possible should carry equal weight. we will be taking action to restore fair representation in the house of commons, including protecting the canadian constitutionally recognized representation. we will pursue what is fair and principled. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> in a few minutes, president obama on the deficit, and after that, timothy geithner and jack lew. but partisanship and a time of divided government. and later, a look at what congressional republicans are planning for the economy and jobs. >> william jennings bryant, one of the best known speakers of this time and the first to campaign from the backs of will word cars.

he ran for president three times but lost. he changed political history. he is featured in the c-span's series "contenders," from lincoln, neb., friday at 8:00 p.m. eastern. learn more at c-span.org/the contenders. >> to cut the deficit, president obama is calling for $1.50 trillion in new taxes as part of a $3 trillion deficit- reduction package. speaking at the white house, he said he would veto plans that would cut benefits but did not raise taxes on the wealthy. this is about 20 minutes. >> good morning, everybody. please have a seat.

a week ago today, i sent congress the american jobs act. it is a plan that will lead to new jobs for teachers, for construction workers, for veterans, and for the unemployed. it will cut taxes for every small business owner and virtually every working man and woman in america. and the proposals in this jobs bill are the kinds that have been supported by democrats and republicans in the past. so there should not be any reason for congress to drag its feet. they should pass it right away. i am ready to sign a bill. i have got the pens all ready. now, as i said before, congress should pass this bill knowing that every proposal is fully paid for. the american jobs act will not add to our nation's debt. and today, i am releasing a plan that details how to pay for the jobs bill while also paying down our debt over time. and this is important, because

the health of our economy depends in part on what we do right now to create the conditions where businesses can hire and middle-class families can feel a basic measure of economic security. but in the long run, our prosperity also depends on our ability to pay down the massive debt we have accumulated over the past decade in a way that allows us to meet our responsibilities to each other and to the future. during this past decade, profligate spending in washington, tax cuts for multi- millionaires and billionaires, the cost of two wars, and the recession turned a record surplus into a yawning deficit, and that left us with a big pile of iou's. if we do not act, that burden will ultimately fall on our children's shoulders. if we do not act, the growing debt will eventually crowd out everything else, preventing us from investing in things like education, or sustaining

programs like medicare. so washington has to live within its means. the government has to do what families across this country have been doing for years. we have to cut what we cannot afford to pay for what really matters. we need to invest in what will promote hiring and economic growth now while still providing the confidence that will come with a plan that reduces our deficits over the long-term. these principles were at the heart of the deficit framework that i put forward in april. it was an approach to shrink the deficit as a share of the economy, but not to do so so abruptly with spending cuts that would hamper growth or prevent us from helping small businesses and middle-class families get back on their feet. it was an approach that said we need to go through the budget line-by-line looking for waste, without shortchanging education and basic scientific research

and road construction, because those things are essential to our future. and it was an approach that said we should not balance the budget on the backs of the poor and the middle class. that for us to solve this problem, everybody, including the wealthiest americans and biggest corporations, have to pay their fair share. now, during the debt ceiling debate, i had hoped to negotiate a compromise with the speaker of the house that fulfilled these principles and achieved the $4 trillion in deficit reduction that leaders in both parties have agreed we need -- a grand bargain that would have strengthened our economy, instead of weakened it. unfortunately, the speaker walked away from a balanced package. what we agreed to instead wasn't all that grand. but it was a start -- roughly $1 trillion in cuts to domestic spending and defense spending. everyone knows we have to do more, and a special joint

committee of congress is assigned to find more deficit reduction. so, today, i am laying out a set of specific proposals to finish what we started this summer -- proposals that live up to the principles i have talked about from the beginning. it is a plan that reduces our debt by more than $4 trillion, and achieves these savings in a way that is fair -- by asking everybody to do their part so that no one has to bear too much of the burden on their own. all told, this plan cuts $2 in spending for every $1 in new revenues. in addition to the $1 trillion in spending that we have already cut from the budget, our plan makes additional spending cuts that need to happen if we are to solve this problem. we reform agricultural subsidies -- subsidies that a lot of times pay large farms for crops that they do not grow.

we make modest adjustments to federal retirement programs. we reduce by tens of billions of dollars the tax money that goes to fannie mae and freddie mac. we also ask the largest financial firms -- companies saved by tax dollars during the financial crisis -- to repay the american people for every dime that we spent. and we save an additional $1 trillion as we end the wars in iraq and afghanistan. these savings are not only counted as part of our plan, but as part of the budget plan that nearly every republican on the house voted for. finally, this plan includes structural reforms to reduce the cost of health care in programs like medicare and medicaid. keep in mind we have already included a number of reforms in the health care law, which will go a long way towards controlling these costs. but we are going to have to do a little more. this plan reduces wasteful subsidies and erroneous payments while changing some incentives that often lead to excessive health care costs.

