[laughter] >> the work schedule that was put out? >> there were people who were not happy with me about that. last december, when the congressional calendar came out, we only had 153 days in session. i sent a letter to the majority leader, eric cantor. remember, i had not been sworn in yet. [laughter] i told him that the calendar needed some work. i said that i did not see how it was possible that >> that's on us. when you look at those 12 appropriations bills, one of the questions is what is the

priority in washington d.c.? what's the most important appropriation bills? where the tears we can establish? maybe some of these bills should be on a two-year cycle and not a one-year cycle. we you are never going to catch up to them. if we have these continuing resolutions, that means the united states never has a federal budget. we have to spend time making sure we have the right type of schedule, priority and focus to get things done, and then we can come back and sit down for two or three days with our constituents. there are a lot of pressing issues we need to attend to in washington d.c.. this schedule was a little bit lacking to me, especially when you come from a military background. when you are in a combat zone, it is 24/7. >> will we actually ever cut and

the federal government staff in washington d.c.? >> i will tell you this. you laugh, but one of those appropriations bills deals with the legislative branch and we of cut ourselves another 7%. you do see a lot of cuts. i've told my chief of staff that the money we have allocated, i want to make sure we have 10% below the money we are allocating because i want to turn that back into the treasury. those are the type of things we have to have people doing. [applause] >> these questions are election- related. david from royal palm beach wants to know what will be done to prevent voter fraud in coming elections? [applause] >> i know we have the chairman

of the palm beach republican executive committee. i think regardless of your party affiliation, this is what you need to do. he to get involved in the process and volunteer to be a poll watcher to make sure we don't have some of the nefarious things that could happen happened down here in south florida. south florida has a bad reputation when it comes to elections and we need to clean up. it is incumbent upon us to get engaged and make sure we do have good, fair, proper and elections and we do not have intimidation and some of the things we saw occurring out there. >> jerry has been following the presidential race closely. he wants to know why you think governor perry has become so popular said quickly. >> i don't know. maybe because he wears cowboy boots. i do not know. i cannot tell you.

i can tell you this that it is still pre-season football. you still have a lot of people to cut off the roster and this is a marathon, not a sprint. let's see what happens by november or even the end of the year because it only takes one single thing to flip. i remember howard dean. he was way ahead and everything like that and one single thing and howard dean was forgotten. politics in the united states of america is very interesting and we have to just be patient and watch this process and we have to continue to talk about the issues are pertinent to each and everyone of us. there is a difference between a midterm election cycle and the presidential election cycle. in the midterm, you get people who understand the legislative process and people who really understands what a congressman and senator is at the local level. you see an incredible increase

of people to participate in presidential elections because it becomes more so american idol. we have to be prepared for that because there will be people who do not know who they're going to vote for one week before the election and all of this item, they like his suit or they liked his smile or what ever. that will be the thing that puts them over the top. we have to educate ourselves and be attuned to the issue as we go forward. but it is preseason football. >> there were a couple of people here, we're going to talk about the budget. i know you expressed some opinions about it early on. but john from west palm beach is concerned about having a budget that is not balanced. what are your opinions on balancing the budget? >> you have to. i believe 47 are 49 of our states have a balanced budget amendment.

the federal government needs to have that. we continue to do with you see happening with the fed were we are monetizing debt, keeping interest rates at artificially low levels, printing more money, we are just exacerbating the situation even more so. when you study what happened in japan, they tried nine stimulus packages that kept them in the recession. we cannot continue down that path. we have to have a balanced budget amendment and get away from the baseline budget which means each year we raise it but then we say we're going to cut it but it's basically a race. we have to get back to a 0-based budget system. those are the structural reform things that has to happen. it takes 5 miles to turn the aircraft carrier. these things have happened over 30 years. the financial meltdown of 2008, you can trace it back to the community reinvestment act. think about all of the things

that happened along the way. think about how we created fannie and freddie. how we repealed the glass at stiegel act, so there is no separation between investment banking. we continue to go on and on and then the 30 years later, you have a meltdown. if we can get to the point where we do not have financial election cycle sound bites, where we start to look out 30 or 40 years and understand the policies and ramifications thereof, then we will get things on the right footing in the united states of america. >> there are concerns about the 14 trillion dollar deficit. one of the most important things that can be done to reduce that? >> that's the debt. did that is what leo and the deficit is the difference between the revenues coming in and spending going out. we have to institute fiscal

responsibility in washington d.c.. we have to understand what are the constitutional mandates of the federal government and get the federal government back on the right size and scope to perform their federal duties. what build america? big government? the entrepreneurial spirit? if we continue down big government's pass, the debt and deficit will get bigger. if we believe in the entrepreneurial spirit, will have the right kinds of policies to grow the private sector, which means we will reduce the debt and deficit. that's what we have to do. >> [inaudible] >> i think you have to reinstate glass/stiegel and repeal sarbanes-oxley. >> that was my next question. do you support reinstating that? >> you have to. we have blurred the line between investment banking and commercial banking. there are people out there who

are into things they should not be into. the dodd/frank says collapse of the -- does go after some of these larger banks, but if it's worth regulating, sometimes people believe it's worth over regulating. now small banks are caught up in as well. when tim geithner testified before the small business committee i sit on, i asked one symbol question -- what are we going to review dodd/frank and clean up to make sure we're not penalizing our small community banks? he told me he would look into it. [laughter] >> that question was from thomas simpson. julie is concerned about some of the spending in washington d.c.

[unintelligible] [laughter] [applause] julie wants to know can congress cut off the travel allowance? [applause] this is on c-span, isn't it? i think that is something -- in the military, to teach you one simple thing -- leadership begins with the leader. it is about setting the right example. the president is going to be watching me and you need to lead by example. [applause] >> this is a question from judith from north palm beach. he wants to know what we can do

to make public schools more accountable. >> back in the late 1970's, and we had health, education and welfare, the decision was made to make it a part of education back in the late 1970's. the department of education had about 500 boys and a budget of $18 billion. the part of education has 5000 employes of the budget of $85 billion. education in the united states is broken. i can say that because i spent a year teaching at deerfield beach high-school, and it was such a pleasant experience i've volunteered to get afghanistan for two and a half years. [applause] [laughter] what we have to do -- seriously. we have got to make education

relevant in the 21st century. we cannot believe teaching a kid how to take a test is teaching a kid. it's not. [applause] let's start involving our private sector to go in and teach the practical applications and the theories we're trying to teach our kids. my 14-year-old daughter who just started high-school can do things with a computer that are unconscionable to me. i can't know how. but guess what? if we don't tap into that level of intellect and in acquisitiveness, then what happens? they're not challenged. if we have kids that continue to believe that the age of 16 that if they fail the test, the have no future and they drop out. then what happens? they become victims. they become dependent on something. that something is called

government and therefore government has to take care of them and that is less and less of an entrepreneurial spirit, less and less of investment and ingenuity in this country. what we have to do is completely scrap our education system and get it in line with the technologies and types of things our kids need to learn and be able to contend with in this world today. so we are producing the next generation that can go on and be productive citizens. and not every kid is going to go on to college. and it's not a right to good college. but if every kid in high-school with a defined talent, there is a trade, something they can say i can do this. there's nothing wrong with having summer apprentice chips for these kids that can go out, because they have studied and then well, they can go and take that thing they're focused on, that trade, and start to put it to practical applications

because you are creating a future employee. there's nothing wrong with automobile mechanics. plumber's need to learn the metric system. that's nothing easy. we should be training our kids on all these different things so they can apply their talents and be productive members in their local society. we have to reform education. [applause] >> the second part to that question is at -- is that a 2005 federal mandate was passed that september 17th be observed as constitution day, providing educational programs. how will you be observing constitution day 2011? >> i need to ask my staff of fun and washington d.c.. if i'm there, i will be supporting in defending the constitution. if not, maybe i will be able to speak at one of the local schools. but this is what we have got to do.

to many of our kids do not understand civics. it's not just on constitution day, it's every day, we need to start teaching our kids about civics. [applause] >> speaking of the constitution, johnny is asking about the repeal of the 17th amendment and restore accountability to senators and the will of the people. many are calling for term limits and this would a restore that accountability from this establishment. would you support the repeal of the 17th amendment? >> i am not a senator, and i believe we can do better as far as the accountability of our senators. i think we do need to have term limits in washington d.c.. [applause] as a matter of fact, one of our constituents down here who lives in atlantis, fla., is pushing a plan that got to the house of representatives.

it maxes' you out 12 years of legislative service. two terms as a senator. in the house, it maxes' you out at three or four terms of two years. if you are in the house of representatives, you want to run for senate, you can do that but you are capped off at 12 years. the longer people are in washington d.c., the less connection have to the people here. [applause] that is not what the founding fathers intended. they never intended to have a political elite cat -- political elite class or lifelong politicians. the intended citizens service for people to go to washington d.c. to serve and make legislation and came back and had to live under them. that's what we have to do. [applause] >> i want to talk about some aspects of the budget, particularly with the social service programs. stanley wants to know more about

the growth of the welfare population and your position on the institutions that serve them. >> when i went back to my neighborhood in march of this year, i did not recognize. we had a 41% increase in food stamp recipients and the united states. we're going in the wrong direction. people came to america because they believe it's the land of opportunity. but if we start to get to being a land of handouts and suppressing the opportunity, we start to become a land of equal achievement and not equal opportunity, where the government can decide how far you can go in your life. then we will lose the essence of the united states of america. you are looking at a kit in the inner city of atlanta, georgia, i guarantee you my parents would never thought i would rise up and be lieutenant-colonel, command a battalion in combat, and the united states congressman. but the fact that we live in a

country where it is possible and the only thing that can hold you back is what is between your ears, it enables me to be where i am today and that is what my parents stressed me. if we continue to have the breakdown of the family structure, if we continue to make kids believe there's only a certain thing they can do, then we're going to see those failings in the social side of the united states of america. look at what's happening in philadelphia. there is a reason why something like that is happening in philadelphia. when we were growing up, when we went too fast food restaurants, especially during the summer, you saw one adult at a fast-food restaurant. that was the manager. all of the others were kids. high-school kids. you go in these fast food restaurants now, what do you see? they are all adults. what we're doing is we are now

affecting those young people and their hope and their opportunities even at that early age of 13, 14, 15. we have got to turn this thing around. we absolutely have to. >> this is more of a broad question regarding the budget about the reconciliation of the budget passed by the house and the need for a continuing resolution as of october 1st and what you are going to to work with the congressional gang of 12 to make sure it budget is in place by november 23rd. workcan't do too much to with that gang. i'm not head of real about that happening. i was somewhat upset we did not have any freshmen members from the house side to be represented there because a lot of those folks of been there for quite some time with some of these policies that were enacted that got us on the wrong track. but it comes back to what i said. we have only past six of 12 appropriations bills.

unless we do some type of herculean effort between september 7th when we go back in session and the 30th of september, i don't see any way we're going to get the remaining six bills voted on in the house and the other 11 bills voted on in the senate so we can have a budget as we go forth and get the president to sign it for fiscal year 2012. that's why we have a 13% approval rating. it's because we're not staying there until the mission is accomplished. all i can do is be the squeaky wheel, even if i don't get oil, i continue to be the squeaky wheel. but this is something where you will have to stand up and say we want something different. we need to have the right type of structural reform and how washington d.c. has been operating because it does affect your each and everyday life down here. >> congressman, i want to ask a couple of questions about the environment. some other ones came up.

one of them dealt with -- and not familiar with agenda 21 being implemented. it deals with losing particular land rights. what kinds of things redoing to make sure individuals land rights are protected question are >> nothing has come up about losing property rights. i do understand this concern about agenda 21 and losing american sovereignty to the united nations. the loss of c treaty where we could lose our waterways to the united nations. that's one of the things i will make sure i stay on top of. this trial rights thing that they're trying to push through the united states. we have to make sure we retain our sovereignty. part of that is maintaining our borders. we have a huge problem. [applause] >> there was one question on a

light bulbs. the kind of label with people use has become a big issue. is that something you are looking at? even repeal that in congress. the fact the government is telling you what kind of light bulbs you can have in your home and we could not even repeal that the mercury light bulb, which of course, if you drop it and break it in your house, you have hazardous-waste in your home. i don't know. we will keep trying to fight for the light bulb. [laughter] >> a question regarding our involvement around the world. what is your position as far as u.s. involvement and how closely do we need to work with the un to ensure we are involved in. >> i see the united nations as a

failed organization right now. [applause] i do not want to see american soldiers having to wear that light blue beret because there's a difference in the standards, there's a difference in the style of leadership. the united nations intervention for some web and on right now, spanish soldiers are being picked off and killed and nothing is going on about that. they refuse to go out and do the missions. i want to see us have strategic global leadership that understands when you commit our forces in the united states of are, that you give them the right guy in san borders and allow them to do the mission they're supposed to do, expedite the situation and yes, you redeploy them once you complete the mission. but they have to understand clearly what the mission is and

when you look to the rules of an agent and how we are tying our soldiers' hands behind their backs, that is not enabling them to be successful and have victory on the battlefield. it comes back to having people that have been on the receiving end of an ak-47 or rpg because we know what it's like and be will think about that before we send a soldier out there. [applause] >> there were a couple of questions about tea party politics. somebody is asking about the racial tension that has been involved in some of the tea party attacks. would like to comment on that? >> i think it was the week before went to israel, i spoke in front of the palm beach the party group. they're close to 400 people there. last time i looked, i was african-american. [laughter] out ordn't try to run me

attack me or anything like that. but one of the things people have to understand, what is this thing called the two-party? there's a lot -- what is this thing called the tea party? washington d.c. does not understand, they attack. [applause] that is a shock. all you are talking about is a constitutional, conservative, grass-roots movement that believes in four basic things -- they believe in an effective and efficient federal government. they believe and fiscal responsibility, they believe a national security and free market and free enterprise systems. anyone that doesn't believe in that -- i don't know you believe in in the united states of america. so that is it. are there going to be some folks that get off on the french that cyprus -- off on the fringe,

who doesn't want to embrace that? that is what america is about. >> we have a few more questions. barry is asking about obama's executive many dream that. why have we not heard republicans screaming from the rooftops? >> what he is talking about is when the secretary of homeland's security came out and said we're only going to enforce certain types of illegal immigration deportation, you don't pick and choose what you want to do when you are the executive branch. our laws are our laws and you have to abide by them. that's one of the top rung things will be contending with one get back to washington dc next week. [applause]

the most preeminent thing about being a republican as the respect of the rule of law. if we do not have that come out of washington d.c., we lose our country. [applause] >> this is a question up from austin from jupiter. you want to know of your opinion about the increase and lobbyists and is there any plan to eliminate the substantial increase? >> i can make them go away, all i can do is make them not come near me. yeah 535 legislators. 435 and a house, 100 in the senate. at last count, the 35 to 40 lobbyists for each legislator in washington d.c.. there is a street called k street, which is the lobbyist street. he just have to close the door to them. there was a contentious thing about this second engine for the s-35 fighter aircraft and ge

wanted to be able to come in and have that second engine. -- the f-35 engine. people heard there was a freshman congressman from florida who said that would not happen on his watch and one of the ge executives decided to visit that congressman in his office. it didn't make a dent. but that is we have to be able to do. [applause] people will promise you a whole lot of things up in washington d.c.. but you have to stand on your principles and understand i don't work for lobbyists. i work for you. [applause] >> there was some question about some of the uncivil discourse with some of the dialogue that occurred after the tragic shooting of congresswoman

giffords. i know there have been calls by individuals in congress about disrupting town hall meetings like this and i want to thank all of the today. this has been a very civil and productive meeting. but what are your thoughts on some of that discussion between your colleagues in washington d.c.? >> since i have been up there, have been told want to kill women, i want to kill babies, i hate just about everybody, i think maybe even i hate myself. name-calling is what happens when people don't want to stick to the issues and talk about things that want to make this country great. we have to get away from that. wheat -- whatever your ideology is, whenever your belief is, let's talk about it in the arena of ideals, not the cheap shots. but i will tell you this -- if you poke me in the chest, i'm going to fight back. [applause]

