been looking very carefully at where gaps persist in terms of access to capital and job creation. we have an emphasis at this time on underserved markets so small business owners whether a woman, a minority, a veteran, whether that business is in the rural area, that we are seeking those businesses out and connecting them with resources. host: the wall street journal has a story with this headline -- they write --

host: how can your administration help with that side? guest: that gets to the -- the counseling and technical assistance does speak to how to develop marketing plans. but the economy is not a model. is a very complex organism. that is why the good news about the jobs numbers is a good not only for small businesses but it

is restoring confidence in the economy and causing people to make decisions that perhaps they were reluctant to do previously when they did not have a job. so the fact that we are growing jobs and the economy is getting stronger means that this issue will be addressed as well. the economy has affected everyone in a very challenging way. that is why as we are working to bring more resources to small businesses, that is going to have a positive effect. host: a lot of talk on regulations and the effects on businesses. guest: before this appointment, i spent many years in telecommunications, so i know very personally the impact of regulation on business. the issue is balance. some regulation is important and appropriate. so what we are challenged to do

is make sure we are finding the right level of regulation that makes sense but does not impede a business's ability to grow and create jobs. we have just completed a very of that eight-city tour the president announced a few months ago. we went across the country to ask business owners what do you see as a regulatory burdens? where do you see opportunities for the government to address those burdens? we are taking that input and will soon be releasing a report. host: the first caller is paul from tennessee. good morning. what kind of business do you run? caller: i am looking to go into cable tv construction business. let me take a second -- i want to ask our guest is very

important question. i do not hear anybody saying it. small businesses are taking the brunt of this president's reckless spending. let me ask this lady something. the president came out saying social security people would not be getting their checks. we had $170 billion coming in. he said we did not have the money to pay that. he lied. there is $78 billion sitting on the books right now. that is not including what social security has. if my government tells me a line that they cannot pay their bills, tell me why i should invest in this economy and help get us out of this recession by

starting a small business. guest: what i would ask you to do is recheck your information because this president has been very supportive for small business growth and job creation. president obama has signed into law 17 tax cuts for small businesses. $42 billion was put in the hands of small businesses. we just recently announced the creation of 20 new micro lenders around the country that will have the opportunity to put $50 million and hands of small businesses. there are many, many important resources that would indicate that there has never been a better time to start a new small business. this is a challenging the economy. but this is an economy that the president inherited and is making so many moves to

strengthen the opportunities of small businesses. if you want to starve the cable- tv company, you should visit one of our regional offices and we would be delighted to tell you about the tools that we have for you to start your own business. host: at what point is a business considered small vs. large? guest: we have a definition of small business of being a business that has 500 employees or fewer. within that definition, the vast majority, 90 plus percent of businesses are 10 employees or less. certainly, the majority of the work that we do is focused on those companies, the smaller end of the spectrum, but we have to make sure that we are supporting those businesses that are small

but have the potential for high growth because they are terrific job creators in this country. we have a broad mission because there is a number of examples of the small businesses. we pride ourselves on being able to customize our approach. host: mary on twitter writes -- guest: we had a number of industries -- there are industry codes that we monitor and a review on a regular basis to determine the appropriate size standard to constitute a small business based on the industry sector. small-business in the aerospace engineering category is going to

look different than a small business in a restaurant category. so that work is ongoing. what i would encourage the individual who post the comment to do is to continue to comment. we are constantly looking at standards and regularly have those matters posted in the register. host: marie johns has some hoosier roots. then in washington, d.c., she served as the president of horizon in washington. -- verizon in washington. and managing member of the consulting firm before her appointment on the small business administration. let's take our next phone call. our next call is from brooklyn, chris is a republican.

caller: thank you for taking my call. i have a comment but first i would like to correct one thing that seems to be always out there, and that is that president obama inherited this economy. he ran for president. host: can i stop you? we have this debate about the overall direction. we are focusing on small business. caller: i personally do not think it is good to have a small business administration at all because we do not have a successful small businesses that have gone through them. we have entrepreneurs in america that start their own businesses that do not rely on the government. we could take all of that money and the political appointees, all of that spending would stop, and businesses would hook up with each other the way they

always have. of the notion that you are getting a bureaucrat that knows more than a small business owner is silly bank the government does not create jobs. so many people do not believe that small businesses are the answer. host: thank you very much. you worked in private industry. guest: the notion of being called a bureaucratic after 30 years in the private sector is interesting. what i would say to chris is i would love for him to travel with me and talk to the thousands of small business owners that i talk to around the country. i was recently in houston and a gentleman who came to this country as a dishwasher, fast

forward some years later, now owns five restaurants in houston. he credits his success to the support that he got from the sba. now, he did the hard work and have the skill and business acumen and it gives for running a good restaurant. we were there to provide him access to capital when that was not available anywhere else. there are countless stories like that of others who have benefited from sba programs and technical assistance that the agency provides to over 1 million entrepreneurs every year. chris is right that people start businesses in their garages and spare bedrooms. what the sba has shown is with

the resources that we provide, it is the support that they often need in order to grow to create jobs that our country needs. host: how much money is allocated for small-business loans? guest: we have a budget of roughly $700 million. we have our 7a and 504 loan programs. between the recovery act and the small business jobs act, that was roughly $42 billion in loan capacity for small businesses. the default rate varies. in terms of a general number, probably looking at 10% to 15%. host: does that number concern you quest toward i am looking at a return on investments. do you think that a taxpayer