it makes prescriptions more affordable through faster approval of generic drugs. we will work with governors to make medicaid more efficient and more accountable. and we will change the way we pay for health care. instead of just paying for procedures, providers will be paid more when they improve results -- and such steps will save money and improve care. these changes are phased in slowly to strengthen medicare and medicaid over time. because while we do need to reduce health care costs, i am not going to allow that to be an excuse for turning medicare into a voucher program that leaves seniors at the mercy of the insurance industry. and i am not going to stand for balancing the budget by denying or reducing health care for poor children or those with disabilities. so we will reform medicare and medicaid, but we will not abandon the fundamental commitment that this country has kept for generations. and by the way, that includes our commitment to social

security. i have said before, social security is not the primary cause of our deficits, but it does face long-term challenges as our country grows older. and both parties are going to need to work together on a separate track to strengthen social security for our children and our grandchildren. so this is how we can reduce spending: by scouring the budget for every dime of waste and inefficiency, by reforming government spending, and by making modest adjustments to medicare and medicaid. but all these reductions in spending, by themselves, will not solve our fiscal problems. we cannot just cut our way out of this hole. it is going to take a balanced approach. if we are going to make spending cuts -- many of which we wouldn't make if we were not facing such large budget deficits -- then it is only right that we ask everyone to pay their fair share. you know, last week, speaker of the house john boehner gave a

speech about the economy. and to his credit, he made the point that we cannot afford the kind of politics that says it is "my way or the highway." i was encouraged by that. here's the problem: in that same speech, he also came out against any plan to cut the deficit that includes any additional revenues whatsoever. he said -- i am quoting him -- there is "only one option." and that option and only option relies entirely on cuts. that means slashing education, surrendering the research necessary to keep america's technological edge in the 21st century, and allowing our critical public assets like highways and bridges and airports to get worse. it would cripple our competiveness and our ability to win the jobs of the future. and it would also mean asking

sacrifice of seniors and the middle class and the poor, while asking nothing of the wealthiest americans and biggest corporations. so the speaker says we cannot have it "my way or the highway," and then basically says, "my way -- or the highway." [laughter] that is not smart. it is not right. if we are going to meet our responsibilities, we have to do it together. now, i am proposing real, serious cuts in spending. when you include the $1 trillion in cuts i have already signed into law, these would be among the biggest cuts in spending in our history. but they've got to be part of a larger plan that is balanced -- a plan that asks the most fortunate among us to pay their fair share, just like everybody else. and that is why this plan eliminates tax loopholes that primarily go to the wealthiest taxpayers and biggest corporations -- tax breaks that

small businesses and middle- class families do not get. and if tax reform doesn't get done, this plan asks the wealthiest americans to go back to paying the same rates that they paid during the 1990s, before the bush tax cuts. i promise it is not because anybody looks forward to the prospects of raising taxes or paying more taxes. i do not. in fact, i have cut taxes for the middle class and for small businesses, and through the american jobs act, we would cut taxes again to promote hiring and put more money into the pockets of people. but we cannot afford these special lower rates for the wealthy -- rates, by the way, that were meant to be temporary. back when these first -- these tax cuts, back in 2001, 2003, were being talked about, they were talked about temporary measures. we cannot afford them when we

are running these big deficits. now, i am also ready to work with democrats and republicans to reform our entire tax code, to get rid of the decades of accumulated loopholes, special interest carve-outs, and other tax expenditures that stack the deck against small business owners and ordinary families who cannot afford washington lobbyists or fancy accountants. our tax code is more than 10,000 pages long. if you stack up all the volumes, they are almost five feet tall. that means that how much you pay often depends less on what you make and more on how well you can game the system, and that is especially true of the corporate tax code. we have got one of the highest corporate tax rates in the world, but it is riddled with exceptions and special interest loopholes. so some companies get out paying a lot of taxes, while the rest of them end up having to foot the bill. and this makes our entire economy less competitive and our country a less desirable place to do business. that has to change. our tax code should not give an

advantage to companies with the best-connected lobbyists. it should give an advantage to companies that invest in the united states of america and create jobs in the united states of america. and we can lower the corporate rate if we get rid of all these special deals. so i am ready, i am eager, to work with democrats and republicans to reform the tax code to make it simpler, make it fairer, and make america more competitive. but any reform plan will have to raise revenue to help close our deficit. that has to be part of the formula. and any reform should follow another simple principle: middle-class families should not pay higher taxes than millionaires and billionaires. that is pretty straightforward. it is hard to argue against that. warren buffett's secretary should not pay a higher tax

rate than warren buffett. there is no justification for it. it is wrong that in the united states of america, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million. anybody who says we cannot change the tax code to correct that, anyone who has signed some pledge to protect every single tax loophole so long as they live, they should be called out. they should have to defend that unfairness -- explain why somebody who's making $50 million a year in the financial markets should be paying 15% on their taxes, when

teacher making $50,000 a year is paying more than that -- paying a higher rate. they ought to have to answer for it. and if they are pledged to keep that kind of unfairness in place, they should remember, the last time i checked the only pledge that really matters is the pledge we take to uphold the constitution. now, we are already hearing the usual defenders of these kinds of loopholes saying this is just "class warfare." i reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or a teacher is class warfare. i think it is just the right the thing to do. i believe the american middle class, who've been pressured relentlessly for decades, believe it is time that they were fought for as hard as the lobbyists and some lawmakers have fought to protect special treatment for billionaires and big corporations. nobody wants to punish success in america. what is great about this country is our belief that anyone can make it and everybody should be able to try -- the idea that any one of us can open

a business or have an idea and make us millionaires or billionaires. this is the land of opportunity. that is great. all i am saying is that those who have done well, including me, should pay our fair share in taxes to contribute to the nation that made our success possible. we should not get a better deal than ordinary families get. and i think most wealthy americans would agree if they knew this would help us grow the economy and deal with the debt that threatens our future. it comes down to this: we have to prioritize. both parties agree that we need to reduce the deficit by the same amount -- by $4 trillion.