>> one of your friends from san diego, calif., is here today. she says please come to california to visit us. after everything you've heard today, you're going to spend a lot of time in washington d.c. working in these issues. >> san diego is a beautiful place. i flew in on my way to head up there and play with the marines at camp pendleton. maybe one day i will get to go to san diego or at least go visit this field training at coronado. but right now, we've got a lot of stuff we have to do it washington d.c. and then being done here with the folks in south florida. god bless you for coming over from san diego. >> believe it or not, we've gone through just about everybody's questions. some of them were similar in nature, so if i didn't call your

name out specifically, i apologize for that. but this has been a great town hall meeting. we appreciate you being up here and answering questions. >> hi want to thank all of you for coming out. there were better places you could have been. i know the weather is pretty nasty, but thank you for participating in this process and allow me to share my thoughts and ideas. god bless you all, god bless the united states of america. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> congressman west is the only republican member of the congressional black caucus. he said this morning that he is considering leaving the group after reports of inflammatory remarks made by another member from indiana about the tea party movement. coming up in a few moments, we

will show you another town hall, this one with maryland senator ben cardin from yesterday. we have covered similar events a utah senator and a california congressman nominated to serve on the deficit reduction committee. in washington today, the white house said president obama will lay out his jobs plan in prime time address to a joint session of congress next week. he has requested of speaker john boehner and harry reid to speak before both chambers odds of timber seventh at 8:00 eastern. the letter is now posted at c- span.org. it says i respectfully request to address a joint session of congress. my intention to lay out a series of bipartisan proposals that congress can take immediately to continue to rebuild the american economy by strengthening small business, helping americans get back to work, and putting more money in

the paychecks of the middle class and working americans. that's part of the letter president obama wrote to speaker baker and harry reid -- speaker john boehner, and harry reid. the justice the part has filed suit to it -- filed suit today to block the proposed merger of at&t and t-mobile on a basis it would raise prices for consumers. at a news crisis -- at a news conference this morning. we will show you that later in our schedule and you can see recent hearings of the go to our video library and search at&t. also on line, we posted a poll from our "washington journal" program this morning asking viewers that they plan to spend more or less in the coming six months. the numbers so far, the percentages don't change much during the day. most folks say they plan to spend less. 243 at the current time. 46 say they will spend more.

88 say they will spend about the same. go to facebook to register your vote. >> machiavelli has become an adjective. i doubt many people in this town would like to have themselves described that way. but i have a feeling many of them a lead -- have that next to their bedside. but not many people would call themselves that. >> his name is synonymous with a cynical scheming in the selfish pursuit of power. on sunday night, a discussion about how his theories may have been a reaction to the corruption around him. >> maryland senator ben cardin at a town hall meetings yesterday, just outside of baltimore. the first term democratic senator, a member of the budget

and finance committee explains the budget debate in washington and its impact on medicare, social security and senior citizens. the town hall is one hour and 10 minutes. >> you all have electricity here all the time, don't you? [inaudible] >> he has helped me all-out -- he has helped me out a lot over the years. he's a good person. how are you?

good to see you. how are you? good to see you. >> i don't know you. i've only been living here a year-and-a-half. >> where did you lived before? >> houston. >> i am going to be in houston next month. they said it's a pretty hot there. they have had a really hot spell. about 110 degrees. maybe it was dallas. it is hot. nice to have you here. >> thank you. >> [inaudible]

>> [in distinct conversation]

>> how are you? good to see you. >> [inaudible] >> you should be able to do better. the problem is -- [inaudible]

>> is a very special day and we have a nice crowd here. we are glad to have our friends from c-span here recording this event so others can share in this wonderful maze the senator is going to tell us about. let me introduce a couple of guests. patrick much, dr. adrian long, and surely sutton. thank you for attending. there they are, over there. jimmy malone, you may know him. thank you. [applause] the chairman of our legislator -- legislative political committee, charles tucker. [applause] from charlestown board of

directors, and naomi mcafee. the president of the resident counsel, check is here. and the vice-president of government affairs, adam cane. [applause] let me tell you at a bit about some entercardin. he has been called the bill legislator's legislator by the "washington post." in more than 20 years in congress, he's been a national leader on the economy, homeland security, health care and retirement security. throughout his career, he championed the need for resources and services so that seniors can live independently in their communities for as long as possible. first elected to the senate in 2006, he served on the environment and public works, finance, and foreign relations, budget, small business and

entrepreneurship committees. he's a busy gentleman. he believes medicare and social security are two of the most successful programs we have in our nation. he brings with him the expertise developed in dealing with the same issues while serving 17 years on the ways and means committee in the u.s. house. during that time, his proposals to increase the amount americans can save for retirement and expand medicare to include benefits were enacted into law. during the 111th congress, he supported the affordable care act and successfully fought to include provisions eliminating all co-payments for medicare. and providing seniors with a free annual wellness check up with no copays. i could go on and on, but i know you are excited to see him. please give a warm welcome to senator then the cardin. [applause]

>> thank you. it's a pleasure to be back at charlestown. you did not experience what i experienced this week. no electrical power. you have plenty of power. we are still without power, as are many people in our region, but it's good to be back here. this is a great community. i was talking to some people as i was walking around to our recent residents. i've been here many, many times and had a wonderful discussions over the years. these town hall meetings, which like to do in august when congress is in recess, to get your views of what is happening in our community and for me to give you an idea of what is happening in washington. i hope we will have a pretty free-wheeling discussion that is -- you guys are normally not shy in the questions you have, so be prepared.

i want to talk a few minutes first. delegate malone has been introduced, but jimmy malone does a fantastic job representing you. i've known their family for a long time. thank you for what you're doing to help us in annapolis during these tough times. the federal government pushes more and more off on the state's and the state has exercised great leadership and jimmy malone is one of those leaders. thank you for being here. i appreciated very much. [applause] i want to talk a little bit about medicare and social security, about the budget in washington, the impact it could have on medicare and social security and programs that affect our seniors. and we will open up for your comments and questions. social security and medicare have been to of the most successful programs in the history of america. when social security was

enacted in 1930 -- in the 1930's, seniors were very likely to live in poverty. social security was the way in which we were able to allow seniors to live in dignity in america, consistent with the values of our nation. that is what social security has met over the year. is the only lifetime, guaranteed, inflation-proof annuity. you knew that you could not outlive social security. you know that it will be adjusted. you don't have to look at the stock market to sue your social security benefits will be. it is guaranteed. it is there for you. we want to make sure it is there for future generations. medicare, which was enacted in the 1960's was a direct result from the seniors not being able to get private insurance to provide health care for them. private insurance companies were not interested in ensuring older people. there's a reason for this.

insurance companies make money by ensuring people who do not make claims. as you get older, you make more health-care claims. so you are not the market they are most interested in. we found out in the 1960's that seniors have a very difficult time with private insurance companies. so congress enacted medicare. it was controversial at the time. there were those in washington who felt we should not do it. it was the right decision. so that our seniors were guaranteed access to quality health care. that is what medicare was about in 1965 when it was enacted. since that time, we have improved medicare by expanding benefits, particularly the role i played in the military to get lead 1990's, when we expanded medicare to include preventive health care service with legislation i authored,

including mammography screenings and colorectal exams and pap smears and diabetes self management. the preventive services were added in the late 90's and we are continuing to improve medicare today. i come here today to tell you that these programs are under attack in washington. we need to understand what this debate is about. let me try to lay out some of the politics of what is happening in washington and the impact it could have on programs that affect your life. this is not theoretical. we know legislation passed the house of rent -- the house of representatives. it did not pay it -- it did not pass the senate and the president is not going to sign it, but it indicates there is support in washington to dramatically change medicare. the budget that passed the house of representatives would have

change medicare from a guaranteed program to a program that gives our seniors a voucher, where they buy private insurance companies, no longer a government insurance. when it was -- when it is fully implemented, it was estimated to cost seniors about an extra $6,000 a year. seniors cannot afford another $6,000 a year for health care costs. more and more seniors will be denied access to care. it would have required you to go out and buy private insurance. it would make seniors beholden once again to the private insurance marketplace. it did not work in the 1960's. some of the remember when we had medicare plus choice. we had private insurance companies that came into maryland and they left overnight. there is no guarantee private insurance company will remain in our market and they have left

before and they could leave again. i oppose what the house was doing. your local congressman opposed it. we thought it is the wrong thing. we do not want to see a fundamental change in the medicare system where the guaranteed programs medicare, traditional medicare would no longer be available for seniors. we thought it was the wrong thing to do. but it went beyond that. the house passed budget also block-granted the medicaid program to the states. medicaid provides the primary funding source for seniors for long-term nursing care. by block granting the program to the state, it is unlikely to be able to predict the future of medicaid. medicaid right now is a

partnership between the federal government and the states. we know there will be guaranteed eligibility to participate at the national level. if the federal government block grants it, it will be totally up to the states. we know the states don't have the same budget flexibility the federal government has. during tough times, we could to the budget cut and the future of medicaid is certainly very uncertain. not only impacting seniors, but affecting american families, more and more children are covered under medicaid and day would be in danger of losing their access to health care. these bills passed the house of representative and or not part of the compromise reached in congress recently. one other thing that happened in the house of representatives that you need to about is they have recommended the repeal of the affordable care act.

the affordable care act was somewhat controversial. i'm not sure all of the reasons for that were well understood. but let me go over what a repeal of the affordable care act -- that is the bill president obama signed into law in the last congress that provided at long last that every american was guaranteed to have coverage under our health insurance system. it said at long last america joined every other industrial nation in the world to say that health care is a right and not a privilege. it took millions of americans who currently have no health insurance and gave them the opportunity to have health insurance. it told our small businesses that they would no longer be discriminated against as small companies in the insurance marketplace. they would be able to buy a health insurance plan for their

employees that was competitive to the largest companies. it told individuals who could perhaps not afford health insurance that health insurance would be affordable for all americans. we subsidized health insurance for low-wage workers. that was part of the plan. we told private insurance companies they could no longer discriminate against american families because of pre-existing conditions. the affordable care act went beyond that. it also brought out the framework to bring down health- care costs. in the united states, we have the best health care in the world, quality-wise. later today, i will be speaking at johns hopkins hospital in baltimore. i will be talking about excellence in surgery, or surgical residency is were first initiated. we are proud of the quality of care when king gets at hopkins. -- one can get it at hopkins.

we have the best technology in the world, the problem is is out of reach for more and more americans. they cannot afford it and don't have access to that care. the affordable care act is an effort to say let's bring this system available to all and bring down the cost of health care. how do we bring down the cost? we bring down the cost by having everyone in the system. we say that everyone will be covered by the system so we no longer have people visiting the emergency rooms to get health care needs because they have no insurance. we no longer have people not paying their bills in emergency rooms and we have to pay for that. by bringing down costs by bringing everyone into the system. we'll also bring down costs by better use of health information technology. you might be surprised to learn that if you visit an emergency room in maryland, there is very

little chance they would have your complete medical records. we want to change that. if they are at your medical records, they have to put you through tests that they would otherwise not need to do, adding to your inconvenience and a delay in getting health care and also adding to costs. we can improve quality, reduce costs by improving the use of health information technology. the bill also provides for managing serious diseases. by keeping people healthier and have more serious problems, investing in well as programs. i can tell you about the program safely supermarket tab for their employees which is a few believe -- if you take responsibility for your health care from the point of exercise and dealing with high blood pressure and cholesterol and managing your diabetes and if he spoke, stop smoking, they reward you by

lower premiums for your health care and more benefits, and it works. they have kept health-care costs down. we use that model in the affordable health care act, to use well as programs and preventative care to bring down the cost of health care. in the affordable care act, we deal with the cost to government. this is not what i say, this is what the congressional budget office has said. we will reduce health care -- government's cost to health care by hundreds of billions of dollars in the first 10 years and by over one trillion dollars in the second 10 years. reducing the cost to taxpayers, making the system more cost- effective. for seniors, it was particularly important, the affordable care act. for seniors, it meant that benefits were expanded. more benefits covered for our seniors. the one you probably heard the most about was the coverage gap

we have in prescription drugs, falling into the so-called donut hole, our seniors have to spend a couple thousand dollars fall into the gap where they have to pick up the entire cost of their prescription drugs. starting last year, we started to fill in that coverage gap by sending checks to 55,000 marylanders who fell into that gap and by 2020, a gap will be completely closed under the affordable care act. the affordable care act invested well as where your annual wellness' example used to call your annual physical, would now be covered under medicare reimbursements. 9000 people in maryland have taken advantage of this well this exam. the most important part of it affordable care act as it relates to seniors is that it extends the solvency of the medicare trust fund by a dozen years. making sure medicare is not only

here today, but here tomorrow. that is here for future generations. i went through explaining all that because the bill that passed the house of representatives would have repealed all of that. it would have repealed the ending of the coverage gap for prescription drugs, it would have affected the solvency of medicare by reducing it by one dozen years, would have eliminated the annual wellness' exam and other things i have talked about. passed the house of representatives, did not pass the united states senate, will not pass the united states senate. but it is an issue we need to be aware of because, as i said, medicare and social security is under attack in washington. it is under attack. this recent budget debate underscored the fact that medicare and social security are very much under attack in

washington. i want to talk a little bit about this budget agreement and what happened and how it affects our seniors. but first we need to understand how we got here. i was part of the congress just 10 years ago the balance -- eleven years ago -- a balanced federal budget. we did it when bill clinton was president of the united states and we brought the budget into balance. we had a surplus. that was 2000. we had a surplus. 11 years ago. we were concerned we might have paid off all their debt. all of our publicly held debt and had no debt in our nation. george w. bush enacted certain economic policies that i disagreed with. i voted against it. i say that because i know we have to deal with this deficit, but it's important to know how we got here. george w. bush cut taxes not

once, but twice. the second time he cut taxes, we were at war. with two countries. afghanistan and iraq. the first time i know of we went to war and cut taxes rather than paying our bills. so we use their credit card to get a tax cut and use their credit card to pay for two wars. we use our credit card to expand government spending and it was wrong. then we hit a recession and when barack obama took the oath of office, this nation was losing over 700,000 jobs a month and we had huge, huge deficits. what barack obama then did was suggest government spending, and order to get us out of this recession, which is what most economists would tell you is the right thing to do. further adding to the deficits of this country. it is important to understand how we got to where we were and what happened in washington this past few months.