gets a good return on that investment? guest: absolutely i do. we are constantly looking at our risk portfolio, risk mitigation, because we want to make sure that we are being very careful steward of taxpayer dollars because i am not the only business person at the sba. there are many of us who can with a private sector background and were recruited to the agency for that reason. we also have a mission that i think is crucial to make sure that businesses that have difficulty finding credit elsewhere -- many of the large banks left the small business lending market. they simply abandoned and that market. the fact that the sba can provide a government 74 loans helps banks and other lenders mitigate their risk and make the decision to provide capital that

small businesses need in order to grow. host: greg, good morning. caller: thank you for taking my call. i operate a very small automotive repair shop. the state of vermont is very small. i believe that there are many small businesses here in the state. i have gone on to sba's web site to try to find out access for capital to buy the property that i am currently operating on. as you already mentioned, i have tried to outsource banks here in my area and i am only able to get a commercial loan. i am trying to basically work out of my hip pocket. you had mentioned that the sba had moneys available currently to help out someone like myself.

i set my dvr to record your information. when i go on to sba, there is so much information. last time i went on there, i just got so frustrated. i just gave up. i am trying to keep my chin up. i employed a couple of people right now. the amount of money that i have going out for a lease, the bills for utilities, it is just incredible. if i could purchase this property, i could cut my expenses in half basically. what can you give me that are some interesting words? thank you. guest: thank you for calling. what i would urge you to do is there are two things. you can e-mail me and it would be happy to direct you, but if

you go on the web site, you can easily be directed to the information that you need in your geographic area by inserting your zip code. we have relaunched our web site a few months ago and it is a vastly improved from our former website because it is much more easily navigable. there is a lot of information on the web site, so the challenge has been to try to organize that information in a way that is easily digestible for a small business owner like yourself. go back on the website, give it one more try and insert your zip code. that will direct you to the office that is in your area in vermont, and that is the place to call to get information. that person can tell you about lending opportunities that are available in vermont. host: sba.gov is where you can

find it on the internet. i have a chart of a monthly index of small business optimism. before the recession on a scale of 100 on 10 factors, small business operators were given optimism of 91. trending in the wrong direction in june of this year, 91. i am wondering yesterday after the big drop in the stock market that the role of hope and optimism in the recovery. guest: they are very important elements because consumer confidence is really largely what underpins activity in the market. if you have optimism about with

the economy is going, he will make a decision to take a long war by that durable goods, -- is going, you will make a decision to take a loan or buy that durable good. we want to be in touch with small business owners, whether that is online, around the country, to talk to small businesses to make sure they understand that there are schools out there to help them. i have been struck by the fact that there is an awareness gap. i will a knowledge that and it is something i am working hard on. so many small businesses do not realize what resources are available. every time i have the opportunity to talk about those resources, the optimism is palatable. i can feel and know based on the

input that i get that small business owners are happy to know about those tools. host: we talk about the role -- what is your experience inside government? thewe guest: llwell, government is different from the private sector and there are challenges. at the agency, but there are many things that we would love to do. we have another overseer, congress, where we have to oftentimes rely on the legislative process in order to get the tools that we need to further improve the way that the agency operates. that is a gravity factor that we deal with. in the meantime, we are working very hard to make the agency run as effective as possible. the sba -- when our team came

in, we decided that we wanted to focus on training, building a strong capacity within the agency, as well as focus on making loans and making the other resources available to small businesses. we are working on making some organizational changes to the agency that will help us operate more effectively. we are doing everything we can based on everything we have. the government is a fascinating process. it has been very interesting and disposed of very interesting management challenges because of the differences between government and the private sector. host: let's take our next call. caller: back in the day, when i got out in 1968, coming back

from 'nam, i was informed that you had to get three refusals from the bank, but that is not what i call. i wish sba would work with governors to establish some sort of system where local guys trying to go into business have some kind of assets available through the state, because it is pretty obvious that the federal government is not going to be able to help our governors in 10 years. i just drafted an e-mail to my governor in connecticut suggesting that he get together with sba and other people to see if they cannot get more of our tax dollars in the state of connecticut -- keep more of our tax dollars in the state of connecticut. some negotiable funds that we personally could take as tax deductions as well as contributing to the economy of our state. i don't know what you think of in idea, but i've been

business, and trying to go through the sba, unfortunately, i could not get the three bank refusals gbut i wish you would comment on that. guest: thank you for your question, and you raised a very good point about the federal estate partnership. those are absolutely crucial. we are actually doing important work in that area. small business jobs, like i mentioned earlier, gave the sba a number of tools to strengthen our ability to help small businesses, particularly ied area exporting. in the next few years, 95% of market demand will be outside our country. it is imperative that small businesses are equipped to do more in the area of exporting. we are working hard to make that happen. something we will be announcing within the next few weeks is

>> you can watch all of this online at c-span.org. next week, a look at jobs in america every day next week beginning at the top 15 eastern. we will take you live now to the joint economic committee. that is robert casey of pennsylvania, chairman of the committee. there is a meeting today to look at the jobs numbers, which came out today, showing that unemployment jumped to 9.1% in july. just getting under way live on c-span. >> since 1974, and he has served as the deputy commissioner since 2003, including a year-and-a- half as acting commissioner during the bush administration, so thank you, for your years of service and dedicated commitment to the united states of america. we are grateful for that service. is this your last hearing in congress?