so what choices are we going to make to reach that goal? either we ask the wealthiest americans to pay their fair share in taxes, or we are going to have to ask seniors to pay more for medicare. we cannot afford to do both. either we gut education and medical research, or we have got to reform the tax code so that the most profitable corporations have to give up tax loopholes that other companies do not get. we cannot afford to do both. this is not class warfare. it is math. [laughter] the money is going to have to come from someplace. and if we are not willing to ask those who've done extraordinarily well to help america close the deficit and we are trying to reach that same target of $4 trillion, then the logic, the math says everybody else has to do a whole lot more. we have got to put the entire burden on the middle class and the poor.

we have got to scale back on the investments that have always helped our economy grow. we have got to settle for second-rate roads and second- rate bridges and second-rate airports, and schools that are crumbling. that is unacceptable to me. that is unacceptable to the american people. and it will not happen on my watch. i will not support -- i will not support -- any plan that puts all the burden for closing our deficit on ordinary americans. and i will veto any bill that changes benefits for those who rely on medicare but does not raise serious revenues by asking the wealthiest americans or biggest corporations to pay their fair share. we are not going to have a one- sided deal that hurts the folks

who are most vulnerable. look, none of the changes i am proposing are easy or politically convenient. it is always more popular to promise the moon and leave the bill for after the next election or the election after that. that is been true since our founding. george washington grappled with this problem. he said, "towards the payment of debts, there must be revenue. that to have revenue there must be taxes. and no taxes can be devised which are not more or less inconvenient and unpleasant." he understood that dealing with the debt is -- these are his words -- "always a choice of difficulties." but he also knew that public servants were not elected to do what was easy. they were not elected to do what was politically advantageous.

it is our responsibility to put country before party. it is our responsibility to do what is right for the future. and that is what this debate is about. it is not about numbers on a ledger. it is not about figures on a spreadsheet. it is about the economic future of this country, and it is about whether we will do what it takes to create jobs and growth and opportunity while facing up to the legacy of debt that threatens everything we have built over generations. and it is also about fairness. it is about whether we are, in fact, in this together, and we are looking out for one another. we know what is right. it is time to do what is right. thank you very much. [applause.] thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

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♪ >> details of the president's plan to cut the deficit were outlined by treasury secretary tim geithner and budget director jack lew, who spoke for about one hour at the white house. >> you guys can come in. yes. give people a minute to get up here. good morning, ladies and gentlemen. thanks for coming to the white house for your daily briefing. as you were told in advance, i have with me today the secretary of the treasury, timothy geithner, on my right, and on my left, the office director of budget, jacked -- jack lew.

i know you just heard the president speak on the deficit reduction, and jack and tim are here. if you can keep on top with them, i will be back to answer your questions. do you want to start? >> thank you. can you explain why -- -- >> republicans and democrats agree that we have a long-term deficit problem, and we have to bring that down to earth. we all agree on the basic magnitude of the cuts, roughly $4 trillion over 10 years. that is what we need to do to bring the levels down that we can sustain over time, to where the level of the debt as a share of the economy is no longer growing and starts to come down. the debate we are having is how

to best do that. what the president laid out was reforms on all parts of government, combined with some modest reforms for our taxes to make our country more competitive and make sure the most fortunate americans are paying a greater share of their income in taxes, but this is about a choice, how to make the economy stronger in the future, how to make sure we are living within our means and still able to work with the economy in the short run but also preserve room for investment in the long term, and to do that, you have to figure out a way to reform our tax system to make it more competitive and more fair. that is why we are proposing these changes. we did a good economic policy, and we think they're better than the alternatives. >> could you explain more about how the warren buffett rule would work?

the president talked about it in the rose garden, but there were none of the details spelled out, and it seems like an important part of the plan that he is looking to emphasize. >> what the president is looking to do is to work with the individual and corporate tax system, so, again, we are not just making our country more competitive and strengthening investment, but we are asking the most fortunate americans to pay a larger share of their income in taxes. the basic principle at the heart of the warren buffett principle is if you are among those fortunate few in the united states, we should make sure that you pay as a shared in, -- as a shared about what others pay. -- as a shared amount. there are different ways to do that, but we believe it should be the basic foundation of tax reform, and we are going to

fight to make sure that is part of what congress considers and also delivers. >> a specific recommendation on that though. you spelled out how much revenue you want to raise overall. >> in some ways, you can say we are having a debate about whether you should try to reform the overall system to meet the basic principles. if we are trying to get more revenue out of the current system, i think the best system is to try to reform the overall system so that we are bringing rates down where we can, eliminate all of the wasteful subsidy and preferences, helping to contribute to reductions but making the economy more competitive in the long run, and, again, we're going to make this more fair, and i think that

is the best way to go. i think that is better than the alternatives. >> is there political will there, and how worried are you that this will spill over to the economy, since the economy is already very fragile? >> europe is under pressure and has faced a lot of challenges, and it is affecting us here and around the world, not just in europe, and we have a huge stake in helping us deal with this. we have a huge financial stake, and it is not in the interests of the united states for europe to be weakened by a protracted economic crisis. you asked the question, "is their political will t -- is there political will there?"