we have a debt ceiling. a debt ceiling is an arbitrary limit as to how much the government can borrow. raising the debt ceiling does not increase one dime of federal spending. not one dime. the spending had already been incurred. the question is whether we were going to pay our bills or not. what the house leadership decided to do was use the debt ceiling debate as an ever to try to bring down federal spending, using that leverage. we can argue whether that was the right thing to do or not. i don't think we should have jeopardized the federal credit, and i felt we should have talked about the budget in a more bipartisan manner rather than using the threat of the credit of america. i tell you as your senator that our current deficits are not sustainable we have to deal with

our current deficits. i'm not going to try to sell you on whether the budget agreement was a great thing or not. but the way we did it was certainly wrong, no question about it. congress should not acted in a bipartisan matter for the interests of our nation, and i hope that is what we do moving forward. we've got to work together for the best interests of the nation. the options we had available was either to pass the budget agreement, which extended the debt ceiling until 2013, versus a defaulting on our credit. some would say that is not a bad idea. i could not disagree more. if we did not raise the debt

ceiling, something would have had to give. we cannot borrow money to pay for social security checks, the government work force, contractors who sell things to the federal government and expect to get paid, defense, our soldiers, or bondholders. something had to give. to me, that option was not an option. we cannot default on our debt. i supported the budget agreement because it extended its ceiling and, quite frankly, i believe eight give us a framework to manage our deficit in a way that is balanced. let me go through that quickly. i tell you, i was disappointed that the budget agreement did not include a more comprehensive approach, had to be more comprehensive approach would have included revenues, because i do think we have to pay our bills. we have a moral, legal and

economic responsibility to have enough revenue to pay for what we spend. yes, we have to reduce spending, but then we have to pay for what we have incurred. there are a lot of tax breaks out there, loopholes, that we should close, and i will get to that. i was disappointed that the agreement did not deal with the number one issue about bringing our budget into balance, and that is to get our economy back on track and create jobs. create jobs. we don't have enough jobs out there. we need to invest in innovation and education and infrastructure in order to create jobs. that needs to be part of this equation. it was not. i was disappointed with the budget agreement, but i thought it was the best option available. the budget agreement does provide for an immediate reduction in $1 trillion over the next 10 years of deficit. that, to me, was the right thing to do perrier's manageable. $1 trillion is divided between

security and non-security for the next 10 years. you cannot say gee, let's cut programs for seniors to fund national defense. you cannot do that. you cannot cut student aid to on the military. we have a firewall between security and non-security for the next two years is. the budget amounts are manageable. the budget amounts are manageable. we reduce federal spending next year by about $3 billion on the domestic side and $7 billion on the security side. what does that mean? let me give you a comparison. the house had already passed a budget for next year. the house-passed budget would have reduced domestic spending by about $40 billion, 12-13% below current spending, frozen over the previous year's spending. we have gone from a budget this

year, frozen from last year, to a 12-13% cut in next year's budget on programs that affect you, and the older americans act would have been impacted by that. it also affects our students and grants,s -- and pell the youngest on headstart program, nih, which gives us resources we need to create jobs of the future, would have been affected by that. instead, the budget agreement agreed to by democrats and republicans, signed into law by the president, is basically another freeze, which allows us to invest in infrastructure and innovation and education. allows us to do that so that we can create jobs for the future. it is a manageable amount, much

better than the the way that the house was looking at for fy12, next year's budget. there is no cuts in this for medicare, zero cuts. there was no cuts for medicaid. no cuts in this first trillion dollars for social security, no cuts, not at all. we have succeeded. no cuts in spending programs, none whatsoever in this first round of cuts. then there is going to be a second round. we need to do at least $1.20 trillion in deficit reduction over the next 10 years. we have this super committee made up of members of the house and senate that will have the ability to make a certain recommendations voted up and out congress -- up and down by

congress. this committee must make recommendations by the thanksgiving and congress must act on it by christmas. it is a short time frame. i am not sure what they will do as far as recommendations for another $1.20 trillion in budget cuts. i will tell you what i will like to see them do. i would like to see them bring in more than $1.20 trillion in budget savings. i would like to see it be around two. dollars billion in budget savings, which would give us what is needed to manage our deficit so that we maintain our strength moving forward on a manageable debt. i want to see them bring in what president obama once called the grand bargain, in which we can really manage our to visit and do it in a way that is fair. now, you can do that if you bring all elements of the budget to the table. we have what is now a as the

overseas -- what is known as overseas defense spending, not part of the first trillion dollars. we will be reducing our troops in afghanistan and iraq. they will be coming home. there is less spending on our military. using the current base line, the current out we are spending, as a future barometer for our overseas operations is not realistic. we need to bring our troops home. that will save us, we believe, over $1 trillion over the next decade. we can get those savings. i mentioned revenue, i spoke on the floor of the senate about the gas and oil industry. we created a tax break for u.s. manufacturers so they could better sell products overseas. well, because of certain international trade rules, that tax credit has been extended to the gas and oil industry. they don't deserve it. they don't provide a product for manufacturing overseas.

we had a hearing on the senate finance committee i serve on, and asked that question to the ceo's of the large gas and oil companies. they could not justify these large tax breaks. they made it $34 billion in the first three months of 2011. $34 billion, in three months. while we all were suffering higher gasoline prices at the pump, they were making record profits. they can certainly give up these few billion dollars of tax subsidies, which would help us balance the federal budget. and there is lots of examples of loopholes. we spend more money in the tax code and we raise. we give back more in what is known as tax expenditures -- deductions, expenditures, credits. the wealthiest are the ones who benefit most from it. we can certainly do a better job. no one is talking about increasing tax rates. we're talking about everyone in paying their fair share of

current taxes. doing that, we can bring this budget into better balance. that is what i hope the joint committee will look at. now, if they and fail, we have sequestration. what does that mean? across-the-board cuts. $1.20 trillion over the next 10 years. here is the interesting point -- it will be an equal amount of cuts from the department of defense and non-defense. equal amount. i don't want to see this happen. to me, this is a failing. i don't believe in across-the- board cuts. congress needs to be selective in how they do deficit reduction i don't want to see that happen, but if it were to happen, it has to be equal pressure on all members of congress. it does not divide us by party, which i think it gives us the ability to work together as members of congress, not as democrats or republicans, to

come to an agreement. let me assure you that if that happens, we have sequestration, there are exempt programs. no cuts whatsoever to social security. no cuts whatsoever to medicare beneficiaries. there will be cuts, ltd., to providers and insurance companies, but not to beneficiaries. no cuts to medicate. no cuts to the low-income programs. i think the budget compromise has provided the protections we need. lastly, let me just mention social security. it should not be part of the budget agreement, because social security, again, did not contribute one penny to the deficit problems we have today. not one penny. if anything, it made us look better because we used tax surpluses from social security to mask the size of our troop deficits. social security should not be included in any of the numbers i just mentioned. i am going to fight for that. i know a lot of my colleagues to

fight -- will fight to make sure that social security is not part of the budget numbers we need to manage the deficit. there are ways to strengthen social security. we should look at. social security -- would like to have what is called a 75-year solvency for social security. we have plenty of money in social security, there is no danger for social security, but we would like to put it on stronger footing going forward. minor adjustments for those issues. it is not taking a lot of changes. for example, we look at the wage cap. if you earn a salary, income, have an income, you pay on every dime of income you earned into the medicare trust fund. it is capped at a little over $100,000 into the social security trust fund. those who make over $100,000 in salary fine that their social security contributions are capped. we could adjust that.

there are things we could do that would fix the social security system, but it should be considered totally outside of the budget discussions dealing with managing the federal deficit, because this is not part of the problem. i want to come back to the main point here. congress needs to work together. it is not what one party wants or another. you have got to work together. we cannot lose focus of the single most important ingredient here, job creation. if we balance that budget in the way that is in the best interest of americans, we need more jobs, pure and simple. we need a level playing field. right now we have currency manipulation of other countries that affects u.s. manufacturers and producers. we have got to deal with that. we need to fund our trained work force, we need to have better roads. after looking at this storm, we need better energy

infrastructure in this country. all that will help create more jobs for the future. as we go through this exercise of bringing our nation together with a responsible budget, yes, i am going to fight to protect the dignity of our seniors, i will do that to me, social security and medicare are the two principal programs that protected the dignity of our seniors, and i will do everything in my power, working with senator mikulski and our colleagues in congress, to make sure that we protect those basic programs. but also, i am going to fight for responsible, comprehensive budget plan that allows job growth in america so that we can have the jobs we need for our economy to grow. so with that, let me throw it open to your friendly questions. [laughter] from ever, i into charlestown, so i think i have -- remember, i have been to charlestown so i think i have on every membership

in the community. we welcome your candid divas. -- candid views. [applause] >> just a couple briefer rules so that many of you who have questions can get it answered by the senator. remember, we're not real reporters, so do not give a three-minute, and then ask your question. just brief questions so that we can get to as many as we can brin -- so we can get to as many as we can. >> how can we as citizens tell the select committee that we needed them to work together in a way that will produce a balanced approach to our deficit problem, or the budget problem, and then how can we tell the congress that we need for them to work in the same cooperative balanced way? >> we have just taken a giant leap forward in what you have just said here. i know my colleagues are around

the nation and i hope they are telling this and it the committee, that people are tired of just the partisan division. they what is to deal with the issues in the best interests of our country. i think most people understand it is not going to be one way or the highway. we are going to have to figure out a way to deal with a divided government. republicans won control of the house of representatives in the midterm elections. they have control of it. the democrats have maintained a very small margin in the senate, not enough to overcome a filibuster, but they do have control of the agenda in the senate. of course, the president of the united states is clearly the dominant player in this discussion. you put that all together, let's figure out a way to work together. i have listened very carefully to the comments from my 12 colleagues that are serving on the commission. they had seemed to be very

conciliatory in their opening comments, i hope that carries forward. the important thing is to be open-minded, to look for a comprehensive way. but i must tell you, there are certain principles i would hope all americans would agree with, and that is there are ways of bringing down costs, we have got to create jobs, and we have to deal with the most vulnerable, and 3, the dignity of our seniors depends very much on a social security and medicare system. >> right here, sir. >> we have heard so much about the costs of medicare and social security and one thing or another. it appears to me that one of the basic things we ought to do is stop these people from coming to the united states illegally, sopping up every damn dime we have to take care of them that should not be taken care of,

send them back to where they came from. and why don't they in peach -- impeach obama? thehas violated constitution so many times that it is that that he is where he is. >> on immigration reform, i really do believe we need a comprehensive immigration reform. we need comprehensive immigration reform brought by the understand that america was built in large -- measure we need copperhead -- the immigration reform. -- we need comprehensive immigration reform but we need to understand that america was built by immigrants coming from all round the world. we need an immigration system that makes sense for america. it starts with controlling our borders. we need to know who is coming into america and people need to come here in a lawful way. but we also have toured knowledge that there are people here, many of whom are innocent

-- they came here as young children and was not their decision to come to america and they have been law-abiding and adding to the economy of this nation. we need to have a fair way to deal with people who otherwise have been illegal, productive, taxpaying and willing -- habve been legal, productive, taxpaying and willing to acknowledge their status and pay the cost to remedy the situation and go to the back of the line, not the front of the line. there is a way to unwind where we are today in a comprehensive way on immigration reform. i will take issue with you on your second point. president obama has presided as president of the united states during extremely difficult times. in the first two years of office, he had a pretty productive time getting legislation enacted into law. he dealt with the deficit, as far as the economy was

concerned, with an economic plan, he was able to pass the affordable care act, he took wall street on, put the cops back on the be on wall street, a major environmental land bill that has been hung up for many years, got the lilly ledbetter bill passed to protect women in the workplace, and the list goes on and on and on. in the last year, it has been much more challenging because of divided government. quite frankly, i think we have to be very careful when how we express our disagreements -- with how we geexpress our disagreements. this is a political system where you can express its views and you don't have to be worried about being arrested or tortured. i think we have to be careful in the language we use. the president is entitled to exercise the power of his office. and he is doing what he believes is right. you can disagree with him, but the challenge is -- but to challenge his legitimacy to maintain that office to me goes over the edge and is not

appropriate. i would just hope -- [applause] that we are careful in the we are careful in the manner we talked. >> "bloomberg businessweek's " first issue in august noted that what brought the deficit is not the issue that ought to be addressed is the unfunded liability, the trillions of dollars that is really the killer. it is going to kill the economy downstream, it'll be a vote on the economy for the next -- a load on the economy for the next -- it will come to a head six port eight or nine years from now. if you double the income taxes, it will not make up that deficit. is there any chance that there

is political responsibility to take on this issue in the next year -- few years? >> well, let me broaden that question, because we had a huge problem in our budget system in washington. our budget system does not work well. don't let that distract us from trying to get the grand bargain or it the $1.20 trillion in deficit reduction. we've got to get that done. it is important, important to manage our debts that it does not exceed a certain amount of our economy. that we need to do. but we also need to correct our budget system in washington. our budget system is badly broken. i think you put your finger on the number one problem. that is the united states of america uses a cash-basis accounting system for its

budget. for those of you who have some business background, you know that really small mom-and-pop businesses sometimes use cash accounting. once you get into any size business, get accrual accounting to the government, the largest economic entity in the world, is that basically on a cash- basis accounting system. it makes no sense at all. we need to get to more accrual accounting. that is the issue you raised. we have a lot of occurred responsibilities, in our pension system, health care system. we have a lot of accrued responsibilities. on the other side of the ledger, we don't get the credit for capital expenditures that were to even out some of the cruel responsibilities that we have -- the accrual responsibilities that we have. we need to balance it out better

and use or what is known as general accounting principles in the way we present our budget. the other side of the argument is government-to-government, we have such a large impact on the economy that every dollar is the same whether a distrust money or non-trust it -- money. -- whether a is trust money on non-trust money. i disagree. when i was in the house, i worked with a republican from iowa who was the budget director under george w. bush. we worked in a very non-partisan way and brought out budget recommendations that move us towards a kroll accounting -- accrual accounting. i think that is what we need to get back to. >> senator cardin, thanks for coming. everything you have said today seems reasonable to me. i have one area of concern, and that is without medicare advantage -- with medicare advantage. i'm concerned that congress has departed from the simple concept

of justice, fairness, having reimbursement rates for all seniors that are fair. is there anything in the current law, the law that senator obama signed into law, a double address that problem -- that will address that problem? how many years will it take to get back to a fair system? >> let me try to answer it, because it is complicated. medicare advantages the private option under medicare. most seniors are in traditional medicare, and you are subject to a fee-for-service system where you get reimbursed for the hospital visits that you have. your other option is to go -- you have the choice to go into medicare part b, pay a separate premium for that, and you can go into d, prescription drugs.

the medicare advantage plan is the opposite. you go into private insurance. the private insurance company must provide all the benefits in medicare, but they usually provide additional benefits -- they always provide additional benefits. you give up some of your freedom of choice. it is a managed-care program. you get additional benefits and you may pay additional costs, depending on the plant you are in. it may cover prescription drugs, it may be part d also. if you go into that plan, you generally pay part d premium plus or more. the government subsidizes the medicare advantage plan. here is the rub -- the government subsidizes the medicare and manage plan by more than it subsidizes those in traditional medicare. we are paying more money to the private insurance companies and that we do subsidizing of the

majority of the people that are in medicare to additional plan. there is a second problem. for those who are in part b, 99% of the seniors, you are paying a higher part b premium because you are also subsidizing those that are in medicare advantage. that is just not fair, just not fair. in the affordable care act, we started to equalize it. we start to reduce the disparity. that is a large part of the savings in medicare. you may have heard during the affordable care act that there were political ads put in come up particularly during the election, that accused president obama of cutting medicare. the largest part of that was in the reductions of subsidies to private insurance companies. the second part of the

criticisms were that he reduced rates, for example hospitals, because medicare is paying for uncompensated care. as we go to affordable care, less uncompensated corporate i appreciate the question. we are trying to equalize it over time, but we moved in the direction of the affordable care act -- in that direction under the affordable care act. >> i am a registered democrat. welcome to charlestown. >> thank you. >> my question is, what is your interpretation of the tea party? [laughter] >> i thought we would have a friendly questions here. well, the tea party -- i think it is hard to generalize on the tea party.