we will try to make it memorable for you. [laughter] in the past few weeks, we have gotten a number of economic reports, including today's employment report, about which we will talk mostly about, and no matter what report it is, i think so many of them indicate to us the the fragility of this economy, and some of the basic weaknesses that we are seeing. the gross domestic product numbers released last friday showed that economic growth in the first half of this year was weak, growing at an annual rate of less than -- unfortunately, less than 1% during the first half of 2011. this week, we have received additional data that suggests that the pace of the recovery is decelerating. months ago, we were saying it was moving too slowly.

now, there is some evidence to indicate actual deceleration. two examples of that or two highlights -- first, the so- called rasm manufacturing index dropped to two board are% in july, while this mark the 24th consecutive month of expansion in the manufacturing sector. it was the lowest reading since 2009, since july of 2009. on tuesday, we learned that in the month of june, consumer spending declined for the first time since september 2009. consumer spending, as many of you know, accounts for 70% of u.s. economic activity. that needs to be growing and not shrinking, obviously. i know that the committee members and those in the audience agree that we need much stronger economic growth. there should be and will be and

will continue to be a bigger debate about how to achieve that. the labor markets, we know -- and we will get further into this today -- faces significant challenges. more than eight quarters into the recovery, unemployment remains above 9%. nearly 40% of the unemployed have been out of work for six months or longer. hard to comprehend that. almost half of them out of work for six months or longer. we need to be immediately focused on providing incentives for job creation. just yesterday, this committee, the joint economic committee, released a report on the near record long-term unemployment workers continue to face. couple of highlights from that -- first of all, while so many groups within this study are having a great difficulty, if you are one of the following, your challenges are even

greater than the population at large. the following categories -- those with a high-school degree or less, older workers, construction workers, and african-americans. those categories -- those groups of unemployed americans face disproportionately high rates of long-term unemployment. second, the longer an individual is unemployed, the harder it is to find work. if you look at both ends of the spectrum, those out of work for more than six months and those out of work at the other end of the spectrum, for as little as five weeks, those who are at the end of the spectrum are three times as likely to find work in comparison to those at the other end. third, employers report they are having difficulty finding skilled workers. we know that is a continuing problem. i think we can move quickly, despite all that bad news -- i think we can move very quickly

on a couple of strategies that will help. first of all, and others have been pushing for the so-called small business jobs tax credit act, which would create a one- share quarterly tax credit equal to 20% of the total increase in employee wages. if you are hiring and increasing your payroll, increasing your wage levels in total, you can get a tax credit for that. vice chairman brady and i and others have been working on the life sciences jobs and investment act. a good idea. it is a way to create both high- paying jobs in the country but also to move forward on healing and hope that comes from the discovery of new scientific advancements. third, i would say it is a way to get jobs back from overseas.

third, we ought to make the research and development tax credit permanent. i do not know why we do not do that, but we should. we also need a new approach to manufacturing, actually have a strategy to make sure that we are following in the years ahead and especially even in the next year. one of the small glimmers of hope in some of the bad economics and jobs data has been manufacturing. this year alone -- i am sorry, since the end of 2009, manufacturing has added 290,000 jobs. a little bit of good news in the midst of all this bad news. we are going to hear a lot more today about today's report, and we know that during the month of july, the economy added 154,000 private-sector jobs. that is good news, but obviously not enough. the overall number is 117,000, a

lot better than they the last two months individually, but certainly not nearly enough. so we've got a long way to go with strategies to create jobs and incentivize the creation of jobs. with that, i will turn to our vice-chairman. >> thank you, chairman. commissioner hall, welcome back to the committee. thank you for your many years of service. you will be missed, and we appreciate all that you have done for the committee. clearly, today's increase in the number of payroll jobs provides relief to the market, mainly because it exceeded such very low expectations. that is certainly nothing to celebrate today. the unemployment rate fell largely because a 193,000 decline in the labor force.

the number of employed people in the household survey fell by 30,000 year the broader measure of unemployment remains over 16%. what troubles me is that we have the fewest number of people participating in the work force in a quarter of a century. those are not signals of a healthy economy. two and a half years ago this month, president obama signed his historic stimulus bill, promising to jump-start the economy, restore consumer confidence, and put people back to work. today, with historic numbers of americans desperate for work, consumer confidence plunging, the risk of a double-dip recession and growing, and the stock market reeling, it is long past time to pull the plug on the president's failed economic policies. i do not fault the president for trying. lord knows he has thrown every big government solution at this economy, but it has not worked as we wanted.

i have now concluded the white house simply does not understand how to create jobs in america or certainly at least not government jobs in america. how much longer must americans watched their economy stumble? after trillions of dollars in poorly designed stimulus and monetary intervention, must 9% unemployment be the norm? after all the big government bullets have been spent, how many more years will families and businesses suffer until america enjoys a strong, prosperous economy again? america has been more than patient, but after two and a half years, enough is enough. you have tried and failed to revive its economy. america deserves better than a second-rate economy ridiculed by other nations. when the economy is headed in the wrong direction, common sense dictates you change course. instead of threatening to raise taxes on job creators on main street, we need to lower the

cost of capital, increased business investment that has proven time and time again to create real jobs. instead of rebranding companies as somehow an american for competing in the global marketplace, we should tear down the barriers, reduce the cost of regulation and taxes that place the miles behind at the starting line, and lower the tax gate so an estimated $1 trillion in american profits stranded abroad can flow back home to be invested in america right now in jobs or research, business expansion, and a stronger financial future. passing the three pending trade agreements will create 250,000 american jobs. putting our energy companies that to work in the gulf, alaska, and in a bun and america feels on shore and off will create more than 1 million new american jobs this decade. another 800,000 jobs will be saved this decade merely by calling a halt to the