i think there is, and the leaders are trying to reassure the well -- world. it is in the interest of the united states for them to do that. >> jack, a question for you. the expiring bush tax cuts, for the wealthy, $800 billion, what about the cost of not letting the rest of the tax cuts expire. >> we have now projected what the deficit and the debt is to have this continue. this will give the opportunity to back the tax cuts to continue, and this would bring

our deficit down to below two's, and it would keep the debt as a percentage of gdp in the 70's, as opposed >> so it's factored in there? >> yes, it is factored in. >> secretary geithner, a couple of questions. one, are you maintaining that $1.5 trillion in tax increases, all of which would be in the top two tax brackets, as i understand it, would have no adverse impact on job creation? >> again, our proposal is, through a comprehensive tax reform, individual and make the current tax system of the united states better for investment, better for growth and more fair to average americans. and if congress were to meet those basic principles he laid out, then i'm very confident that the modest changes we're suggesting in terms of revenues

would make the economy stronger in the long term, not weaker in the long term. obviously, you want to do it carefully and that's why the president laid out those specific principles. it is very important that we find a way to get congress to make this tax system better for growth, better for the united states. wes of ways to do that, but want to meet that basic task. we're a very large economy and we're talking about estimates over 10 years and $1.5 trillion in revenues relative to what would happen if you extend the bush tax cuts is roughly 1% of the entire output of the american economy over that period of time. it is a modest change in revenues and if you do it sincibly through tax reform, the strength of investment you'll make growth in the united states stronger, people more confident in the future and more likely to invest here and that's something we should all be working towards. >> i want to ask one other question as i want to give you an opportunity, there's a big splashy book out this week called "confidence men" which

portrays you as a cagey political operator. i know you'll take exception to the portrayal. >> cagey political operative? >> those might be my words. >> what my mother would say. >> but there is a memo written in 2010 by white house senior adviser pete rouse that talks about a number of efforts by, in his view, the economic team here in the white house to kind of -- per the president's orders but it does say that once the decision is made, implementation by the department of the treasury and that adversely effects execution of the policy process. >> i disagree with that characterization. i haven't read the book, but to borrow a phrase, i live the reality. and the reports i've read about this book bear no resemblance to

the reality we live together, no resemblance. >> specifically, though, mr. secretary, did you -- on the president's efforts to -- >> absolutely not and i would never do that. i spent my life in public service. my great privilege to serve this president and i would never contemplate doing that but again, i live the original and the reality i lived, we all lived together, bears no relation to the sad little stories i heard reported from that book. >> on the deficit plan, do you -- specifically the president's been talking about everyone paying their fair share. but when you're counting over a trillion dollars in war savings and the president's policies said he wasn't going to keep troops beyond those time periods anyway so he was never going to spend that money on the war, you wall off security, you don't have major structural changes to medicare but you're raising

taxes on the rich, where's the pain here in this budget? where's the real pain and sacrifice the president is calling for when you're walling off all these things? >> if you look at the details of what's in the plan that the president sent to the congress is a lot of, there pain and it's spread broadly and we think fairly. start with the issue that you led with in terms of the spending on wars in afghanistan and iraq. there is no doubt that those are going to be savings when presented to congress, the republican budget and the house took account of them. at a time when we enacted spending caps that apply to defense and non-defense spending, this is locking the back door and making very real that we're on a downward trajectory and in august the president signed into law spending caps to bring spending to the lowest level they've been since president "newshour" -- eisenhower was president. on the question of no structural

change, i think if you look at the details that are in here, there's very real structural change and very meaningful savings in many areas. in healthcare, there are serious changes that affect both what we pay to providers and in terms of the structure of benefits and the incentives for savings in the long term. while we did not raise the retirement age, i would note that raising the retirement age is not something that actually reduces costs. it just determines whether or not the government is going to pay them. there are a number of provisions in here that will mean beneficiaries will have a different set of incentives. right now, if you're on medicare and you take a medigap policy to protect you from first dollar coverage, the extra costs that come from that is distributed through the system. we're saying it ought to be built into the premium you pay. we have extra deductibles phased in, co-payments on post-accuse care, home care services.

this is serious stuff, it's not the kind of stuff you would choose to do if you weren't tightening your belt but we say it's not going to affect people that are currently retired, it will affect new retirees and take effect after 2017. you look over 20 years, very substantial savings. if you look outside the healthcare, there is a host of savings, whether it's in farm programs or in federal employee retirement or in health benefits that military retirees get, these, in a normal budget environment, would be considered $257 billion of pain so i urge you to look at the details. what the president did do, he put a plan that's balanced that he says we shouldn't ask unfairly those who are retired to pay the burden. we shouldn't ask unfairly either farmers or federal workers, we should ask everyone to have shared sacrifice and the tax piece is part of that. >> following up, talking about social security specifically, the president, by his own

admission, has thursday is a program that needs to be looked at. why isn't it part of the package? >> the president put out a plan that would reach the goal of $4 trillion of savings, it would get the deficit into a place where over the 10 years and at the end of the 10 years we'd be at a sustainable level, 2.3% of g.d.p., it gets the debt as a percentage of g.d.p. into a place that's controllable, the low 70's. he put together a plan that accomplishes the goal in the way he thinks is the right, balanced way to do it. over the summer we were in a different context. we were in negotiation where the president made a very, very serious effort to reach agreement on a broad range of issues. when it became clear that there was no willingness on the other side to embrace a balanced side with revenue, we went back to put together a plan that reflects our view of how to do it. the president's made clear over and over, as he did today, that social security is not the

principal driver causing the deficits we're facing. our real challenge in social security is to have a balanced approach that will, without slashing benefits, protect the program as it should be for 75 years. and he remains open to working on a bipartisan basis to do that. so it doesn't belong here but is much a subject for future discussion. >> since you're both here, the president has said that the jobs plan is insurance against going into a double-dip recession. how much concern do you have about doubling back into another recession? >> let me reinforce what the president said, that the jobs plan is very much a part of this proposal. the $447 billion in spending that would go both to reduce the tax burden on working americans and on businesses that make hiring decisions in terms of creating jobs through preventing the layoffs of teachers and firemen and policemen, in terms of the construction that would going on on highways.