i first want to make that point. it is hard to generalize. but it is clearly a reaction in the midterm elections of people who were upset by what was happening in government. too many people have lost their jobs, too many people have lost their palms, too many people felt that things should of been better -- too many people have lost their homes, too many people felt things should have been better, and they had frustrations. them would like to see less government at all levels, to reduce expectations of what government can do. others are perhaps anti-democrat and were looking for a way to make inroads against democrats. clearly, there were some pretty conservative elements that seized upon those opportunities, and that tea party has become a home to a pretty conservative group. they have a significant number

in the house of representatives. perhaps as many as 80 members of the house out of a 435 that have identified themselves as tea party members of the house. the manner in which the house of representatives operates -- that is, speaker boehner, speaker of the house, relies upon his conference to develop plans. the tea party members have a tremendous amount of influence in the house of representatives. in the united states senate, dark a few members to identify as the party members, a -- but it there are a few members who identify as the party members, but they do not have anywhere near the influence as in the house. will be the future of the tea party? i have no idea, i really don't. it is certainly being a factor in the nomination process right now for the president, the nominee for the president on the republican side, and it is

playing a major role in a lot of primary elections are around the country on the republican side. it is not having as much influence on the democratic side on primary elections. what impact it will have in the general election, i don't know. >> for you, and for me particularly, how many people here are not -- not that the tea party is a great thing, but watched the tea party to see whether they are doing a good job. >> i think -- everybody has views. i don't disagree with what the right, again, for the view to be represented. i just think that tea party has had more impact in the house of representatives that they

should. they represent 80 members. i think the members should have broader views. i'm old-fashioned. i believe that after elections are over, you should work across party lines to get things done , and we have a responsibility to do that. [applause] i believe in compromise. i will compromise my principles, but i will cut -- might to get things -- i won't compromise my principles, but i will compromise to get things done . across party lines to get retirement savings plans done, on a lot of issues. that is how you get things done in washington. the last year has been painful, it has just been painful. >> senator cardin, could you give us some idea of how many eligible voters voted in the midterm elections, because i think it was -- from what i

understand, it was a very small, so that means that very few of us elected tea party. >> first, let me say we had a small number who voted in the midterms. in 2012, we expect it will be much larger vote. i must tell you, i don't understand why people don't v. -- don't vote -- why people don't vote. having seen what is happening in the middle east, where people all over what the right to select their own government, we in america say that the weather is bad outside, we're not going to vote, the weather is nice, we will do other things than a vote. all the things in the will to avoid a voting. i just think it is a responsibility to vote, and that too many people have given their lives for us to have this right to vote. in the midterm elections, it was a disappointing number of people who showed up. >> good morning, senator.

i'm from charles town here. we all know that the federal government has grown rapidly over the last several decades. it seems to be expanding without bounds. do you agree that at some point we have to have -- limit the size of the federal government? secondly, would you support some sort of hiring freeze on the federal government for a couple of years to hold that growth down? >> well, i agree with you. it is critically important that the federal government reduce its spending. i agree with that. i do think, though, that we cannot lose sight of our principal responsibility at this particular moment, and that is to get the economy back on track, we've got to create more jobs. we have to create more jobs. to me, that means we have got to be very selective in where we spend our money.

we have got to get better return for the money being spent, and our top priority needs to be job growth. therefore, i look at our schools, i look at our roads, i look at our energy, and look at our research, i look at those programs and say they have to be a high priority programs. i also want to make sure that we maintain public safety. public safety is not only law enforcement, but it also is public health, environmental. those issues to me are critically important. yes, government can always be more efficient, and we need to figure out ways to be more efficient. for all those reasons, i agree with you that we have to look for ways to do more with less, and it is going to be over an extended period of time. we need to do it in smart way. i think we did that with this budget compromise. i think the numbers that were reached will basically allow us to do what i just said.

i must tell you, freezes are unprecedented at the national level. freezes in budgets. we have a hiring freeze in all at almost every agency and the government right now. we are not replacing three people leave thos -- we are not replacing. people will leave, those jobs are remaining vacant. you look at the monthly numbers, and every month we have had more and more jobs in america -- not enough. but it is the private sector growth. the public sector has shown declines in jobs. we have over 300,000 federal workers in maryland, and it is critically important to our economy and country. tomorrow i'm going to be speaking at nih, and thanking them. these are dedicated men and women of finding answers to the most difficult problems in the world, creating hope for a lot

of families and creating jobs. i am going to be supporting their efforts, because i think that is important for america's future. but i agree with your premise, but we are already well past the freeze. we are actually losing employment at all levels of government. >> time for just two more brief questions. charles, take your pick. >> good morning, senator. i wanted to just ask a question -- i live on the eastern shore, i was wondering if you had any correspondence or any kind of work with andy harris, and i'm wondering what his views are on some of the things you have been speaking of today di. >> i work with every member of our congressional delegation, and clearly it worked closely with senator mikulski. the three congressmen from the baltimore region -- he lied to cummings, a key player in the

house of representatives -- elijah cummings, a key player in the house of representatives. i work with dutch ruppersberger, sarbanes. the baltimore delegation, i don't want to leave anyone out. in the washington area, chris van hollen, who is also on the super committee, one of the 12. steny hoyer, the no. 2 democrat in ads of representatives, a person who was known not only for his strong leadership in the democratic party, but his ability to work across party lines, one of the best bridge builders we have in the house of representatives. , one of thes one o other members, representing prince george's and montgomery county. roscoe bartlett, a longtime member of the house from the western part of the state, one of the bride is the science-we have in the house of representatives -- one of the

brightest science mines we have in the house of representatives, has been a strong spokesperson for energy and environmental policies in that house from the republican side. and then andy harris, newest member of our delegation, lives in baltimore county but represents the shore in anne arundel county and baltimore county. i worked with congressman harris on some of the chesapeake bay issues. we are trying to work together to bridge some of our differences. we have different views, and our voting records are certainly very, very different. i met with him many times, and we try to work together as team maryland to represent the people of maryland as effectively as we can. >> final question. >> senator cardin, i want to thank you on behalf of all of us for coming and being here. i want to make a suggestion at

that the reason why there is a low turnout and the rise of the tea party is the low respect with which congress is generally held. i wonder if this due to the fact that some of the congressmen are more concerned about party than they are about people, more concerned about getting reelected than at they are about the good of the country. [applause] >> i agree with your assessment about the lil image of congress, but i am going to take exception to the turnout at the polls, because we've never had great turnout at the polls in midterm elections. yes, perhaps it may have contributed in this midterm. but i don't believe there is -- i don't understand why people don't go. he don't like what is going on, come out and express yourself -- if you don't like what is going on, come out and express

yourself. to me, there is no excuse for people not voting in the 2012 election. i cannot agree with you more about your assessment rate your assessment is right on target. this may sound self-serving. i did not get elected to the senate to get reelected to the senate. i didn't. i got elected to the senate to do things. it is incredible what i can do in the united states senate. it is an incredible body. it is a great honor, but it is also an opportunity in the senate. i don't want with a single moment in the senate. i am as frustrated as you are, and i am not so sure it is a re-election issue as much as it is a my way or the highway type of thing. our political system was a bill on compromise come from its very first days. if you've not read about abraham lincoln, please read about

abraham lincoln, if not the greatest president, one of the greatest presidents in history of american. it is a compromise that built this great country. we were not perfect when we started. women could not vote. we had a lot problems when we started this nation. we figured out a way to get through that. but people who felt everly did not just take their marbles and go home. -- but people who felt differently did not just take their marbles and go home. they fought to get more progress. that is what this system needs to be about. you are absolutely right. to me is about using the opportunity -- the greatest honor of my life was one of voters in maryland told me to represent them in the united states senate. i don't want to give up one moment of that in trying to do that job. if everyone would just sit down and relax a little bit, listen to each other, but america's interest first, recognize that

compromise is not a nasty word, let's get things done, move this nation forward, maintain our principles, never go beyond our basic principles, but understand that it may take more than one day to get things done. if we do that, to me, the reputation of congress will go up. i hope more people will participate in voting. let elections take care of themselves. voters are a lot smarter than we think you are. you'll figure it out and you will vote for the people you think will do the right thing. look, i voted thousands and thousands of times. everybody in this room, will find that a lot of times you disagree with my votes. is a fact of life to do what is right. when i voted against the war in iraq, people tell me i would never win reelection again.

i voted against it because i thought it was the right thing to do. use the system the way it was meant to be used, to get results for the people of this country. your question is right on target. congress should look very carefully at our approval ratings. it is a clear signal that the way we are conducting business in washington is not what the people of this nation want. and we have got to change that. [applause] >> on behalf of charlestown, thank you for coming here, thank you for your words, god bless you. a round of applause for senator ben cardin. >> always a pleasure to be here. thank you. appreciate a. [applause]

oh, my goodness! you've got to be kidding me! >> 300,000 people, just did away

with -- >> i agree, you ought to have a secure quarters -- you have to have a secure borders. >> why did he do away with a 300,000 people? >> was not aware of that. >> why did they make maryland a haven for these people? >> i will check it out. absolutely. i could have mentioned that there is no cuts in the retirement benefits. it is one of my top priorities in the budget. no automatic sequestration. >> that is only the first round -- >> in the super committee, there is no question -- [unintelligible] i guarantee you that. absolutely.

>> under the mandate, americans to buy government insurance policy, defeated last time around -- >> i think it could come up. it will, at this time, -- it will, but this time, but i think -- >> senator cardin in catonsville, maryland. he has at nih today c-span is covering events from other members,. senator mike lee, xavier becerra, who is going to be on the debt as a reduction committee. you can go to the video library in search "town hall." you can find plenty of them. what's more video of the candidates, see what political reporters are saying, and track campaign contributions with the c-span's website for campaign

2012. easy to use, it helps you navigate the political landscape with twitter feeds, facebook updates, bios, the latest polling data, links to c-span media partners. all at c-span.org/campaign20 12. the heads up for tomorrow's "washington journal," weather at series continues. it airs 9:15 eastern on c-span, again on c-span2 at 7:15 eastern. also on the "journal" tomorrow, the cochairs of the wartime commission for contacting -- contracting. the report was issued earlier,

giving recommendations for improving the contract in process, it -- contracting process, including a separate inspectors general office. you can read it at c-span.org. >> good morning. i am co-chair with my partner, chris shays, who is -- he and i

will handle the initial parts of this briefing. each commissioner will also participate. first, i would like to introduce senator webb from the state of virginia. he is one of the two conferences, why we are today -- two cosponsors, why we are here today. we are grateful for senator webb's support, we are grateful that senator what is your day to provide his comments. i look forward to his comments, as you do. senator webb? >> it is a pleasure to be able to come here today and to thank all the members of this commission for the work that they have done on on this issue. this is the way that congressional commissions should work, bipartisan, high energy,

comprised of a highly qualified people who are brought in for a specific period of time. this is a sunsetted commission, which is why you are having the out-briefing today, and will continue to maintain a very high-profile careers out in the community once this is over. they have come up with specific recommendations. as a member of the senate, one of the two co-sponsors of this legislation, i can say today that they will be listened to, recommendations will be listened to. the energy that went into this will be appreciated. as someone who spent years and a pentagon, it was clear to me that in a period when overseas infrastructure and security programs were being put into place in iraq and afghanistan after 9/11, something was

clearly wrong. there were good companies, as this commission report has been clear to mention, that were doing a lot of good work, but there were also a series of structural and leadership deficiencies in terms of how these contracts were being put into place. a lot of them were being put into place. you can look at the dynamic of what was going on, particularly in iraq at the time, and it was not out of the question to be saying even then that there were billions of dollars in waste, fraud and abuse taking place without a proper structure. when i came to the senate, one of the eye openers for me as a member of the senate foreign relations committee was when we had testimony from the department of state discussing $32 billion programs that were going into iraq reconstruction, and as someone who was -- spent a good bit of time as a bean counter in the pentagon, i asked if they would provide us on the

foreign relations committee with a list of the contracts that had been led, the amounts of the contracts, the description of what the contracts were supposed to do, and what the results were. they could not provide us that list. for months we asked them. they were unable to come up with a list of the contracts that had been let. after many discussions with senator claire mccaskill of missouri, when expressed similar concerns as a member of the armed services committee, we introduced this legislation in 2007. we had to, like in all legislative proposals, it did on some areas we believe in strongly, such as retroactive accountability for some of the abuses that had taken place. we did not get that. we did not get the ability to have a subpoena. but what we did get was the structure that was put into place in this commission, and just as importantly, we got an

agreement that this would be bipartisan, and that it would be energetic and that it would come to us with the types of recommendations that could prevent these sorts of actions and abuses in the future. this is what we are receiving formally today. i wanted to come down here and endorse the quality of the performance of all of these individuals. christopher shays, michael tivo, the cochairs, come highly qualified. christopher shays spent years in congress, michael was a member of the defense contract agency. clark kent ervin, a former inspector general of the department of state and homeland security, a former undersecretary of state for management also assistant secretary of defense. the former assistant secretary for management at the department

of veterans affairs. the former managing director for acquisition and sourcing management at the gao a professor of government contracts and legislation at the university of baltimore school of law. if former undersecretary of defense, controller and chief financial officer at the department of defense. athere credentials are much broader than what i just read, but it will give you an idea of the quality and experience that went into this commission. again, i express my strong view that these recommendations will be listened to and when appropriate, at acted upon by the united states congress. thank you very much. >> good morning. thank you, senator webb, for your kind remarks about our work. we appreciate all of you coming this morning, especially senator webb, and are grateful and his

initiative in supporting the commission. thank you, ladies and gentlemen of the press, for attending this briefing on the final report to the congress for the commission on wartime contracting in iraq and afghanistan. i am the co-chair of this commission. with me is my partner, coach chairm -- cochairman christopher shays, and fellow commissioners previously introduced by senator webb. after opening remarks, we will be happy to take any questions that you have. we have provided a summary sheet on the report. at the end of the summer, you will see all of our names in prior affiliations if you want to quote anyone. the commissioners will be staying here after the close of the period if you want to pursue specific topics one-on-one. the commission has filed the final report with the officers of the u.s. house of representatives and the u.s. senate. this is titled "transforming wartime contracting, controlling

costs and reducing risks." its pages include extensive the findings, fact and recommendations, plus 15 strategic recommendations for reform. we believe that implement our reform proposals will save great amounts of money and, even more importantly, human lives, while improving the diplomatic, military and development outcomes in iraq and afghanistan. equally important, our reforms will do the same for future contingencies. whether they take the form of hostilities or humanitarian interventions, overseas or domestic responses to declared emergencies. let me also noted that when i said we believe, i really meant "we." our report has no dissenting views. every recommendation represents a bipartisan consensus. you would be truly hard pressed

to tell during our meetings which commissioners were democrat appointees and which were republican appointees. for almost three years, this has been a collegial and bipartisan effort to serve our country. here it is some quick background on that effort. the commission was established by congress in the national defense authorization act of 2008. we are independent, bipartisan body with eight. -- ate up with the commissioners and supporting staff. we participated in more than 1000 meetings and briefings, maintained field offices in kabul and baghdad, it made 20 trips into theater and other destinations, and issued a 205 special reports to congress. i will mention a few highlights and turn it over to congress man shays. total spending on contracts and grants in iraq and afghanistan from fiscal years 2002 projected

to the end of this fiscal year amounts to $2 billion. 31--- $200 billion to $31-60 billion of that total is being lost to waste and fraud. waste amounts to a total of 20% of contracts and grants bennet -- grants spending. we base these ranges on hearing testimony, our own commission research, a non-public government documents on fraud research that were performed in theater. we believe as much or more waste it may develop as programs and projects turn out to be un sustainable by the iraqi afghanistan government. i want to be clear that this report is not about criticizing

contractors. it is about criticizing that contacting, whether that involves poor planning and management by federal officials or poor performance and misconduct by companies. even if you take the upper range of our waste and fraud estimates, a significant amount of money spent on contracts and grants in theater appears to have been spent effectively. that point is importantly. the troops certainly feel that way. during our extensive travels in theater, we heard in phatic appreciation constantly at all levels with the quality and effectiveness of a contractor support for the u.s. military they concern is that the contract support has been extraordinarily high and that government has not effectively managed contracts to promote competition, reward good

performance, and impose accountability for poor performance and misconduct by both government and contractor personnel. having said this, i yield to the gentleman from connecticut, co- chairman christopher chase. >> you saw mike with his daughters. -- with his auditors. to follow what he was saying, despite some progress, the government remains unable to provide effective large-scale contract management and oversight. that fact is troubling because u.s. doctrine has held for more than 20 years that contractors are part of the total force that would be deployed in contingencies. yet the government was not prepared to go into afghanistan in 2001 or iraq in 2003 using large numbers of contractors. we were not prepared to use contractors and we're still not adequately prepared to use scaleactors to the skil

required. they had testified that the united states cannot go to war without large-scale contacting support. that included large contingencies, such as a to a large national disaster or terrorist attack. our report begins with a chapter describing a way in which the government has become over reliant on contractors. by over reliant, we mean that they have become the default option. they perform reserve -- the perform tasks reserve for federal personnel. those who are -- those that are legally permitted, some more inappropriate and against u.s.