president's new national health care law. that will also eliminate costly cloud of worry among small, medium, and large job creators throughout the country appeared much more needs to be done, but perhaps nothing more important than the white house and in its campaign of demonizing our job creators, who built the economy and will do so again if washington can get out of its way. the news reports on the economy today are often given with the capital or the white house as a backdrop, not along main street or in front of the headquarters of an american company the entrepreneurs to make critical decisions and create jobs have been forced to become washington-century because washington is directing this economy to a degree not seen in our lifetime. that is the problem. washington needs to get out of the way and needs to end its job-killing rhetoric, the

regulations, and interventions and give americans confidence to do what we do best. we need to create economic opportunities based on what the --ket demands, not on what's what washington demands. we know our perilous debts are shaking markets in confidence and abroad. we also know from economic study their our global competitors in similar straits have boosted their economies significantly and soon by reducing their debt, by cutting spending and restoring business and consumer confidence. congress has taken -- excluding the winding down of the wars in iraq and afghanistan, without recent passage of the budget control act, the government would grow to over 23% of the size of our economy this decade.

with its passage, the federal government will shrink to 21.6% of gdp this decade. president reagan began to reduce the size of federal government relative to the economy as well. the federal spending shrank from 22.2% of gdp in 1981 to around 18% in 2001. entrepreneurs on main street traded 37 million new private- sector jobs, but we have lost almost 3 million private sector jobs. i will conclude with this -- america deserves a strong growing economy that fully employs are people and is the envy of the world. we cannot do that to we pride that heads of washington of the throats of the job creators. we will create jobs if we change

course today and get government out of the way. >> congressman cummings -- >> good to be with you again, i concur -- commissioner paul. i am sure you have given your blood, sweat, and tears. so many of our public employees are getting called everything but a child of god. i want to thank you. i thank you for what you have given. i thank you for the lives you have touched and i say thank you for a grateful congress and a grateful senate. and also a greater will nation. i also want to take a moment -- today's report indicates that in july, employers created 117,000 jobs and the on a planet right dropped to 9.1%.

these numbers are moving in the right direction but obviously, we have a long way to go to resolve our economic challenges and to insure that everyone who wants to work can work. last week, we learn that the economy grew just .4% the first three months of this year and only 1.3% in the second quarter. in june, american consumers decreased their spending. additionally, the already battered housing market which continues to be a severe drag on the economy took another hit in june as existing home sales fell sharply due to cancel the sales contract. unfortunately, the policies coming out of congress are doing nothing to rebuild confidence or spare us economic growth. according to many experts, they may even hinder the recovery and

causes us to give up the small gains that we have already won. an economist at barclays capital has warned that the debt deal that carper struck earlier this week could reduce economic growth by 1/10 of 1% in the first year alone. he said when the economy is only growing 1.5%, many economists feel this is not the right time to be fighting fiscal restraint. similarly, a chief global economist at deutsche bank advisers asks," why would you want to read -- impose restraints on an economic recovery that is already fragile?" you remove spending power from the economy at a time when it needed. there is likely -- that is likely to make the economy weaker and in turn the budget gets weaker because tax revenues

are going slow. the recent nosedive in the dow suggests that others may agree with this assessment. investors like all americans are worried that congress is unable or unwilling to address the most important issue facing this nation -- the need to create jobs, jobs, jobs. some of the terrible consequences of our failure to focus on restoring economic growth are made clear in the results of a recent pew research center analysis which found that the wealth gap between white households and african-american and hispanic households is the largest since the government began reporting on income 25 years ago. specifically, the housing bobbled and the great recession took a much deeper toll on black families and hispanic families than it did on white families.

we can do better and we must do better. i voted against the debt deal because i could not in good conscience support the use of a manufactured crisis' to implement ideologically-based policies that would further threaten our nation's economic growth and job creation potential. further, the debt deal tends to reduce our debt by reducing discretionary spending, requiring deep cuts in programs critical to our most vulnerable citizens. at the same time, the deal demands nothing, nothing from the wealthiest americans or from corporations that are receiving billions in tax breaks. i believe that as we work to reduce what certainly is an unsustainable level of debt, we need a balanced plan that prioritizes the restoration of economic growth and that upholds our full faith and credit of the

united states for what should be a national commitment -- for what should be shared sacrifice. i believe this is only fair given that the national debt we now face has been created by increased spending and by forgone revenues resulting from tax cuts provided to the wealthiest among us. with that, i yield back. >> thank you. i want to introduce dr. keith paul. hall. he is the commissioner for statistics for the labor -- for the statistics department. he analyzes and estimates the central statistical data to the american public, the u.s. congress, other federal agencies, state, and local governments, business and labor. dr. hall served as chief economist for the white house

council of economic advisers for two years under president george w. bush and prior to that, he was chief economist to the united states department of labour. he also spent 10 years at the u.s. international trade commission. he received his b.a. degree from the university of virginia and his phd degree in economics from purdue university. we're grateful you are here with us again and we look forward to your testimony. >> thank you. thank you for the opportunity to discuss the employment and unemployment that we released this morning. non-farm payroll employment rose by 117,000 in july. the unemployment rate was 9.1% in july and has shown little defensive movement since april. private sector employment increased by 154,000 over the