that's built into this, it's paid for. all of the deficit reduction we're talking about today is after paying for that. i think it's the prudent thing to do at a when the economy is still not where we want it to be. we're not in a double-dip recession but we're not at a point of the kind of robust recovery we should be at to bring employment to the levels the american people expect and this plan, including the jobs plan, would deal with that. >> would you clarify the veto threat? would he veto any bill that does not have revenue in it? or only if it doesn't affect medicare? >> i think the president's statement speaks very clearly to -- he said he would not support a bill he thinks is unfair and unbalanced and would veto a bill if it cuts benefits people are relying on for medicare without a balanced component in revenue. >> we could end up with a situation where you'd have an end product that doesn't have

revenues in it, as long as it didn't have -- >> i don't want to address hypotheticals. today, the president is sending to congress a balanced, comprehensive plan, that overachieves the goal of the joint committee and gives the joint committee a blueprint to solve a problem to point us in the right direction in terms of fiscal policy and we think congress should do it in a balanced way. >> gentlemen, can you explain whether the rule is another level of a.m.t.? >> the buffett principle is like thinkng -- one way to about it is to say that americans who are fortunate enough to make over $1 million should, as a share of their income, pay a minimum threalve is -- level that is no lower than that paid by an average middle class family. i wouldn't call it what you called it. i call it what i said. but it's a sensible -- why should we -- we're going through

a tough period as a country. we got a lot of challenges ahead. why should you say to the american people that we're going to solve our long-term fiscal problem by adding to the burdens of the middle class or by letting the most fortunate americans pay a smaller share of their income than does an average middle class family. i don't think it makes sense and we think it's good economic policy and we think it's better than the alternate. alternative. if you try to return this country to living within our means, if you try to restore financial soundness to the basic fiscal trajectory of the united states and do so without modest changes in revenues, then you're adding to the burden of people that have already borne so much of the burden of this crisis and a long period of very little growth in median incomes so we think it's a basic, fair

principle and better than the alternatives we've seen. >> are you able to say what the buffett rule tax rate would be? >> no, because it depends on what happens in the shaping of tax reform. it depends on the overall result of the options, the alternatives you look at in tax reform. the president's principles are that you want to lower marginal tax rates, clean up and eliminate all the wasteful subsidy spending in the tax code, had make incentives for investing in the united states stronger so we're more competitive over time, bring the long-term deficits and as part of that, make sure the system is more fair. how you achieve that principle, the buffett principle, depends on the shape of the basic reforms. could you clarify what the president said on bank -- maybe i missed it last night. >> that's a proposal we had in president the's budget back in february and that proposal is

designed to make sure that if there are any losses from the emergency actions we took to put out the financial fires of 2008 and 2009, that we recover those losses in the form of a fee on the institutions that benefited most directly from those programs but that's been a long-standing proposal in our budget. >> that was in the president's budget in february. >> this wouldn't add to revenues but make you whole from t.a.r.p.? >> if congress did not legislate a fee like this, then if we ultimately realize losses in the emergency programs, those would add to the deficit. so by proposing this fee, we try to make sure that doesn't happen and that's a very important principle underscored financial reform from the beginning which is that the largest institutions that benefited the most directly from the financial emergencies

bear the costs of the resolution. >> do you have an estimate of how many millionaires currently pay an effective tax rate that's lower than, say, 28% or a middle class tax rate? >> you'll find the world rich in examples and illustrations about what average effective tax rates are as you go up the income chain but it depends on what your profession is. there's lots of people who make more than $1 million a year is in the form of wages and salaries and they pay tax rates but a lot of people's income expects predominantly in the form of dividends. so it depends on the specific circumstances you face and the averages won't capture that. >> there are special interests

in washington trying to calculate whether there would be better off if there's gridlock. can either of you comment, what would be the risks as the president sees it or the downside looking ahead at that prospect? >> i don't know any serious policymakers on either side of the aisle who think sequestration is a good place to go. it was designed to be something that would have bad consequences wherever you look because it is not a set of policies but across-the-board cut. it would lead to cuts in domestic programs, defense and medicare that are not based on specific policy decisions but just taking a slice off of everything. undoubtedly, there are interests in washington who can figure out what that percentage is and say rather than lose something that isn't adding to the general economic wellbeing, i will oppose, you know, the specific things that hurt me and have this kind of broadly shared pain. i haven't heard republicans or

democrats in positions of authority advocate that. i think that if you look at where we're headed, right now we have a joint committee working towards a target of $1.5 trillion of deficit reduction. i think that is something they see as being their job because the $1.2 trillion of sequestration would be bad. the president is saying today, that's a minimum, but that's not the right end point, that would not get us to a place where the deficit as a percentage of the economy and debt as a percentage of the economy would, in the way we should, address the program problem. what he's putting forward today is a balanced plan. it's going to mean picking and choosing and making choices so we've tried to do it in a way we think is balanced and fair and serious set of policy judgments and is not a mechanical spread pain everywhere even where it shouldn't belong which is what sequestration, by design, does.