interest in excess of contracts being undermined agency's ability to perform core missions. the titles of succeeding chapters describe the problems that the commission has identified in contingency contract in. inherently, governmental rules do not die a produced of contractors and contingencies. inattention leads to massive fraud, waste, and abuse. looming sustainment costs create new ways. the agency has not constitutionalized contracting as a core function. authorities prevent effective coordination. contract competition management and enforcement are ineffective. our final chapter explains that the way forward demands reform. we offer 15 strategic recommendations for major reforms to address these

problems. the discussions in the till appear in various chapters of the report. in appendix a of the report, this d thons we have made appear. we have added a second interim report that had been numerous number of recommendations. but they're all compiled in our final document. all of our reports can be viewed and download at the commission website, www.wartimecontracting.com. here are a few of the recommendations from the final report filed today. our third recommendation, phase out use of private security contractors for certain functions. recommendation no. 7, elevate and expand the authority of military officials responsible for contingency contract on the joint staff, the combat and commander staff, and the

military services. recommendation #rate, establish a new rule-headed -- a new dual- hatted position to provide oversight and strategic positiorecommendations. recommendation no. 15, congress should enact legislation requiring regular assessment and progressg of agencies' in implementing reforms and recommendations. this was not be overlooked. the commission sunsets, but the recommendations do not. there's time to make differences and iraq and afghanistan and there will be new contingencies. congress has a vital world to make sure we're better prepared for new contingencies overseas

or domestic than we were for iraq or afghanistan. it also has a vital role to avoid unnecessary new strains on the federal budget. unfortunately, the current stress in the budget may discourage members of congress from supporting the investments that some of our recommendations would require. having served 21 years in congress, i appreciate the difficulties of proposing new spending in a time of revenue constraints. but some of the reforms require no new spending. some can be made by simply reallocating existing resources. even for reforms that would involve new costs, holding back would be a false economy. with tens of billions of dollars already wasted with the prospect of more to follow and with the rest of recreating these problems the next america faces a contingency, the nile and delay are not good options -- denial and delay are not good

options. they should not be options. they have paid themselves many times over in terms of money and mission outcomes. contingency contract in reform continue for years. we have presented their blueprint. now we can only encourage others to turn our blueprint into solid, constructive outcomes. finally, on behalf of all the commissioners and staff alike, i would like to express our appreciation to the many officials in government, military, academic, who cooperated in the commission's research. in particular, we are grateful for the long standing interest and support of u.s. senator jim webb, the classical, and joe lieberman appeare. we appreciate the many members of the media who have followed our work. one final point that the commissioners wanted to make sure we express -- we are in all of our men and women who serve in the military -- we are in

aew of our men and women who serve in the military. we also want to include in that list equally the contractors who have lost their lives and the contractors who have been wounded. there have been thousands who have lost their lives. the sad thing is that it is almost as if they were expendable. they have not gotten the kind of attention that their deaths require. we just want to say thank-you to the men and women who served overseas, both in our government and in the military and the contractors for our country. we will have the six commissioners speak behind me. there was no first among equals. i think bob dickson can confirm that he got gray hair dealing with the commissioners who had strong opinions.

>> think you could i want to restate the website is www.wart racting.gov. thank you and thank you for your remarks. i thought about what surprised me in this two-year stint. in many ways, there were very few surprises. the outcomes we found were expected. there are a number of causes that have been around for long time. many people know what they argued they are still not getting fixed. but the one thing that did surprise me was that the numbers we're talking about just are not resonating.

$30 billion to $60 billion the not sound like much when you say it every day. but in the report, we broke down to $12 million a day that we're wasting. maybe that will make a little bit of difference in the attention of people paid to this. the second thing, as we go through the next couple of years looking at how the government is spending its money, my hope is that we do it smartly. part of the reason we are in the position we are in is because of the meat axe that was taken to the acquisition force. we decimated the government work force at the same time that we were calling more and more on contractors to do the work of the government. as we go through this, i would hope that we look at reallocating resources, not just cutting resources. a contingency environment offers

the perfect opportunity to show how the different departments of the government can work together. as you will see and are one of -- in one of our recommendations, we believe those decisions of allocation of resources and missions and responsibilities has gotten very much of a black between the military and the civilian sides of our government. and we have put in place a recommendation that we hope will rebels those efforts. thank you. -- will rebalance those efforts. thank you. >> i also want to reiterate our operation, both for the military and civilians that go out to the region. we were out there. this is not an easy place to work. if you are a civilian, certainly not if you're wearing a uniform, but also not for the contractors. we looked at it as what is best for the united states of america. we are convinced that wasting $30 billion to $60 billion -- my

personal view is that we're closer to $60 billion -- is not in the best interest of the united states of america. we will have more contingencies in the future. if we keep saying that we will deal with it when it arises, we will never fix the problems that clearly have arisen over the past decade. and there are some problems that we do not even think about that are inherent in the way we started to do business. for example, we have policies that make an awful lot of sense to give local nationals priority in getting contracts. afghan first, iraq first -- it makes a lot of sense, unless you start to think about the fact that we have limited oversight over these folks. and when we have limited oversight, that means that money can get wasted. we have to do something about that. we also have to think about projects that we start, but we're not sure can be finished or sustained. our report talks about that as well.

what is the point of spending hundreds of millions of dollars on projects that will then fall into disuse? and then we will have a hobson's choice. either let it fall into disuse and write it off as a waste or to keep spending our tax payer money for god knows how long in order to keep the projects going. we need to avoid those sorts of things. $206 billion is a lot of money on contracting. but so is $60 billion in waste, of which a considerable amount, maybe as much as $18 billion, is pure fraud. we have to do something about that. we need to do it for our troops, four civilians, for contractors, and for the american people. >> i took a particular interest in what is now chapter 3 of our report, which is the over 40

particular instances of waste in afghanistan. in some respects, we will produce the authoritative listing to date of bigger items of waste. i want to mention some specific things about this. you hear the figure of $30 billion to $60 billion and you wonder where we get confidence in this figure, apart from the basic derivation. you start looking at the individual items. if you look at, for example, the lack of competition in the awarding of contracts in iraq for 10 years, the kbr, we calculate that $3 billion was lost on that alone. one other thing i want to say about the list is that there is a tendency of some people -- i do not think the press will cover the people who watch the commission hearings, but the

broader public -- think that the problems with ways was mainly a problem with the iraq war. that is one of some of the names of companies like halliburton, were household names. eventually, we hope to draw down our troops in afghanistan. maybe the problems are behind us. if you look at the role of shame in chapter 3, you will see some incidences in iraq. but we have many instances in afghanistan, power plants, and instances that came out this year with logistics' contractors. the waste goes on. that is how we come up with these numbers that my colleagues are talking about. >> we were asked a number of very specific questions in legislation, the extent of our reliance on contractors. we were asked to establish the

amount of waste. our conclusion is that there is massive waste. but this is a much more than a contract story. this is, at the end of the day, about the success and ability of our defense diplomacy and development efforts. at its essence, it is truly a national security story. we have been told time and time again by senior defense officials, military and civilian, and senior state department officials that we will not go to war, we will not go to war without contractors. just as important as procuring weapons systems, training and readiness of our troops, the effectiveness and deploy the ability of our diplomats -- and of our diplomats,ty we must take contractors. we cannot afford the next for

the way we fought the war in iraq and afghanistan. it is a national security issue of the highest importance and demands reform. thank you. >> thank you. i will rehash some things that you have already heard. they are certainly important to me. we have learneheard many times e will work contingencies with contractors. you have heard it over and over and over. it is not just in combat environment, but in natural disasters as well. were we lack the capability is that the departments and the agencies that we looked at -- and i would venture that it would extend across the government -- do not to contracting seriously as a core function. they may do ok buying stuff, but

when it comes to contingency contract thing, particularly for services, they do not take it seriously and they do not have the mechanisms in place like they do with procurement of systems. what our recommendations due to a great degree is attempt to institutionalize, taken together within the departments and usaid, processes and procedures which will help eliminate some of the problems that we laid out in the report. what we need to do is change the culture and that cannot be done overnight. it will let be done overnight. it has been mentioned the

budget dilemma we face in this country. as others this morning have said, not all of our recommendations cost something. there are many of them that just require a change in processes and procedures and regulations. it leads me to one of the most important aspects of our work. that is the follow-through. all of you have seen many, many reports. unfortunately, many end up in the dustbin. what our concern is, when these wars in afghanistan and iraq and, we no longer see the atuallcasualty list whittle awy the end of the month, at some

point cigar and rigor will go away. where is the focusing functions so we do not fall back into the same bad habits? that is why i think the last two recommendations we have made in the -- and the strategic recommendations we have made in the report, no. 14 and no. 15, are so important. despite the budget dilemma that we face, congress has to look at these recommendations and, if need be, douai cost-benefit -- to a cost-benefit analysis. -- do a cost-benefit analysis. and have regular reports on their progress. they may not able to do some of these things.

but let's at least acknowledge that. if we do not have that function, if we do not have oversight over those recommendations and those departments, we will fall back into the same bad habits at the next contingency. >> thank you. i would like to emphasize two points made by others today. and i will and with one additional thought. first of all, we are not naive. we fully recognize that this is a time of severe budget constraints. there are some to recommendations, if implemented, would require additional resources. notwithstanding that and perhaps because of that, it is urgent that the recommendations be implemented. it is clear that we will continue, given the limitations on the federal work force, to rely on contractors. it is also clear the commission

will continue to engaging contingencies. the present libyan contingency in which we are engaged is one that could not have been anticipated three years ago at the inception of the commission's work. there is ongoing activity presently in yemen and somalia, to name the two countries which may yet burgeon into full- fledged complex. we were conceived of in a bipartisan fashion with principal support of senators web and mccaskill and senator mcauliffes. i would argue that it was not only in a bipartisan manner, but in a non-person fashion. it is largely up to the congress, working with this white house and subsequent ones, to implement our implementations. our hope is that our government will work in a non-person fashion to implement those recommendations. the key to implementing those recommendations is not just government action, but also the support of the news media in

calling to congress's attention, the white house's attention, and the public's attention to these issues on an ongoing basis as emphasize, these issues that we're talking about are not just issues of dollars and cents. it is important, but it is really a question of national security. it is a question of the lives of american men and women. it is a question of the safety and security of the american people. thank you very much. >> one last comment and then we will take your questions. >> the point i want to make is that you have heard the commissioners. we did not get up here and say that you will see this and you will see that. these are what they wanted to emphasize. you see the balance that is evident. i take great pride in having worked with chris. i take great pride increases alleging that i haven't bought quatorze mentality. -- that have an auditor's

mentality. 61, 111, and 162, if someone says what are the three areas that are most northward -- noteworthy, page 61 is security related to contract being, subsidizing the taliban or protecting american troops. the $30 billion that will be spent from 2014 to 2017 just to afford to buy food, guns, bullets, and equipment for the national security force. and page 162 is about the it on a tour -- the auditor opportunity of having immediate savings in finding them in the

austere environment. i hope, in closing, the the three key departments, the defense, state, and aid, has the will and leadership to bring home and to address these recommendations. >> mike has asked me to conduct the question in part. thank you for your patience. the commissioners are happy to respond to them. yes, sir. >> if these recommendations are not implemented, can you describe what happens if no action is taken? >> the question is what happens if these recommendations are not implemented. who wants to start? >> what happens is what happened before.

as you heard, we did not anticipate libya. we also did not anticipate afghanistan or iraq. we fight contingencies that we never expect. and then the size of them is not the actual fighting, but the reconstruction can for example, they are not talking about reconstructing libya. who will do a lot of that work? contractors. who will see -- who will oversee the contractors? a very small federal acquisition task force and a very small oversight task force. what your asking is more the same, more waste, more fraud, more abuse. can we estimate how big it will be? no. every dollar that goes to waste is a dollar that should be going somewhere else. >> i will make another point on that trip over the course of the life of the commission, we have seen improvements, more attention to these issues, more people devoted to managing

contractors and overseeing contracts. but what we are seeing right now are those gains are at risk if not lost. and number of the commitments that the leaders have made to strengthen their acquisition functions, we are already seeing falloffs. i think that is another point that is of concern. >> again, to take the dark side, if these recommendations are not implemented, there ought to be a hall of shame mounted or developed by you folks out there who, in the media, can address that. there ought to be accountability in that hall could as has been no one, there is an opportunity at hand and it ought to be addressed. >> you talk about the emphasis compared to the other types of cuts that they have to make. this is still comparatively small when it comes to

entitlements. do you feel that it is a failure of the super from ready for not implementing some of these things in spite of the fact that our numbers to not come close to the trillions that day got to reach? >> the answer would be a failure. >> military commanders in the field last fiscal control over contractors within their area of operations and responsibility. they cannot make sure that they conform to the standards of policies set out. some have gone so far as to recommend that they commanders be given authority and insure that policy is followed. how do you feel about such recommendations? what would you recommend about giving military commanders control? >> you're basically saying that commanders in the field have

some significant concern that they do not have the kind of oversight over contractors that they feel they may need. even in some cases, they may be having them do what they should be doing. i wonder if grant might want to take this one first or bob, someone in the military directly. >> i have heard in our travels similar complaints. but in my mind, most of those lead to the fact that a unit did not have the appropriate for an adequate number of contract oversight representatives, which are to be provided from that unit itself. we saw units getting ready to deploy to iraq and afghanistan early on in the process. they had no idea how many

contractors they would fallen on when they -- fall in on when they arrived in country. there were ill-prepared to oversee the contractors in many cases. -- they were ill-prepared to oversee the contractors in many cases. i must say that that is getting much better and units are now deploying with a set number of core contractor representatives, in some cases. >> i would also just add that we would expect that, since nearly half of personnel overseas or contractors equal to the size of military, there needs to be better integration from the pentagon and you would not see just a passing comment in a cute your -- in a qdr. the government has done more on the contractors than the dot has

done for the bulk of the contractors. this is a solvable problem. frankly, we did not want to inject ourselves too much and tell the military had to run their operations. but i think it is self-evident what they need to do. >> can you compare in any way iraq to afghanistan, how they are different or the same? is it different the ways or issues of fraud and abuse? >> the problems of abuse in iraq were sort of very crude because the war -- the need for contractors started very suddenly in 2003, unexpectedly. so large numbers of contracts were given out that were not definitized at all, not detailed. in contrast, afghanistan, for our purposes, the large numbers

in contacting dollars came in 2009 ando surgeons 2010. in that case, there were lessons learned and it was not done in a crude way. but in a great deal of reconstruction projects, which have been a great deal of failure because the area has not been prepared, or money has been siphoned off to the insurgency through afghan security subcontractors -- what we found was a there were plenty problems in afghanistan even if there were further down are different than the iraq once. >> let me also take a crack at that. what we have seen is some of the good lessons learned in iraq have not migrated to afghanistan quickly or, in some cases, at all. for example -- two examples -- in iraq, they evolve into having

a contractor operations. in afghanistan, they decided not to do that for reasons that freckly elude us. in the second issue, in iraq, defense and state entered into a memorandum of agreement on how they will run from his tree contractors in the country. it was a good and reasonable step. they did not decide to do that in afghanistan, again, for reasons that are not apparent to us. we recommend that they do that. did the hard lessons that were learned in iraq -- the hard lessons that were learned in iraq have not migrated to solve problems in afghanistan. >> i would add one additional point. people tend to forget that the afghan war predated the iraq war. america's focus began just a few years ago. notwithstanding that, after all the lessons that should have been learned in iraq, they were