month. health-care employment rose by 31,000 in july as hospitals and ambulatory care services added jobs. retail trade and but increased by 26,000. and love and expanded in the manufacturing sector by 24,000. mining employment grew by 9000 or the month and was up by 140,000 since the most recent low in october, 2009. employment in professional and technical services continue to trend up with industries adding to refer to 6000 jobs since march, 2010. health services was flat over the month. other private sector industries showed little or no change in july. the employment in state government decrees by 23,000 over the month. the decline was almost entirely due to the partial government shutdown in minnesota. local government employment continued to trend down over the months since an employment

peaked in 2008. local government has shed 275,000 jobs. from the survey of households, the on employment rate was 9.1% in july. the jobless rate has held in a narrow range between nine. 0% and 9.2% since. 44% of people have been out of work for 22 weeks or longer. this proportion was unchaste over the month and year. the labor force participation headed down from 64.1% to 63.9% in july. the proportion of the population unemployed was unchanged over the month at 58.1%. non-farm payroll employment rose by 117,000 in july with private sector adding 154,000 jobs. the unemployment rate was little changed at 9.1%.

as i close my official statement, i would like to take a moment to recognize my colleague the deputy commissioner of bls. this is his last appearance before the joint economic committee after a 37-year career with the bureau of labor statistics. he is retiring in august i thought it would take a moment to voice my appreciation for his work and make a note about is a clear rebuke -- about his career and accomplishments of the year. he joined bls in 1974, a graduate of the university of maryland with a degree in economics and social worker in his first position was eight gs-7 economist position and he has now risen almost entirely through the ranks. he has held several positions including supervisor, economist, chief of the division of labor force statistics and assistant commissioner for a liberal analysis. he has been the deputy commissioner since 2003 and

served as the acting commissioner between 2006-2008. he has been by my side of these hearings and in the day to day operations of the bureau. phil has directly work with literally most of the members of the bls family. he continually meet with every new staff member to walk them into the bureau as part of our new employee orientation. he has been a big part of our long and rich tradition as an independent agency charged with providing accurate data free of political consideration or manipulation. he has been a big part of that and he will be missed. on behalf of all the employees, i want to convey our sincere gratitude of his service for the american people. we wish him along happy retirement. >> thank you very much for your testimony as well as your

tribute to phil. i wish some of the economic news was as upbeat as your tributary e. i wanted to start -- there is a lot to talk about and a lot to be concerned about, frankly. one of the sentence and from your statement that just jumps off the page is at the bottom of page two. "of the 13.9 million persons unemployed in july, 44.4% have been out of work for 27 weeks or longer." that is a stunning number. it has been a recurring problem about long-term unemployment. can you put that in some historical context in terms of -- of months?on

>> the number of long-term unemployed, the share of the long term unemployed, work at easily record levels. it has never been this high in the history we have been collecting this data. the number it is extremely high. it is particularly concerning because one of the things that economic research has consistently shown is that the lumber somebody is unemployed, the longer it takes them to get re-employed. this will be a real challenge going forward. the median weeks of unemployment has basically doubled during this recession from five weeks to 10 weeks. there is a large share of people who have been unemployed for more than one year.

these numbers are clearly very >> >> you say they are historic numbers? >> both in level and percent in any way you look at it. >> in the testimony i gave today, i mentioned a couple categories where the numbers are disproportionately higher. i did not put the number is in but i want to review those. the african-american unemployment rate in this report is what? >> it is 15.9%. >> what was the month before? >> it actually declined 3/10 of 1% but that is not statistically significant. >> the african-american number for most of last year seems like it has been in the 14-15 range. is that right? >> yes, it has been probably over 15 for most of the time. >> i also mentioned a few other

categories. the americans who are unemployed and have a high school diploma or less, what number is that? >> that on point rate is 15%. >> that has been there that i that long? >> yes. >> because there are so many reports and some as data out there and sometimes it is hard for people that follow it closely to keep it straight, we know we get the unemployment rate derived from the so-called household survey. those numbers have not been very encouraging. that household survey has indicated a weaker employment situation than the survey of employers.

how would that be relevant? >> four months and months, you will sometimes the difference signals before the -- between the household and the payroll. if you look at it over a slightly longer time like three months, they tend to move to get a pretty well. -- together pretty well. you don't often get a conflicting picture for very long between the two. >> if you could describe the survey of employers and how that is arrived at? >> the employer survey is an establishment survey. we are surveying places of work and it is a very large survey. it is something on the order of 440,000 establishments but it represents something like 40 million people we are counting directly every month is a very

large survey. and it is pretty accurate. the drawback is we are surveying employers who are just looking at the number of people on payrolls, what their average hourly earnings are doing and we want to get more rich detail where we go to the household survey and collecting demographic information about education and ethnicity. the two together give you a complete picture or as complete a picture as we can of the labour market by month. >> thank you very much. >> i share the concerns about the long-term unemployed and the longer they're without a job, the bigger challenge is getting them back to work. one of the areas that continues to trouble me because it is a sign of weakness in the labour market rather than strength is the labor force participation, how many people are actually in the labour force or actively participating.