>> mr. secretary, what do you think standard & poor's reaction will be to this number in terms of their concern of $4 trillion and the downgrade? >> i don't know. but i would say that if you step back and look at the basic economics or the financial requirements, what we're trying to do, what this proposal does is meet the critical test of restoring financial soundness to the united states of america and it's a detailed list of proposals, it would bring our deficits down as jack said to a level below 3% of g.d.p. which is a level that's sustainable over the long run because it allows the debt burden to stabilize and fall as a share of the economy. it will not solve all the problems facing the country. there are still other things we'll have to deal with as a country but all those things are going to be harder unless we put in place a set of long-term fiscal reforms that allow americans, investors around the world, to know that this political system is able to return to living within our means. so it will meet that critical test for financial prudence, for

financial soundness. >> international political question. the technical question, have you gentlemen estimated how much of a primary you need to handle the problems in the medium term? >> you're raising the economic term. primary surplus is the term that refers to revenues and expenditures being in balance without interest. so it's you're taking in as much as you're paying out except for interest. that's what primary balance refers to and for an economy like the united states, you need to have the deficit below 3% of g.d.p. to achieve that basic test. why is that test important? that's the level that stops the debt from growing as a share of the economy, you bring it below that level, then the debt starts to fall as a share of the economy. why is that important? because if we're not able do that as a country, then growth will be weaker in the future,

we'll have left the ability to meet the basic fundamental needs of the american economy going forward. that's why it's important and that's what the basic structure is. >> you're saying below 3%? >> that's the test for sustainability for the united states. >> the policy question is about the brief. in the overall context in the global situation, in europe, what do you see as the appropriate of all the countries such as the greek, not necessarily just china. >> one of the great strength of the world economy looking forward is the prospects of a longs period of rapid growth the major emerging economies including the ones you referred to, china, india, brazil, russia. we want to see that growth happen over a sustained period of time. we will benefit as a country from the realization of those very optimistic long-term growth

prospects. we'll export more. you'll see more jobs created in the united states and we expect to be major beneficiaries as a country of what we're seeing. we want to see them contribute to global growth and to do so in a way that's more balanced and fair and they're going to face different policy requirements than we in the because they're in different situations but they're a great source of strength for the global economy and the faster they grow in the future, the more we'll benefit as a country and the more balanced the global economy will be. >> just to follow up, any specific policies you would encourage them to take to help the europeans, for example? >> well, i think we all have an interest in a strong, credible resolution of the financial pressures now in europe. it's not just the united states and not just the europeans. the global economy as a whole depends on their being a sensible resolution of those financial pressures and you've seen all the nations of the world through the i.m.f. make

really very substantial contributions to the challenges ongoing in europe and that's just underscoring the stakes we all have in more growth in financial stability in europe. >> christopher, paul. >> if i may, back to the fact that the life we live in now is a borderless global economy and recovery is weak worldwide, is the u.s. coordinating economic policies and regulations with key allies to make sure u.s. businesses are not at a disadvantage in the global marketplace especially when it comes to jobs? >> a basic fundamental tenet of the president's economic strategy for this country is to do things that make us more competitive over the long run, that improve incentives for investing in the united states, make it more likely, not less likely, that the things the world needs are made in this country in the united states of america and that requires not just better education for

americans, it requires investing in innerovation, improving our long-term infrastructure but also requires through things like tax reform changes to the incentives that affect all businesses to make us more competitive as a country so absolutely the basic -- a basic principle that guides the policies that this president evaluates, are they going to make us stronger in the long run as a place for people to build, create and invest. >> last one, paula. >> secretary geithner, you indicated that details for tax reform wouldn't really come out yet, yet there's been an indication in here that you would come forward with a stand-alone corporate tax bill if super committee doesn't enact -- well, agree to anything. so i guess my question, how can you, like, have that happen if there aren't details? and also, does that mean the corporate tax reform white paper won't come out which does have

details and which you said would come out after the results? >> soon, not sure quite when. some time before the end of the year. we will lay out a set of broad on corporate tax reform that meet this test of making us more competitive as a country, strengthening incentives for investing in the united states and we're going to be guided by in terms of strategy is how to make sure we maximize the chances of reform coming on sensible terms but i expect you'll see us lay out relatively soon the detailed proposals you referred to. >> before or after november 23? >> we haven't made that judgment yet. there's a lot of interest in the super committee in looking at this, not just on the super committee but in congress generally and we've been talking actively to all the principal involved but what we're going to be guided by in terms of when and how we advance the specific proposals is what's going to maximize the chances we get something done on terms that we can support, again, that meet

the basic test, which is to make the country stronger over the long term, make sure we're improving incentives for investing in the united states. >> thank you, guys. >> in a few moments, a discussion of bipartisanship in a time of divided government. [captions performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> a couple of live events to tell you about tomorrow morning. at 10:00 eastern, the joint economic committee holds a hearing on the federal debt and the u.s. economy. that's here on c-span.

and on our companion network, c-span3, former white house budget director testified about job creation before the senate budget committee at 9:30 a.m. eastern. >> which part of the u.s. constitution is important to you? that's our question in this year's student cam competition, open to middle and high school students. make a video documentary five to eight minutes long and tell us the part of the constitution that's important to you and why. include more than one point of view and video of c-span programming. entries are due by january 20, 2012. there's $50,000 in total prizes and a grand prize of $5,000. for all the details, go to studentcam.org. >> now, a discussion of the relationship between congress and the administration with former senate majority leader trent lott of mississippi and former senator byron dorgan of north dakota. they were at the washington

center for an hour and a half. the event was moderated by c-span's steve scully. >> the leader series is founded in the spirit of the life-long friendship of two extraordinary leaders from opposite sides of the aisle, allen simpson, a republican from the state of wyoming, and norman mineta, a democrat from california who served first in the house of representatives and then as the secretary of commerce in the clinton administration and subsequently as the secretary of transportation in the bush administration. mineta and simpson met, however, during world war ii when simpson's boy scout troop visited mineta's in wyoming at the hart mountain relocation center where secretary mineta's family was interned with 10,000 other japanese americans. despite their eventual political differences, both their friendship and commitment to leadership and public service