not applied in afghanistan. one further example that i would cite is that they special inspector general for reconstruction was slower to working on cigar. this underscores the importance of having a permanent contingency inspector general so that the next time america goes to war or we engage in some major humanitarian activity cadre is a standing cabare, of inspectors to make sure that the lessons learned in iraq and now lessons learned in afghanistan are applied this time there is a contingency. >> i would add one more thing. i think the commissioners would agree that, however that sustainability is, project

activities and the country that cannot be sustained and therefore will end up being a wasteful expenditure, they are magnified in afghanistan. afghanistan, for various reasons, does not have the resources to carry on in many cases. >> congress has demonstrated an inability to work effectively. for example, the raising of the u.s. debt limit, a very urgent issue. you outline that this is also urgent. what confidence do you have that it will be followed through? >> i admire the men and women who serve here and i went back home and said that i have met some of the finest people. when you see the collective outcome, you're not impressed. and then there are a few that can make everyone look bad. i think both sides of the aisle know that we have a gigantic problem. we postponed dealing with are

extending issues for decades -- for a decade now. this is the decade of decisions. decisions cannot be put off. i would like to think that they will be your to implement proposals. in the and, you will save far more than you have to spend -- in the end, you will say for more than you have to spend. >> is there any recommendation in the existing contract in process that would include a surcharge for those who bid on the contract to pay to ensure against waste? >> no. there are some agencies that operate on a reimbursable basis. if they can advocate or convince organizations that they can provide better contract

administration, they are refunded. there are other organizations, the defense contract agency, that is funded as a line-item. that is why we make the point in their reports that those agencies have to be addressed. but the short answer is no. is it valid to continually look at methods to finance oversight organizations so that we can assure that, when a contingency occurs, they can hit the ground? yes. >> i have a question about the with the numbers were computed. >> repeat the question. >> how do we come up with the numbers we came up with? there is a general sense out there when you speak to people out there from the inspector general for iraq or cigar, the inspector general for

afghanistan there are a lot of academic studies that waste is somewhere north of 10%. we had our staff and we met with people and met with experts and we got a lot of information frankly the people did not want to say officially but gave to us. we came up with the pair metric estimate. that is to say that you have to under $6 billion spent. if you take 20% of that, you're just north of $40 billion. then you look at the front side. the front side is interesting because we came up with investment between 5% and 9%. the association of fraud examiners said that 7% of all commercial contracts are lost through fraud. and we were at 5% to 9%. we felt we were pretty spot on. that is how we came up with our

estimate is an original commission estimate. we stand by it. we're very confident in it. as i said earlier, a person to believe that the number is much, much closer to $60 billion that to $31 billion for all the reasons that you just heard from everyone else. >> i might add that we're but as bidding into countries that have a different view of waste and -- we are participating in two countries that have a different view of waste and fraud. >> i would like to add one other thing. i do not have the page in front of me, but look for it. one of the things we found, for example, that is hard to calculate is the amount of money spent to buy off insurgents. we actually have a photocopy of a document that chris and i were handed when we were in afghanistan. it is a bill from the islamic republic of east afghanistan or something like that. it has a telephone number.

it says that this is to contractor. you want to operate safely, this is the number to call. we did not put the number in because we thought there may be somebody in this country who has that number and they will get a lot of calls. the point is that you're getting all kinds of money siphoned off that is just impossible to measure. the estimates are 10%. but knows? >> right here, chapter 3. the chapter that trusted law " -- a lot of work on, we had to tone him down because it would have added 30 pages to the document. >> you have an interesting perspective. you were at the iraq war as controller. now you're on the side criticizing a lot of that war. you have a book out on how the bush administration this managed reconstruction.

-- how the bush administration mismanaged reconstruction. >> we are not criticizing the war. i do not want anyone to think that we are. i just need to clarify that. we are criticizing that contacting in the war. >> i do not know that i should answer that, but you did advertise my book. i will repeat the question. i wanted to get it right. we are a bipartisan commission, as you heard, but we are really nonpartisans. what contributes to this matter, we're also bipartisan. you have to look back into the 1990's and see how the acquisition work force was cut back. the people that were doing the oversight, they were not many. then we get into the afghan war. you do not have in the first few years anything like the money

that was spent in the last few years. to give you an example, we spent in the region of $1 billion or two billion dollars in the first few years. i believe that, if we have spent more than, we would be in better shape now. but it does not matter. in iraq, we immediately spent huge amounts of money and the contracts that were signed were signs so hurriedly that they did not specify details. for that reason, you had huge amounts of spending and the contractors themselves did not have the acquisition systems to manage that amount of expenditure. so you had a problem on top of a problem. you have a shortage of people doing the oversight because they had been cut out in the 1990's. then you had this very rapid acquisition program. contractors were not ready for it. stuff had to be done. and then, when it started to

challenge -- it was challenged by my office under the direction in part of my team though -- mike teagubow. as things were getting results, money was getting spent. who was to blame? everyone was to blame. let's not just look at the past and point fingers. let's learn and since and is something about it, regardless of who is doing -- let's learn lessons and do something about it, regardless of who is in the white house. >> [unintelligible] >> let me make sure since clarity is important. let me be really clear. first of, we are one small part of their mammoth task. but if they do not take a good look at it, it will be a

failing, not a failure of the committee. >> [unintelligible] >> there is a whole issue that mike could speak to just on the backlog. >> it is more the defense. it is state and usaid. but the dollars are driven by defense. there are opportunities out there for significant cost reduction. the point we make is that the committee can look at that -- and we have seen some indication that they are very keen on it. i will give you one example that are referenced on page 162. the defense contract audit agency has been a request for 100 auditors. that is not a lot of cost in the billions of dollars we are working for the next four years so they can reduce a backlog that goes back to 2005, 2006, and 2007 and forward. if you're trying to be fair to contractors, and we are, try to

be a contractor that will support a claim and they submitted six years to seven years of claims that have not been supported. that is the challenge of the reduce backlog. instead of the backlog outlined out there, presently the $188 million that will go up to $10 trillion, those are unaudited costs. right now, out of the $588 million, we estimate that $2.1 billion will be recovered. that is subject to getting funding for the auditors that they have requested. the funding process is going on right now. you can authorize what dod did. if they hire them late in the year, they are one year behind. those things are occurring. if you look at the trillion dollars and quantified, it can go to $4 billion.

half of which is the needed savings and 40% of which will be cost avoidance opportunity. those are the kinds of immediate decisions that i would think the committee would be interested in. >> we will just take a few more questions and then we will stay for any individual question. >> [unintelligible] >> who wants to take that question? >> if i heard you well, how involved is the government of afghanistan and iraq in the corrections of the things are in the fixing of a corruption? i can answer both. clearly, there is a lot of corruption in both countries. two point to any individual in the government's is extremely difficult. frankly, sometimes people who

are appointed to end up getting killed. we want to be very careful about who we accuse. in terms of the solutions, again, there are people in both countries who are working very hard for those solutions. they realize that if they want to have continued american involvement in the reconstruction of their countries, given the debt crisis we face, the american public might say enough. if that is the case, they will lose out. i believe that there are many officials in afghanistan and in iraq who would be exceedingly sympathetic to what we have written. >> if i can mention a specific illustration that is somewhat known as they feller the $900 million bank in afghanistan -- as the failure of the $900

million bank in afghanistan. it had high officials in that government to work on the board of the bank and who were receiving loans that were not backed. i will let go on and on. of course, it was a government problem in afghanistan. on the other hand, our particular interest was the contract involved. there was an american contractor, deloitte touche, who was hired to be a consultant to the central bank of afghanistan and to look at things like the kabul bank which is 40% of the banking system in afghanistan. deloitte touche, even though it was privy to many indications of fraud, did not tell the u.s. government what it knew. the u.s. government found out about the problem not from the contractor it paid, but from the washington post.

the u.s. government -- contractors have their aspect and the afghan government has there's. >> just one more point in regards to this. we met with officials in afghanistan -- i can give you the office because i do not want to endanger their lives -- but they provided tremendous information in their capacity about fraud in the afghan government. these are afghan officials. they did their job. but they were very fearful that it would become public. in other words, they disclosed the corruption within the government, but they knew that it would be kept quiet. if it was not kept quiet, they feared for their lives. that is a real disincentive for pointing out fraud in your own government. it was extensive and it was large amounts of money and major government officials involved.

we will take just 2 questions. you when you and we will be done. >> can you talk about getting these recommendations involved in the conference a bill in the next few months? which of the recommendations can be a implemented by the agencies without legislation? >> it is a good list that we will provide you. secondly, we have been in continual contact with staff. our big achievement yesterday was to issue this report without the press getting it first and the staff reading about it. we were determined that none of you would get this report and the staff got it first and we succeeded. so we have a little credibility with the staff. >> iraq and afghanistan is where this has happened. if you go back to vietnam,

contractors have been involved for a long time. in these two wars and the level of waste and fraud, what is so different? >> it is easy to read event if we provide the resources to prevent. not all of it -- it would be easy to prevent if we would provide the resources to prevent. not all of it be prevented, but a lot of it. >> the immediate run of the troops was so quick. contractors were trying to be very supportive. but we were literally throwing contractor support out of necessity. then a good company tries to be responsive and sometimes their business systems likag. a commission like ours -- we will not put the good housekeeping seal of approval. that was not our job or our mandate to say that these are the eight companies that did a good job or that your eighth

government organizations that have done a good job my history is that, when you put that housekeeping seal of approval of, something happens the next day and somebody says why did you do that? someone in this audience. but the about this, we have seen numerous examples -- but without this, we have seen numerous examples. in 2008, in afghanistan, we would say who are the oversight officials for the tremendous buildup in contractor work and there really was not any. they could i give a list. within a year, they have that list and they had the assignment. within two years, by 2010, they had training mounted and it was clear that, in the military, you had to provide these people. it was clear within the guarantor side -- it was clear in the government side that you had to have oversight. it is the same infrastructure that they are laying out that

ought to be able to take that tremendous buildup that is the nature of contingencies and more effectively deal with it and not waste so much money. i just have to thank everyone that is here. it was a collective effort. >> thank you all very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> the commission on wartime funding, the final report to congress and the age-page summary can be found on our website at c-span.org. you also have a chance to ask questions to the chairman and the cochairs of the committee. there will be on "washington journal" tomorrow morning at 745 eastern. the program gets under way at 7:00 a.m. also, we continue our series on the weather, focusing on the role of the oceanic administration. this evening, book tv prime time gets underway with james blair discussing a female marine

officers experience in combat in iraq. at 10:15 p.m., we have "the social animal" from: is -- from columnist david brooks. >> he is a partisan guy who wants to unite people. all of the problems of the error you could get from this guy and why we could not be let him is the same reason that we eventually went to war. they could not get results. >> he ran against a great military hero dwight eisenhower. i do not think there's any steep -- anyway that adlai stevenson could have 1. >> if you think of 1928, you had herbert hoover. but it paved the way for franklin roosevelt there are 40

people in this series, many of whom you may never have heard of. and all of them, i can pretty much guarantee, they will find interesting, fascinating, and surprising. >> history professor james baker, clear politics better carl cannon, and richard norton smith talk about the 14 men who ran for president and lost. friday at 8:00 p.m. eastern and pacific. it is a preview for "the contenders," a four-week series. >> the justice department filed antitrust lawsuit to block the at&t takeover of t mobil. it would reduce competition and lead to price increases for consumers.

here is a 10-minute portion of the press conference. >> millions of americans rely on mobile wireless telecommunications services in their everyday lives. whether you're a parent using a cell phone to check upon your teenager or a working professional using a laptop or a smartphone to conduct business or surf the web. mobil wireless communication plays a vital and an increasing role in our daily lives. we all reap the benefits of this incredible technology because there has been fierce competition in this industry, which has brought all this innovative and affordable products and services. in order to ensure that competition remains and that everyone, including consumers, businesses, and the government, continues to receive high quality, competitive pricing, and good mobile wireless

products and services, the department of justice today filed a lawsuit in the united states district court in washington, d.c. two blocks at&t's acquisition of t mobil. the department filed lawsuits because we feel the combination of at&t and team mobil would result in tens of millions of consumers all across the united states facing higher prices, fewer choices, and lower quality products for their mobile wireless services. consumers across the country, including those in rural areas and those with lower incomes, have benefited from competition among the nation's wireless carriers. particularly, from among the four remaining national wireless carriers. this lawsuit seeks to ensure that everyone can continue to reap the benefits of that competition. right now, four nationwide

providers account for more than 90% of the mobile wireless connections in america appeared and preserving competition among them is crucial. for instance, at&t and t mobil currently compete head-to-head with 97 of the nation's largest 100 cellular market areas. they also compete nationwide to attract businesses and government customers. with a -- were the merger to proceed, there would only be three providers with 90% of the market and competition among the remaining competitors on all dimensions, including price, quality, and innovation would be diminished. as can be seen in the department's complaint, at&t sells competitive pressure from t mobil. one cites an at&t employee

observing that t mobil "was first to have the hspa + devices in their portfolio. we added them in the loss of speed claims." as you can see, a merger would combine two of the four largest competitors in the marketplace and would eliminate t mobil, an aggressive competitor, from the market. from the market. one thing has not changed, the division will remain steadfast in its mission to vigorously enforce the anti-trust laws. that is what the department has done today. the leadership transition has been a seamless and the right decision was reached in this case. we are seeking to block this deal in order to maintain a vibrant and competitive marketplace that allows everyone to benefit from lower prices,

better quality, and innovative products. i want to express my deep -- deep gratitude for so many efforts and the anti-trust division staff to have tremendous expertise in this industry. i want to thank you for your leadership in this effort. you and your team have done the right thing for consumers. now i would like to turn it over to the acting assistant attorney general, who will say a few words. >> thank you. thank you for your leadership and support on this case. as the deputy attorney general mentioned, this is an extremely vital industry with more than 300 million feature phones, smart phones, data kurds, tablets, and other mobile wireless devices in service today. as you're well aware, the department of justice has significant experience in this industry, going as far back as the original breakup of at&t.

we know this industry well, inside and out. the anti-trust division conducted an exhaustive investigation. we conducted dozens of interviews of customers and competitors. we reviewed millions of at&t/t- mobile documents. the conclusion we reached is clear -- any way you look at this transaction, it is anti- competitive. our action seeks to ensure that our nation enjoys a competitive wireless industry that it deserves. t-mobile has been an important source of competition among the national carriers through innovation and quality enhancements. for example, the world out of first nationwide high-speed data network using advanced hspi plus technology in the first hand set using the android operating system. it has been an important source of price competition in the industry. unless this merger is blocked, competition and innovation in

the mobile wireless market, and the form of low prices, innovative wireless handsets, operating systems, and calling plans will be diminished, and consumers will suffer. t-mobile competes with the other three national advisers to attract individual consumers, businesses, and government customers for mobile wireless telecommunications services. they compete on price, plane structure, network coverage, quality, speed, devices, and operating systems. a combination of at&t and t- mobile would eliminate this price competition and innovation. it would reduce the number of nationwide competitors in the marketplace from four to three. eliminating this aggressive competitor, which offers low pricing and innovative products, would hurt consumers, businesses, and government customers that rely on a competitive marketplace to provide them with the best

products, the best prices. it is important to move expeditiously to preserve the lower prices and innovation resulting from t-mobile's competitive presence in the market. that is why we filed a lawsuit to block the transaction. our goal is to preserve price competition and innovation in this important industry. i want to end the divisions deputies for their expertise and counsel. -- i want to thank the divisions deputies. i want to recognize the telecommunications staff and many others in the division for their tireless work on this important matter. consumers and businesses around the country owed you a great deal of thanks. we also want to thank our partners in law enforcement, including the federal communications commission and the state attorneys general, who have assisted and partnered with us in this investigation. >> just no, today's justice department briefing on the at&t/t-mobile merger rears

tonight at 8:00 p.m. here on c- span. next, president obama called on congress to pass extensions of the surface transportation bill and legislation that we authorizes the federal aviation administration. after that, two organizations, the u.s. chamber of commerce and the afl-cio called annual labor day briefings on u.s. jobs and the economy. earlier today, the white house said that president obama is calling on congress to hold a prime-time address next week, a joint session of congress. he sent a letter to speaker boehner and harry reid asking for the joint session on wednesday, september 7, at 8:00 p.m.. ahead of the, the briefing from the president, the comments on the passing of the transportation bill, and also the faa reauthorization bill. both bills are set to expire at the end of september unless congress renews the legislation. here are the president's comments from earlier. they are about 10 minutes. >> good morning, everybody.