it has declined yet again in july to about 63.9%. this is the lowest since the early 1980's. it continues to stay there. are we selling into a new normal where there are going to be fewer people participating in the work force and therefore higher unemployment rates? >> i hope not. know but i can tell you that so far in this recovery, we have seen no recovery at all in the labor force participation. that is something that is typically starting to rise and should rise during a recovery. that is an important phase of the recovery is when we start to get people entering back into

the labour force. once that starts to happen, we could get a better idea of what the new normal will be and what the participation rate will be like. >> it looks like it will take a while. any ideas what the factors are? >> this has been a severe and long recession and we have had a large number of unemployed. although long-term unemployed have stayed in the labor market longer than in the past, we still have quite a few people exit the labor force. entirely. i think it is the severity and length of the recession. >> at the current rate of this month of 117,000 net jobs, for the average person back, wondering how long we'll be stuck in tough economic times, at the core rate of 117,000 jobs

per month, how long would it take to regain the payroll jobs total we had prior to the recession? i understand it would be years. >> at 117,000, we would never regained. you need about 130,000 just to absorb the population growth. in terms of recovery, you should look at how far above 130,000 we should get. that is really the recovery. 117,000 is still treading water. >> thank you. congressman cummings. >> thank you very much. i was listening to what you were saying. theh regard to people in labour market coming back in. let's talk about those who are starting out.

a few months ago, millions of our young people graduated from high school and college and while many of them are pursuing higher education and we have had testimony before this committee in the past where young people -- we were told that young people, many of them were basically kind of spending going into the job market and depending upon their parents, staying in school to get master's degrees and graduate degrees. what kind of pressure does the influx of job seekers place on the labour market and what are the employment prospects for recent high school or college graduates? >> i think our data supports what you said, that the new entrants into the labour market

are having a difficult time finding work. if you look at something like the employment to population ratio and break it out by age range, members of the population that are working age that are 25 and below, the employment population ratio is very low and it declined considerably during this recession. the big concern is that at some point you start to feel like you're getting a generation of high school and college graduates who are not finding work. that could put a real strain on the labour market going forward. that is something that we should be concerned about. >> the significant part of the 2009 recovery act was a provision to a state and local governments to protect jobs of

teachers, firefighters, police of a server ,etc. much of that aid is coming to an end. is the state and government local job market trends and how much are the trends in this market contributed to the overall rise in unemployment? >> right now in most industries, we are no longer losing jobs. we are at least holding constant and growing in some. one notable area where we continue to lose jobs his government employment. in particular with both state government and local government employment. they both lost significant numbers of jobs, more so than in most past recessions. with state government, it might be the biggest decline we have had ever during a recession. >> it appears that less money will be going to the states. it has always puzzled me -- we

hear these comments that we should not raise taxes on the richest of the rich during a fragile economy but at the same time, in my state, we have had to lay off people and we had furloughs and i'm sure that is happening in a number of states. yet these people and even on capitol hill, in our committee that i am the ranking member over, we have employees who have taken a 5%-10% cut and we have federal employees whose wages have been frozen. and that is in a fragile economy. can you talk about the minnesota situation? your referenced it and tell me about that as it relates to state jobs. and your statistics. >> will not produce the official

statistics for minnesota but -- we have not produced the official statistics for the state of minnesota. they laid off about 22,000 workers. i believe they held onto about 13,000 that was a significant layoffs. that was pretty much the bulk of the decline in state employment this month. >> we've got some folks getting ready to run out of unemployment benefits. it is predicted that it is possible that those are not extended, we may have a zero 0.5% decrease in gdp. how might that affect the job situation? >> i don't want to speculate too much on that. certainly, the unemployment insurance benefit is a real significant policy concern. i am not sure i want to make a connection between the two.

>> thank you. commissioner, i want to look at some of the areas where there has been an increase. i want to add some good news here. the private sector number is up 164,000 which is good news. but not good enough. i notice that number and i want to see if you have this information nearby. i remember going back in the january-a p paroleeriod, we are getting three months in a row or private sector job creation -- where private sector job growth was above 2 20,003 months in a row. >> it averaged about 240,000 jobs per month.

>> this month is a good number but i was noticing that where we got growth -- the reason we got 154,000 private-sector and 117,000, health care was up by 31,000, right? >> yes. >> retail trade 26,000. >> yes. >> manufacturing of 24,000 and mining up 9000 for the one that took the biggest hit was government and that is all government, right? >> that's correct. >> in terms of the private sector number which is pretty important, ideally, what would we want? what would be a healthier number? if we were averaging in the

private sector -- 150000 within the next few months? with the private number after the close to what the overall number is? we know we can recover one of its 17,000. we have to get that closer to 200,000 or more. and the correlation between private sector growth and the help of the economy? it is a better to focus on the overall number? >> it is fine to focus on either one. the private sector is giving you some idea perhaps job creation. the government numbers are important but they are an indication of government employment but not quite the private sector. in terms of strong job growth, we are so deep into job loss, we

have lost quite a few jobs and have fallen behind that we really need really significantly higher job growth than we have had to make a dent. even then, it would probably take years. to recover the jobs. >> i was noticing the manufacturing job number was up. a good part of that is automobile manufacturing? >> yes, motor vehicles were about half of that. of the this part mfg. #going up in automobiles, is that rebound partly a result of supply issues as it relates to what happened in japan? >> i think it would have been hard to attribute and figure out

much of the impact of japan all along. the evidence now if you look of something like motor vehicle inventories that whatever japan a fact there was before is now out of the system. inventories are now back to normal. certainly now and maybe going forward, you'll probably not see any impact. >> one more question -- on the government number, can you tell us what the overall government number, the decline, has been from july 2009 - july 2010 until now? how many government jobs have lost? >> we are down about half a million jobs. >> thank you. >> i cannot resist asking you this. early this morning when jobs umbers came out, mark azanzandy