endured. here at the washington center, the simpson-mineta leader series, aims to create a forum in which students from around the country and around the world can engage with extraordinary leaders and explore issues of contemporary public concern. we also hope it will be a meaningful supplement to the civic engagement and leadership development efforts of the students in the academic internship program here at the washington center this semester. to introduce today's event, it's to welcome one other leader, our president, mike smith. [applause] >> thank you very much, alan. it's a pleasure for me to welcome senator dorgan and senator lott to the washington center today. both senators, while partisan during their term in the senate, various terms in the senate, had reputations for reaching across the aisle, working with the

other party, the opposite party, and effecting constructive legislation to help the american people. we're fortunate that steve scully is going to moderate today's discussion. steve is the senior executive producer and political editor for the c-span networks. since 1990, steve has been responsible for the planning and editing of all campaign programming including presidential and congressional elections for the public affairs cable network. steve also serves as one of the regular hosts of the "washington journal," a daily live public affairs program, as well as "newsmakers" and other c-span programs. steve is also a member of the associate faculty here at the washington center where he teaches a course called "the road to the white house." this course is a comprehensive study of american presidential politics in the age of television and the new digital media.

without further ado, steve scully. >> thank you. senator dorgan, senator lott, thank you for being with us. let's get right into this. in terms of the word bipartisanship and compromise, we're hearing this today, the line's been drawn in the sand when it comes to taxes and the deficit. when it comes to the big issues, senator lott, medicare, medicaid, social security, the economy and taxes, can there be bipartisanship and if not, why? >> biparty anship is very hard to achieve no matter what the issue is or when it is. it seems more difficult now than it has ever been but we're all involved in revisionist history. it was tough in the 1980's and the 1990's. i first came here as a congressman when i was 31 in 1973, and those were some tough times, too, particularly in the house of representatives where the majority has ultimate power

there and i think that's one thing that happened to bipartisanship in the senate over the years, at some point, the majority of the senate had served in the house and the house kind of turned you into a partisan warrior and when you get to it can be achieved, but you have to work at it. first of all, congratulations to all of you for being here. this is a great opportunity for you, a great program at the washington center, and i am sure when you leave your, you won't ever be the same again, and i hope that is in a positive way. right now, it is particularly tough, but you have to work at it, and it is called leadership. you have to have men and women of good will that are willing to run across that i'll we should only be an imaginary ideal, not a blockade or wall between the two parties. i found after just a short time in the senate that if you want

to be anything done, you have to be prepared to be a little flexible. you can get in trouble with either party if you are too flexible. i became known by such robert toward terms as a dealmaker, pragmatist, but are really did not give up that much on my philosophy. what did was try to find issues where philosophy is not the key thing. byron and i were on the commerce committee together. a lot of what happens on that committee should not be partisan. transportation, railroads and highways -- i never thought of it as being partisan. he and i worked on a newspaper issue that we agreed -- the majority of both parties did not agree with. there were two or three issues, importation of drugs --

prescription drugs across the border was something we worked on together. it is not an easy thing to achieve, with all the traveling back and forth, but it can be achieved if people make up their mind they are going to get it done. >> on the issues today, how can it be achieved? what are your lessons from your years in the senate. >> the only lubrication i am aware of for democracy is for people who feel differently about issues to find ways to compromise somewhere in the middle. if trent lott runs for the senate from mississippi and i am a candidate for the u.s. senate from north dakota, we come here with different constituencies sending us here. my constituents may feel differently than his constituents on certain issues. we come here with our own notions about how things should work and what we believe. when we get here, let's assume

that he and i feel very differently about the issues, taxes, for example. the only way can resolve that in a democracy -- you can decide we are just going to sit on our positions and we will never reach accord. or you can decide as a country it is important for us to come together and do that. the tax issue right now, for example, is a very important issue because we are deep in debt. we can talk about the reasons for that, but we are, and we have been fighting in that war is now for nearly 10 years and have not paid for a penny of it. -- we have been fighting two wars. if you are going to send young men and women ought to risk their lives halfway around the world, shouldn't we at least have the courage to say we are going to pay the bill so that when you come back from the war,

you don't have to pay the bill? that is my feeling about it. there are others who feel absolutely not, we don't intend to support any taxes. there is a difference of opinion. how you resolve that? you try to figure out where is there some give-and-take, and any move ahead with this illusion that you hope represents the best interest of this country. -- with the solution that you hope represents the best interest of this country. >> one of the things you need to do as a leader, particularly in congress, but in life, is listen a little bit. right now all your hearing is the president say we need more taxes, democrats saying more taxes on everybody but the so- called middle class. republicans are saying no taxes. if he listened carefully, republicans say some of these loopholes we could take a look at closing those, and some of

the democrats are saying we know we are not going to get all these proposals being made now by the president this very day, but are there some areas of genuine tax reform that might actually make a better tax code and reduce individual and corporate rates, which would help the creation of jobs and competition around the world? if you listen to what both sides are saying, there actually is some common ground. i don't get in a twit about it because the way it works in washington, everybody says i am for this and nothing else. they are positioning, quite often, to actually get the job done. that is my hope and my prayer, that they will find a way to stop just staking out the positions and see where there is common ground.