please have a seat. i want to say a few words about an issue that affects thousands of american workers, as well as millions of americans to drive on our nation's roads and bridges every single day. at the end of september, if congress does not act, the transportation bill will expire. this bill provides funding for highway construction, a bridge repair, mass transit systems, and other essential projects to keep our people and our commerce moving quickly and safely. and for construction workers and their families across the country, it represents the difference between making ends meet or not making ends meet. if we allow the transportation bill to expire, over 4,000 workers will be immediately furloughed without pay. if it is delayed for just 10 days, they will lose nearly $1

billion in highway funding. that is money we can never get back. and to delay it even longer, almost 1 million workers could lose their jobs over the course of the next year. that includes some of the folks behind me today. we have two with the federal highway administration. we have two who works for the fort myers construction company. if we do not extend this bill by the end of september, all of them will be without a job just because of politics in washington. that is just not acceptable. that is inexcusable. it is inexcusable to put more jobs at risk in an industry that has already been one of the hardest hit over the last decade. it is inexcusable to cut off necessary investments at a time when so many of our highways are choked with congestion and so many of our bridges are in need

of repair, when some many commuters depend on reliable public transit, and when travel and shipping delays caused businesses billions of dollars every single year. now, if this story sounds familiar, that is because we have heard it before. just a few weeks ago, congress refused to act on another bill, typically a routine bill that would have ended holding thousands of aviation workers off the job in delaying necessary airport improvement projects. when congress finally got their act together, the only fund and the faa until september 16. that is why when they come back next month, not only do they need to pass the transportation bill, but they have also got to pass a clean extension of that faa bill. for longer this time and address back pay for the workers who were laid off during the last shut down. at a time when a lot of people in washington are talking about

creating jobs, it is time to stop the political gamesmanship that can cost as hundreds of thousands of jobs. this should not be a democratic issue or a republican issue. this transportation bill has been renewed seven times in the last two years alone. that is why my secretary of transportation, ray lahood, a republican, is with me today, along with david shriver from the chamber of commerce and richard trumka of the afl-cio, two organizations to do not always see eye to eye on things, because they agree on how important it is for our economy that congress act now. i am calling on congress as soon as they come back to pass a clean extension of the surface transportation bill, along with a clean extension of the faa bill, to their workers in communities across america the confidence that vital construction projects will not come to a halt. after that is done, i am also

proposing that we reform the way transportation money is invested, to eliminate waste and give states more control over the projects that are right for them, and to make sure that we're getting better results for the money that we spend. we need to stop funding projects based on whose districts they are in and start finding the based on how much good they're going to be doing for the american people. no more bridges to know where. no more projects that are simply funded because of somebody pulling strings. we need to do this all in a way to get the private sector more involved. it is how we are going to the construction workers back to work right now, doing the work that america needs done. not just a boost our economy this year, but for the next 20 years. finally, in keeping with a recommendation from my job is council, today i am directing certain federal agencies to identify high priority and research projects that can put people back to work. these projects -- these are

projects that are already funded, and with some focus attention, we could expedite the permitting decisions and reviews necessary to get construction under way quickly, while still protecting safety, public health, and the environment. tomorrow in dallas, my jobs council will meet with local business owners and other folks about what we have done so far to rebuild our infrastructure and what we can do to make sure that america is moving even faster in getting people back to work. that is what we are going to need to do and short-term. keep people on the job, keep a vital projects moving forward. some projects that are all -- already under way in a smarter way. if we're honest, we also know that when it comes to our nation's infrastructure, our roads, railways, mass transit, airports, we should not just be playing catch up. we should be leading the world. 10 years ago, our nation's

infrastructure was ranked sixth globally. today, it is 23rd. we invest half as much in our infrastructure as we did 50 years ago. with more than 1.5 of the number of people. everybody can see the consequences. that is unacceptable for a nation that has our writ -- always dreamed big and built big, from transcontinental railroads to the interstate highway system. it is unacceptable when countries like china are building high-speed rail networks and gleaming new airports well more than 1 million construction workers who could be doing the same thing are unemployed right here in america. so when congress is back next week, in addition to passing the clean extensions to prevent any halt on existing work, we're going to have a serious conversation in this country about making real, lasting investments in our infrastructure, from battle -- better ports to is smarter electric grid, high-speed internet, high-speed rail. at a time when interest rates

are low and workers are unemployed, the best time to make the investments is right now, not once another levee fails or another bridge falls. right now is when we need to be making these decisions. now is the time for congress to extend the transportation bill, keep our workers on the job. now is the time to put our country before party and to give certainty to the people who are just trying to get by. there is work to be done. there are workers ready to do it. and that is why i expect congress to act immediately. and to all the folks who are here on the stage, thank you for the outstanding work you're doing in helping maintain our nation's infrastructure. thank you very much, everybody. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> the president earlier today calling on congress to pass the transportation bill. the president come in agreement with thomas donohue and the u.s. chamber of commerce, the president and ceo of the chamber. earlier today, the chamber held their annual labor day briefing for reporters. thomas donahue started the briefing. he started talking about a number of things that chamber wants to see congress to get done in terms of job creation. you also heard from martin regalia, the chief economist for the u.s. chamber. the briefing from earlier today is 90 minutes.

.> good morning, everybody thomas downey has some remarks to make -- thomas downey you has some remarks to make. >> thank you. we look forward to your latest economic forecast and as you know, martin is one of the best in the business. you may not agree with him all the time, but at least you understand what he's talking about. we're going to hear from randy johnson. he gets to deal with the easy issues at the chamber, like health care and labor relations and all of the topics were parties seem to agree all the time. it will be interesting to hear what he has to say about the three new regulations that were

issued at the nrld as the chairman made her way out the door yesterday. that will be very interesting. their presentations, i hope, will help create some useful context to the major economic debates that are now regaining that momentum as people come back from their holiday. in the coming days, everybody and their uncle will be offering a jobs plan, and that is a good thing, because that is where the focus needs to be on jobs. we are not going to be able to do with the other challenges we face if we do not start putting people back to work, to take them off the pelvic payroll, and have them paying taxes and driving economic confidence. at the chamber, we have been intensely focused on jobs since the outbreak of the financial crisis. just look at the front of the building. we have been talking about it for a long time.

we want to share some ideas from the institutions that actually create jobs and opportunity. that is the american business community. the most immediate priority facing our nation is to create jobs for some 25 million americans who are either unemployed, underemployed, have given up looking, or are new entrants coming into the workforce. graduating from college, leaving high school with a lot of hope for the future and trying to get into the work force. to do so, we need policies that promote and sustain a stronger economic growth. we need to address the extraordinary fiscal and competitive challenges that were smothering growth and driving away jobs. but at the same time, we must also address the immediate need for jobs now, today. for those 25 million americans. we need action now, not next month or next year or at the

next election. we need it now. so the u.s. chamber is currently finalizing a letter to the president, to the congress, to with specific practical steps that we can take to help quickly create millions of new jobs without increasing the deficit, because a lot of the systems and plans you're going to hear are going to cost us more money than we are going to put back into the system. so let me give you a very short preview of some of our ideas which, for the purpose of today, falling to six baskets. the first and perhaps the easiest is to trade. we need to push the pedal to the metal and get these three pending free trade agreements with colombia, south korea, and panama completed. i have been saying for a long time that by doing that, we would save 380,000 american

jobs, which would otherwise go to our competitors. as you know, canada has an agreement with colombia right now. the eu has a big agreement with korea. i would hope we save as many jobs, because i know those people are picking up business that we're losing. the south korean deal alone, i am told, would create 280,000 jobs for americans in the very near future. here's another idea on trade you do not hear about. under the city about 30, the administration put in at nearly all of its proposed exports and control reforms without legislation. they have been working on the for three years. there's a lot of agreement on and doing it so that we can go out and sell these things that you could otherwise by on a street corner in europe. one study says we could create as many as 340,000 jobs by increasing the number of products that we can export

without compromising national security. that is a lot of jobs. the second area is energy. we can create literally millions of new american jobs if we simply develop our own abundant energy resources on federal lands, offshore, and on private lands. those resources are primarily oil and gas. we can do so in an environmentally responsible way, generating economic growth and job creation, and government revenues while reducing our reliance on foreign sources. we can also create jobs by building more energy infrastructure. for example, you have all heard the argument about the keystone xl pipeline connecting alberta, canada and the u.s. refineries in texas. i have been very encouraged to hear that the administration is moving in a positive way there, but we need to do this because we can create 250,000 american

jobs in a big hurry. and investments in the united states of more than $20 billion in government revenues that are about half a billion dollars a year. this is a sure thing. and we will, in our ledger, allied four or five more of these. when you add them up, you're talking about millions of jobs without spending money only giving the go-ahead to do it needs to be done. the third bucket is infrastructure. i am pleased to be talking about infrastructure right now. the chief operating officer here is over the white house for the president's discussion on infrastructure. tomorrow, i will go to dallas to join the president's council on jobs and competitiveness. what do we need? it is simple. we need a highway bill. and we cannot cut the size of it. it pays for primarily from user

fees. we need an faa bill. we need a water bill. this is a complicated issue. if you do not have them, then you lose the jobs you have today. if you do get them and we keep pushing forward on it, we can create jobs that we need tomorrow. an estimated $250 billion is sitting around in global private investment firms that would like to invest in our infrastructure, because they have a sure way of being paid. we have seen it happen in individual states. we're very anxious that we move forward on this in a big-time way. the people that get these jobs, many of them would otherwise be working in the housing industry that does not exist. we can unlock all of this capital. we can create probably 1.5 to two million jobs, and i hope to talk more about this tomorrow in dallas. the fourth issue or the fourth

basket is the travel and tourism. we have about 7.4 million people in the united states who are employed in the travel and tourism business. if we could simply go back to the 2000 level of bringing people into the united states, we would create another 1.3 million american jobs. there are issues. there are national security in border security issues, but people are not very welcome when they come here. folks go from the canada and the eu who would normally go to the united states are going to other places, because we're not treating them very well. we can do some stuff here without spending money and get more people to come here and bring their cash with them. the fits issue is a regulatory relief. if there was ever a time in our nation's history when we should say, hold on a minute, we're putting out regulations as fast as you can count them.

let's get the things that came out yesterday. look at the things that people are talking about coming out in the epa. we think that it is time for the nation to take a breath. we have to be very careful when we look at what regulations we are now going to put into place. the administration should immediately issued an executive order directing agencies not to issue any discretionary regulations that would have a substantial economic impact and tilled the economy improves. by the way, you hear all the discussions in today's news about the $1 billion and above regulatory issues. there are tons. maybe they are important, but they're not life-threatening issues that we should hold them off. now's not the time for a slew of regulations that kill jobs. now's the time to create jobs. finally, let me say a word on taxes. we need a tax reform and

entitlement reform program. we have written to the congress. we think when the 12 apostles get themselves together and start doing this, we need to really look at those issues. we cannot do that in the short term. we can do it quickly, but we cannot do it right now. there are some tax things we can do right now, and i will mention one. we need to think that we can have a tax holiday and let companies bring some of the money they already earned, because you know we're the only country in america now that pays double taxes, the corporations do. when they earn it overseas, they paid their and pay a year. if we had a tax holiday and lower the numbers significantly, there will not bring it all home. a lot of their future business is going to be overseas. that is where 95% of the world's customers are, there will bring a lot of it home and put it into

the system by reducing the rate for a specific time on these profits earned overseas. u.s. multinationals could bring as much as $1 trillion back here. i do not know whether they would, but a good number. a new study suggests that this move could create 2.9 million jobs over a two-tier implementation time. i do not know if it is that many. but if it is 30% of it, it is worth doing. there is nothing lost. there's no cost. you are going to pay less taxes on it, but you are not getting any taxes on the right now. let me conclude. these are a few of our ideas. our little to do -- are letter to president and congress will contain more details on all of them. our job and will be accompanied by a massive motive it -- mobilization of our underlying membership of 3 million companies and our grass-roots army. we are encouraging them to tell

their elected officials how our plan will create jobs in their communities and to share their own ideas. and other things that will be bought about to get jobs there in a hurry. this will be our underlying focus for as long as it takes to get our economy moving again and put people back to work. our jobs plan does not absolve us from the responsibility to tackle the other big issues like federal spending reform and tax code, entitlements, and a whole basket of issues that we all know have to be dealt with. the point is, we need to act on all of this now. we need to get moving, and we need leadership in the business community, the congress, and the administration. some will say, well, we have heard all these ideas before. the answer is, yes, you have. not in as many details. not with a simple here is how you do is list.

the reason you do it again is because they have not done a dam thing about them. we're going to keep pressing these points until our government leaders start moving on them. there will be questions about how quickly these ideas can work. we believe that they can start working in very short order. and it looked, there is no magic wand year. if you're looking for a miracle, go to church. no, we're not giving away miracles. if you're looking for practical ideas that can start the process of recovering the millions of jobs we have lost since 2007, then start these things right now. one thing is for certain. if we do nothing, if we sit on our hands, if we wait for things to improve, if we go ahead and try and spend more money to make this work, we will not create the jobs we desperately need. we will continue to fall further behind. the chamber is committed to being the leader in trying to push this particular plan.

we look forward to other people's plans. but this one does not cost. this one is stuff we can do with the authority of the congress and the authority of the administration. we're committed to working with all parties to ensure that america remains not only the greatest economic power on earth but the greatest country on earth, and we better get about it, because right now we're losing some of our traction. so i thank you very much. i'd think when you talk to martin and randy, you will see that we're focusing very clearly on what is going on in the economy and what we can do to help, and we're focusing very clearly, with a sharper focus than we have in a long time, on what is going on in the labor side and in health care and other matters, all of which add to the cost side. what we're talking about starting this morning is how we

add to the jobs side. so thank you very much. i have to go and do another thing, but if you have a couple of questions, i will take them. we will start with you because you got up real fast. >> thank you very much. i write for "insight u.s. trade." you have been clear in calling for the free-trade agreement come forward from the white house and be submitted to congress. given the current atmosphere in congress right now, what makes you think that they can work together on that issue specifically? >> i think this is very clear there is a commitment to work together on the trade agreements. there looking at the numbers fading away. they held them off -- agreement by both parties, while they were trying to avoid a debt default. everybody agreed as soon as we

come back in september, we're going to send them out. it is not only trade agreements, but it is trade adjustment assistance. they have to figure out the sequence of voting. i think everybody is ready to do it. if they do not do, not only will we lose a lot of jobs, not only will we lose our position of some responsibility in the americas, but we will lose the position in the world and it would be a very sad day ever walked away from these deals. others will step into our place. they already are. the eu's business with korea went up 13% in the first 17 days after they signed an agreement, and we have got to get in this deal. >> he said all the details still have not been worked out. is there reason that you're confident they will? >> yes, it is only a sequence deal. look, dear urgency on this deal

when they all agreed to wait until they came back in september. today is very significant. we're losing jobs every day. we've got to get off our butt and it did this deal. i will take just a couple more. go over there. blue shirt. and i will keep going this way. >> to is presented -- i am from bloomberg news. at this point, who is presenting the greatest resistance to a tax holiday? our companies divided as to whether a tax holiday would be something -- >> i have not heard a lot of discussion on it. it is mentioned from time to time. i do not see a lot of resistance. we are saying, look, if you do this, you will put a lot of money in play. you put a lot of money in play, and it does not have to govern the government. they claim that last time they give out the evidence, and it did not start new jobs.