called these numbers fabulous. would you say the same thing? >> it is welcome to see the numbers but the job growth increase but they are not fabulous. they are still not strong. >> and aias ro mr.an that as well? it provided some relief only because we were so worried in the last few days where the economy is headed. it is no secret i am not a big fan of the stimulus. it was a lot of money and a lot of dead and few jobs and the impact was pretty limited. we were told that if we passed it, unemployment would be 6.3% today and that is way off. there are about 6 million jobs short. i continue to feel we were told

to take the debt that you will get jobs and we certainly got the dead and that is a drag on our economy on business confidence and family confidence. when you look to the job gains in today's report, one view of the job market is that as laos return to what they were before the recession, the job numbers improved because new hires have increased very little. they are far below what they were before the recession it seems premature to speak of a real job market recovery to begin with and a meager job gains recently are not a surprise. this is the argument that the former council of economic advisers chairman makes and i agree with that. as a look at this report, commissioner, is there a way to distinguish between job gains that result from fewer people

leaving their jobs and job gains from a sustained increase in hiring? that sensitivity in different signals of the help of our labour market. -- they send different signals in terms of the health of our labour market. >> we look at how many people are exiting jobs and how many people are entering the labour market. your observation is correct. most of the improvement has been that the number of people losing jobs has leveled out and stopped going down. we have not yet gotten a significant increase in the number of people entering the employed. >> is that also why we have fewer people in that market while we had 190,000 step back out of the labor market this month? >> that is consistent with what i mentioned with the labor force.

one thing we would like to see is the labor force start growing because people think they will be getting jobs and people start to expect they can move from unemployed to employed in that has not happen very strongly yet. >> retail jobs were up slightly in report but recent reports of the consumer spending down for the first time in a long time. is there a mismatch there? it is a timing issue when the survey was taken? >> there is a timing issue. some of the earliest that we have from july and this is the start of the third quarter and the consumer spending numbers are back from the second quarter. >> what kind of seasonal adjustments do you make for this time of year? >> it depends by industry.

in motor vehicle production, there is a good season because plants close down in july to retool. they reopen in august. there is a part of the bear. teachers around this time. in june and july leave the labour market for the summer. we have a season there. the last month season was the big one and that was about -- and that one was about 1 million. we expect the employment to go down by 1 million because of seasonal job loss in june. we adjust for that. the seasonal this month is not quite so big. >> thank you. >> the congressman cummings? >> when you look at the rate of loss of government jobs, when you look at that as a portion of all jobs lost, is a trend in the

same over the last year or so? if you lose 50,000 jobs and 10,000 government jobs, is that the norm for the last several months? >> over the last two years, we have grown about 700,000 job. we have lost about half a million government jobs. the job growth would have been not double but it would have been close to double what it has been without the loss of government jobs. >> centre mccarren hazmat click mark zandy was one of his

advisers. -- senator john mccain has made it clear that z markandy was one of his advisers. he said we have to move from cutting to creating jobs. i am trying to figure out if we continue to go at the rate we are going, in other words, if we don't have -- if we don't come up with methodology to create jobs, we will find ourselves in real difficulty and we will only slide downward. i don't want to see that happen. i know the numbers are not great but what would you tell the president today if the call the right now -- if he called you right now?

what would you say? >> i would say it is welcome news that the job growth has accelerated. over last two months. that is good news but it is not yet strong. this is pretty tepid job growth. we will have to do better in job growth in order to start to really recover in the labour market. >> the african american numbers are pretty stubborn, aren't they? >> yes, they are. >> what about the hist hispanic numbers? >> the unemployment rates to some degree underestimate the problem. the labor force participation rates for both those groups are below average. they sound battered but and maybe worse than it sounds. >> i would guess there are some areas of my district where the

african-american male unemployment rate may be as much as 50%. whenever i see those numbers, i say they are probably low. the chairman talked briefly about this whole correlation between the amount of education and the impact that this recession has had on folks. do you see that trend continuing, the less education you have, the more negative impact the recession has on folks? >> absolutely, the unemployment rate for those with less than a high-school diploma is about 15% and those with a bachelor's degree, is only about 4% which is a pretty significant difference.

>> if someone was not watching us right now and they were trying to figure out whwhat kind of feel they might want to go into and what country they would want to get, what area they might want to move to to get a job, what would you say based upon -- i know you don't like to draw conclusions. based on what you have there in front of you, what would you say? >> obviously, education pays off and is very important. the united states is like other wealthy countries. we are a country of service jobs, service-providing jobs. something like 70%-80% of our jobs are in the service- providing sector. that is important.

you get into some things like the demographics that we've got going on like the health care jobs which i expect would have strong growth going forward as we have an aging population. that is the sort of thing -- the sort of advice i would give. >> thank you very much. >> unless there are further we'reons, mr. ahall, grateful for your testimony. phil, we hope you can come back in your years of retirement. you said you will be fishing but if you can squeeze in some hearings between fishing, we would love to have you back. unless there are questions and comments, we are adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

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[no audio] [no audio] [no audio] >> the unemployment rate went down to 9.1% in july and on monday, "washington journal" begins a week-long look at employment in the u.s. and begins with the work force training program, tuesday technical education, wednesday, public-private partnerships, thursday federal job programs, and friday, women in the

workplace. our live coverage on cspan continues. tonight at 8:15 the young america's foundation continues its national conservatives to the conference. rijh lowery will talk about the party of lincoln at 8:15. "the communicators" takes a look at cyber security at saturday the 6:30 eastern. >> the ayes are 74 and the nays are 66. >> with the debt ceiling bill signed into law, watch the debate from the house and senate floor and see what your elected official said and how they finally voted with the cspan congressional chronicle. there is video of every session and complete voting records and when members return september, follow more of the preparations process including daily floor action and committee hearings at

c-span.org/congress. >> the house of representatives has been a out a which already this year including this week. have you got a week's vacation yet this year? >> she tries to take a slightly irreverent view on washington and the u.s. that we are willing to step outside the box and try something different to figure out how to make tv news exciting and entertaining and informative again rather than, i'm sorry, the garbage that it has dwindled down to be. >> to talk about her show on sunday night on "q &a." >> next, a british journalist discusses the anti-government protests in syria. the program includes questions on the audience and was hosted by the london-based front-line

club, a charity organization that promotes the independent journalism. on thursday, dmitry medvedev made a new appeal to syrian president asaad to carry out reforms and reconcile with his opponent. time. busy you are, and we i will all, except to please, this is your meeting. if you are not hearing the other side explained, please say early, did not wait until the end and say you are disappointed. say it early. audiences we intend it to life changing issue properly, which means with you want us to go. to keep our discussion four area.

we will end with predictions. update the situation on ground, the protesters, the regime. topics. welcome, everybody. panelists to yourselves and give us in a statement that a short your or your briefing for us tonight, the thing you most want to know at this critical time? thank you, i am the chief editor osyriana opposition television in london. frame the debate on syria in a way that i think is accurate, in a way that i think best reflects the reality ground. >> which is? >> that is not a struggle between opposition and the government, but between the

what flourish. >> sue? newsnight." >> can you hear? no? >> my name is sue. i think i was the first broadcast journalist to get into after the trouble began. is a point that the burmese monk once to me, can any revolutionary movement, can any people succeed when the government shows an insatiable and consistent appetite for and murdering its own people? >> my name isaniel. i am a freelance journalist. was the deputy editor of the

current affairs magazine in damascus. >> do we have an application? if so, let's put it to use. >> i will speak up. i worked as a freelance i in the mid february. what i'd like to talk ithe growing movement and syria. -- the growing movement in which may be disorganized chaotic and have many different elements to it, but there is a movement of people of the world to and do everything they can to understand. consultant in the u.k. as well. i came from damascus 10 days ago.

i% the point of view that the best way forward for syria is to keep the current government and have a change from within. that so of the violence has intensified a. -- has intensified it. it has sent the wrong messages demonstrators, and now syrian government, even though it has many points to declare, cannot give it to everybody else in the world. what i would like to talk about today. >> my name is chris phillips. completed the international identity in syria, which involve me living in syria for two years. i could tal about the economic

situation of people want to, which can probably be best as absolutely dire, but what i would like to race to the issue about sectarianism in syria. i met many people who would that sectarianism is not prominent in syria ashe media wants to portray it, but i am very worried about recent reports of attacks on different groups, and i would like to raise that point with the group. >> thanks. coming with this question. would it the two journalists best view, an update, if you are locked into news, the security council, if social media reporting during the meeting. will you situation is and other cities? start, sue.

the army has fought back the regime, has fought back. they estimate 140 fatalities and many more wounded. little enclave, how syria cou government themselves before the army decided to move in. been an explosive month for syria. in syria, it could be arrested group of people meet in a place, which is why it ramadan, when thousands go to their mosque every day, it -- it is a chance to demonstrations. this is what had happened, and the army was waiting for it to happen. and they retaliated in a brutal way. week --

>> sorry, what we want to hear u, daniel. give him a microphone. close. start again. >> i was in the country last week, and at the time it was part of this enclave, if you would call it. there was no security on the streets, no military, no police. the streets were full of young kids, among barricades, standing in the streets. mostly, they were carrying sticks and so on, but there were kids, mostly teenager evidence of violence, there are

weapons all over syria. syria, it is very easy to get hold of guns and ammunition, but people have not used them, or on occasions people have used weapons. now remains have security, torture, and they have not full insurrection. at the tank put down? >> i think we are in the first week of ramadan. regime, after ramadan, if the regime emerges

than what it is now, then i think we could very well the beginnings of a civil war in syria. the slogan from the beginning of death over ty." there is no going back, as far as they are concerned. they know if things go back the work, there will be a network of informers. however, after ramadan, if the regime is vibly weaker, i think it could spell the beginning of the and thend. >> chris phillips, but do you agree with this assessment, the

whole arabs bring it is into three weeks in syria? the uprising succeeds in three weeks? say thentire condensed. certainly at a key juncture, the gloves have come off by the regime. he isome kind of reformer, some kind of character who is not wilng to use violence. clearly been involved and willing to use force. in for civil war to break out, you need another se, you need people fighting back. one of the reasons thathe peaceful movement is taking that slogan is they know full well if ever there is a regime, if

ever there is justification, . it is not like libya, where of the with hardware switching sides. the update of the situation on the ground, so i will come back to that. what is your view? you said you did not want a change of regime? what is the critical nature of now, in your eyes? wait over. the civil war is already starting. my humble opinion, this is the regime has toughened up. if it had not, the other side matters into their own hands. that is my perception. syria right now is very much pulverized. in damascus the past 10 days, since when i

is myself during the 1980's growing idolizing the president, idizing the military. that is how diehard supporters are being reared at the moment. feeling is there are problems. homes, there has been a lot of sectarian tension. me the people on the do not listen to the of the other people. >> is the regime right to now? that if they did not, people into their own