what do you think people did with the evidence? they went to the store. they bought a car. they pushed the economy. i do not want to get in that argument. we just say this is one of the things you can do. you can do it by the stroke of a couple of pins. people might find it useful. right here. >> hello. you said that about $250 billion is waiting to be invested in infrastructure from private firms and public spending is not the answer. >> no, i did not say that. i think the public spending that we get money from the user fees should not because. all three -- should not be cut. all three of those bills are languishing. there are short-term issues. they did not get the six-year bill. those in the state and local communities, they're not going to put their money up when they do not know whether the government will be in for three

months or forever. that is part of the federal money has to go. we support and infrastructure bank. i do not care how you do it, but there's lots of private money there. people have found investing in infrastructure is a good idea, but they will not do it until they know there are programs there. >> regarding an infrastructure bank, d.c. much chance for support from that in the republicans in congress? >> i think it could be done if we did the other stuff. if there is movement. and everybody saw this was going to create a lot of jobs. this does not require a good deal of federal money, if any. i cannot do a lot of these, because these guys have got to do their thing. >> american city business journals. in order to get a highway bill

that is a sufficient size, do you think the gasoline tax needs to be increased or is there another way to get the revenue that is needed -- >> there is the current highway bill, which some people in congress want to cut back 30%. that is categorically a stupid idea. there are some people that think we could reduce sufficiently with the amount of money we are now spending. that would keep a lot of people employed. it might give us a chance if it were long-term bill to attract some private equity. my own view is before this is over, you know, i do not know when, it has been 18 years since we increased the federal fuel tax, and i would simply say we're getting more mpg now than we did then. that means we're doing less with the money we have.

as they can make your own conclusions about that. thank you very much. you are going to really enjoy this. if anybody wants to track us down later for another question, we will be around. thank you. it is all yours. thank you. >> ok, thank you all very much. i think i will go first and in some groundwork on the economy. and then randy is going to finish up with some of the issues specifically in the labor markets. it really get the economy today, we see an economy that has, based on the most recent data, gone through a much steeper downturn and come out of it in a much more rapid fashion than we had originally thought. some interesting -- you can draw some interesting conclusions from that. one is that perhaps this stimulus bill actually might

have had a little bit more impact than people thought. what you see is an economy that in the first year or so grew at about 3.3%. and as the stimulus package waned and expired, he saw the economy drift down a little bit. part of the most recent downturn in the first part of this year was due to natural disasters, floods in the midwest, earthquakes in japan, the nuclear meltdown, and a spike in oil prices, all of which have run their course and are now starting to pass behind us. it gives us a little hope of going down the road that we can worry accelerate in the second half of this year, back up to a 2.5% rate of growth. the problem in the long run and

a problem for jobs, you know, the labor day discussion, is that that growth assembly is not fast enough. when you look at an economy, and this shows the economy relative to its long run potential, you see that the economy drops below the potential during the economic downturns. and then it comes back. and generally comes back fairly quickly. even back in 1974, 1925, and 1982 where we had long lived economic downturns that were relatively steep by historical standards, we still got back fairly quickly. we did, because we grew very quickly. the recession's end the recovery since 1991, even though they were, in many cases, more mild recessions, the 1991 and 2001 recessions were really quite mild, we did not get back very quickly. we did not grow very quickly. and this goes back at least 60

years. kennedy asked his then chief economist or a chairman of the council of economic advisers to explore this, and he coined the term were elected the relationship, which later came to be called oakland's law, the relationship between growth and unemployment, how quickly have to grow to get unemployment back. in this is, you had to grow about 3% to get a 1% drop in the unemployment rate. we have every estimated those relationships over the years, and it looks now that it is about a two-to-one ratio. what it means is if you want to get back to your potential rate of growth, you want to get back to your long run unemployment rates, you have got to grow above your potential rate of gdp. we have to grow at about 5% for two to three years to get the unemployment down from 9% to 6% level or 5.5% level that most economists believe is our full employment level.

nothing is new here. i hear again and again about the disposition between growth and jobs because there is no dissociation between growth and jobs. the problem is we do not have enough growth. when you do not grow at or above your long run rate -- potential rate of growth, you do not create jobs. and a little chart that would put together and updated with the most recent data shows that coming out of the downturns prior to 1982, we grew very, very rapidly in the first year and even in the first two years, well above our long run potential rate of growth. and we put people back to work fairly quickly. but in the most recent recessions and recoveries, we grew much more weakly. so in the first year of this most recent one, we grew barely 3%, just a little over. if you look at the first two

years, we're down about 2.5% rate of growth, which is just about our long run rate of potential gdp growth. the way we define these measures, are long run potential, or the non- accelerating inflationary rate of unemployment is to look at how fast the economy could grow and employ all the new entrants in the work force. that is kind of your potential. that is estimated that to be 2 somewhere to.5%. if we grow if2.5%, you create enough jobs to employ all the new entrants. maybe a million or 1.2 million a year. you grow faster than that. you start to make up the flack that you created during the downturn. you grow slower than that, you create more slack. ok, so you're going to ask me later on, what is your forecast for friday on the jobs number, and it is like 75,000.

there was that, why that? 75,000 tons 12 generates 907,000, and that is about the new entrance to the work force. if you grow it about your long run potential, which estimate to be somewhere around 2.5%, then the numbers all kind of fit. i realize that is not real time, but that is the way most people really do forecasting. you can build a 300-equation model to tell you what i just did in a couple sentences, but you will not get much more in a way of accuracy from that than you love for my kind of back of the envelope straight line ruler approach. we're not growing fast enough. we have got to get the economy growing faster if we want to create the jobs. when you look to the components of the economy holding us back, 70% of our economy is consumption. we're not seeing a lot of it. consumption is not something of that is hard to explain. it is one of the few things in economics or we have actually

put together mathematical functional relationships that do pretty darn well, not only explaining what was in the past but what it should be in the future. the two biggest components in those equations are always income and wealth. if you look at this graph, you see that in time has come back a little bit. we're generating income. not creating a lot of jobs. there's some real wage growth. we're also doing it with tax cuts and released -- reduced taxes and a payroll tax which contribute to disposable income and drive consumption. it derives about 65 cents of spending. the other big component as well but that is where the shortfall is. we lost $14 trillion worth of wealth from peak to trough. we made it may be a dollars trillion of the back, the stock market moseley. the other big asset on most people's balance sheet, their home, has not contributed. when we look at housing and i look at housing, housing is

really two questions. one is, how many people work in housing, how much income with you generate from building and selling more homes? the other factor is when you get the housing market settled out and you underpin those housing prices and start to see price appreciation again, you start to get this wealth number. that is the more profound impact of housing on the economy today. it is not just at the margin, would you can do with building more homes are putting in more appliances and all that, which is important. this is fundamentally important. that affects 12% of the economy or so. this affects 70% of the economy. we have lost a ton of net worth, and where we have to make that back is in the assets where we lost it. there's no other asset that is going to step up and take over for the house, the home, and the average american's portfolio. 68% of americans, 67% own their own homes.

in most cases, they have seen the value of those homes decline, some cases precipitously. that is where we have to see improvement. unfortunately, that is a hard market to fix when you have got imbedded losses in the home but you have millions of people that have homes were the mortgages valued higher than at the underlying home, in negative equity situation. negative a good the situations are almost impossible to address without somebody taking a loss. either the government has to take a loss to make good on these things, in which case we get to the deficit significantly or the individuals that hold those loans in the banking system, which will take a loss. nobody is anxious to take a loss of a celebrity tracks their feet. nobody wants to throw people out of their homes and go to the expense of foreclosure process is and then have to turn around and hold the property on your books at a very depressed value. that has a negative impact on

capital. you've you can keep the people in the homes and talk the value of a little bit, then the ultimate loss is usually less. everybody drives their feet. when you drag your feet on this thing, you do not get the market saddling. when the market does not settle, it does not come back. when you look to the various markets around the country and see where that has actually worked out, and the places where there was not a lot of overbuilding and not a lot of over capacity, we have seen house prices firm. upper midwest, places like that. but in the areas where there's a lot of overbuilding and a lot of current vacant homes for sale, that is where your prices are most depressed, places like las vegas, to a lesser extent southern california, the phoenix area, around atlanta, and down into southern florida, those places that were highly speculative. it is going to take some time. the economy will not get back to above potential performance,

consistently above potential performance until we see that housing market bottomed out and start to come back. i think that is the key. unfortunately, there is not a lot of policy that can be devoted for that does not get expensive and at the same time pick a lot of winners and losers. because the people who have stayed in and continuing to make their payments on their homes, even though in some cases they have negative equity, two such people are my son and daughter- in-law that live in a detroit. they continue to make those payments. they view them as rental payments now, because there's no capital appreciation there. but it is unfair to people like that to sit there and turn around and say that the guy across the street quit paying his mortgage to year and a half ago, so we will step in and make it on this negative equity. it is a very difficult problem to address and a very expensive one. in the end, it is one that the market will have to sort through

and will sort through overtime. we have seen net short sales are up. more of those are taking place. we have seen that the for closure numbers are continuing to gradually ease the way at this sector of the market that is still not performing and is making headway. we're not building any more new homes. so we're working that supply back in. it has taken a long time. it is one of the reasons that the economy has underperformed. investment -- you know, we saw a couple investment incentives. they work great. they rob peter to pay paul. they do not really generate net new investment. if you have a long-term policy, long-term tax policy that decreases the cost of capital and increases the rate of return on investment, then you will see some fundamental changes in long-term investment. just providing a temporary tax credit, it means that from next month into this month or next quarter into this quarter.

that is what happened. we saw a big spurt in investments. businesses produce, hire people, buy more equipment to meet the demand. this time, we had virtually no demand who were able to trick everybody into investing up front. however, those policies have a tendency to run their course and without any demand behind them to keep businesses investing. the investment spurts, and in the biblical sense, it is like the seed that spreads on the barren ground and spread the quickly and then dies. we still expect to see 8% to 10% rate of growth in this area. it will not be a driver that pulls out of the economy. this is about 10% of the economy. generally speaking, this kicks in in the middle of the cycle to give you a chance to get towards

the end. it is not something you can depend upon to drive the cycle. we look at the trade side. with the dollar very weak, he talked about terrorism. it is a great time to come to the net it states with the dollar this week, not a great time it you want to visit europe. the terms of trade have shifted in our favor, continuing to shift in our favor, and are helping to make our goods more competitive over time. so it is a shame that when you look at the trade agreements and the like sitting on the table, we're not doing that. with our weak dollar, now's the time you can really make an impact. you have the terms of trade, the pricing mechanism working in your favor. and have this artificial obstacle into selling and penetrating those markets. this is when you want to get in there, because this is a time when you have a leg up. and we're kind of squandering a great opportunity not to take advantage of these weaker dollars in our ability to trade around the world.

the other thing is that growth around the world -- you know, in order to drive an economy with trade, especially large economy like ours, you need the terms of trade in your favor. you need a competitive advantage. you also need growth abroad. the areas where you have seen growth some areas like china and india, are not places where we have large penetrations of exports. we export more to western europe. we export more to canada and mexico. those areas who are not doing terribly bad are not the primary areas of growth around the world. if we did penetrate the chinese market to a greater extent, india, these would provide growing markets for us to sell into, rather than some of the other markets, which are not stagnating but are much more steady and the rates of growth have been steadier. now we're seeing issues in europe with the european debt situation that is slowing the

growth in europe and providing a less of the potential to sell into. trade is helping, but it is not going to be the great driver. it is much more neutral as elected the components of the forecast. consumption, 70% of the economy. we expected to get back to around 2%, giving about 1.4% growth in gdp points. you're picking up 10% growth or so in investment activities and of the economy, see a pick up of about one gdp point there. trades awash commissary looking at 2.5% as kind of what you can achieve in your growth. that is under the base forecast. the work of some of the more marginal issues to drive it up a little bit more down a little bit. that is why do not see growth getting back up much back2.25%. where you going to get it from? when housing comes back a little

bit more, you'll see consumption come back a little bit more. will it consumption of 23% or 3.5%. gives you a much better underpinning to build on. business inventories are low. you'll see businesses invest more. that will give you more out of the investment side. that is how you can build your forecast. it is in its and pieces. right now, what we are seeing is very tepid growth all across the front. what does that mean for the labor markets? we lost 8.5 million jobs during the downturn. we put back 1.5 million. so we still have, you know, 6.7 million in terms of jobs. you have got a situation where the marginally attached workers, some more in the neighborhood of 2.5 million. that number would normally be 1.2 million. you'll get the part-time for economic reasons. they want a full-time job but there are not full-time jobs other. that number is 8.5. that is down from 9.5.

that is good thing. but 8.5 is four million higher than normal. you need about 13 million jobs to replace what you lost and get back to where you are. then you add 1 million every year. so the next 10 years, you have another 10 million jobs. that is where you suddenly get to the numbers that tom was talking about over the next 10 years. we have never grown fast enough to create 2.5 million jobs per year. it is probably the case at this time around, we're not going to be a broader 10 or 12 years straight and generate those kind of jobs this time around the there. so it is important to make hay while we can. the economy is just not growing fast enough to generate these jobs. if you focus on creating jobs but not creating growth, you're not going to be successful. it just does not work that way. you can create growth without jobs, because the productivity.

but you cannot create jobs without growth, because the growth has that to be fast enough to outstrip the productivity improvements. so that the businesses cannot meet their demands, just with productivity increases. therefore, they have to hire. that is what drives the hiring process. when business is going to hire, when they do not meet demand. the productivity numbers are going up, even while the gdp numbers are going down. that is what we need. it is going to take some time, because as i said come at that 2.5% growth, you generate a million jobs per year, which just provides enough for the new entrants. you have something in the neighborhood of 13 million that you have to work off. we need about 2.5 million to 3

million the year for four to five years to get the process going. if that is not -- that does not get you back to where you are, but it's way ahead of you are right now. we're not doing even that. i am going to stop their, because i wanted to vote is on the short run in the labor markets. we have some longer run issues that are out there. we have a deficit and debt problem that the congress is going to be focusing on over the next couple of months, hopefully. and hopefully we will be productive in coming to some sort of irresolution on how to begin to address that problem. we also have a situation with the fed and the monetary policy issues. we have heard recently from mr. bernanke and the like, and the question is, are we going to get qe2? nothing we will, and i do not think it will matter. when you get it, it was focused on helping the banking system

and shoring up the stock market but had very little impact on overall gdp growth, and on the money supply, by the way. people worry that the fed's policy is going to be inflationary, but it cannot be if it does not affect the money supply. the effect on the reserve position that was most primarily affected was the excess reserve position. what asked me -- what that means is the banks sell these things as idle cash reserves and did not put them into london did not put them into money supply increases. therefore, it will not be inflationary, but it did not help gdp growth of the month. i do not think the fed is going to continue to do that, because their intent, qe2 quit to shore up the banking system. i think it was a successful approach. i think the kind of let everybody said there blissfully ignorant, because what they were doing was really quite fine the banking system and providing this system with a ready supply of profits, because they paid a positive margin on the

borrowing versus rumored -- reserve spreads. and that pumped capital by way of retained earnings into the banking system. i do not think they're going to do it again, because i do not think the banking system needs the help. it is the economy that needs the help now, but they're going to try to figure out ways to get the banks to lend out more of this excess reserves, which will have an impact. but i think they will be fairly judicious. i do not think it will be a major driver of gdp growth for the next year or year and a half. i will stop there and turn it over to randy. thank you. >> thank you. i would like to direct you to the material in your press packet, which is an overview of sorts of our activities in the health-care and pension areas. but it is a long list of regulations in the pipeline that the chamber is working on.

this is a little too complicated to drill down in great detail. he provided a macro overview. and i look at the micro focus of the workplace. i think there's a story to tell what facts and figures, but also because the unions use labor day to not just about their agenda but also has an opportunity to go after employers. i want to direct your attention to the fact sheet. it is tough times for employees, those who lost their jobs obviously, but employers also. employers are providing american something close to -- to close the 170 min