>> the difference is, that is what is not happening today. haven't traditionally the way trent described it bge happen it traditionally the way he described it. that is the way it did work, but in recent years, that is not the way it is working. instead, you reach an impasse, nothing happens, the ship of state bloats out there, desperately in need of good decisions being made, and both sides sitting on their laurels saying we do not intend to compromise. what bothers me the most is, in this country now there is some political dialogue that suggests there are two choices. you either stand by your principles and fight for your principles, or you compromise. the compromise, that means you have caved in on your principles. that should not be the case at all. the only way democracy works is compromise, but we have a

bleacher section that watches the playing field and they have programs on radio and television on both sides. they watch the playing field and say how dare you compromise? you did not come here to stand on your principles? shame on you. the result is impasse at a time when the country can least afford to have an impasse. we need some good decisions to put it back on track and put people back to work. nobody likes to pay taxes, but when i see a good school that my kids attend, i am happy to pay taxes for that school. when i see a good road, i am happy to see taxes -- pay taxes to see the kind of infrastructure they don't have in honduras, for example. nobody wants to pay more taxes than we need to invest in this country. on the other hand, we need spending restraints and new revenues. there is a lot we need to do.

>> senator lott, i want to frame this in terms of a comment made by your successor, mitch mcconnell. he said his job is to seek barack obama a one-term president. yet you have to sit down and work with this president. you worked with bill clinton. despite public posturing with some harsh words for the administration, how do you do that? have you say one thing behind the camera and then sit down behind closed doors and work out a deal? -- how do you say one thing behind the camera? >> i used to urge president bush to invite harry reid over late in the afternoon, just the two of them, set out there on that south portico and look at the washington monument with

that beautiful view and talk about the country. i said it would be nice if you could have a glass of something ke.drink other than coc since neither one of them were drinkers, i knew that was hopeless, but i think the personal relationship is part of it. one of the reason byron and i started doing some work together, we got to know each other. i was not so sure about him, but he had a beautiful, brilliant wife. [laughter] seriously, that is part of what is missing now, because the senators and house members in the administration don't really pursue personal relationships. they don't pursue an opportunity beyond the headlines, the limelight -- the president has to talk to his base, mitch mcconnell wants to see obama defeated, the president wants to see the senate remain democrat.

somewhere along the line, somebody has to say by the way, in the meantime, we are going to do some things for our country. >> we switched a couple of times, but sometimes we would get over in the core and say look, if we get this done, there will be enough credit to go round four of us and our parties. i remember one time we actually pushed an issue together as the two party leaders when our conferences work against us. >> the pager act. >> that is right. -- the patriot act. i had some conservatives that were about ready to throw me out of my position because they thought i was going too far. tom was running into some resistance with his caucus also. we had a cell phone conversation and agreed we would meet on the floor of the senate and call up the bill and get it done, and we did. it wound up passing 98-2.

it may have been a mistake, in retrospect. it was something we needed to get done. it was in the aftermath of 9/11. you can argue about the details, but the most important thing was to get something done so our intelligence communities could do the job they need to do. >> when it mcconnell said that, i was gritting my teeth, but that is politics. the republican leader of the senate would certainly want to see a democratic president replaced with a republican president. that is not news. it was news when he said it is his highest priority, and a time when our country has such desperate problems. there are a lot of in temperate things that in politics on both sides. it is more important to violate what people do rather than what they say. the question for this congress and future congresses is are they going to do what is necessary to put this country on

track to become the country that we were? is this going to be an economy that expands the economy and provides opportunities? that is the key issue, in my judgment. >> one of my favorite quotes from all time is from margaret thatcher. she was speaking to the republican conference of senators and talking about how she did things for parliament and republican senator said lady thatcher, that is all well and good, but in the united states senate, we have to pursue a consensus. we have to try to come to an agreement that the majority of the senators agreed to. how do you deal with that? she paused for a moment and said, the pursuit of consensus is the abdication of leadership. true leadership is to establish a position that your principles support and lead to a consensus.

i thought an awful lot about that. that is what byron is talking about. you don't give up on your fundamental principles. you fight for what you believe, but you allow that to help shape the debate, and it can develop into a consensus. >> thank you for being with us on behalf of students at the washington center. we will begin with questions right over here. >> my question is, what do you think radical groups like the tea party due to the idea of compromise and bipartisanship? >> interlock? >> first of all, i don't agree with your description of radical groups when you come to the tea party. who are they? first of all, if you look at it, the leading democratic candidate for governor in louisiana is a tea party member.

he is a democrat. it is not just a radical group of republicans. there are a lot of men and women. where i am from, there are people that really matter barrick 3 -- really are very much concerned about the deficit and the debt. that is what they want to talk about, and they will hammer you on that. and they vary. this is a very loose knit group. i cannot figure out who does run the show. somebody said all the tea party candidates in my state lost last year in the primary. somebody said why is that? don't you have tea party? >> i said yes, but the tea party is us, not some separate group. you do have groups on both sides of the party line and philosophical lines that do take extreme positions, and they do

make governing difficult. that is what our form of democracy is all about. it is messy. anytime you have a good, hot debate, if you listen, you learn from it. i am all for it. i did not take offense. i always made it a point to go to union hall. when is the last time you heard a republican officeholder go to a union hall? when i practiced law, i represented the boilermakers, the longshoremen. i would go into the union hall. the leaders did not like to see me, but the members would listen to me. i am not infering they are a radical group, but philosophically, they were not where i was on most issues. >> i think the origin of the question is, the tea party and its representation that you normally see and hear, i think

the t party is an important part of the political process. it is way off from where i am in terms of its position, but they have a right to get involved and they have really gotten involved. they have the right to do that. what probably rigid nature question is michele bachmann saying she is the leader in washington and has had leadership positions and done a lot of things for them, and her positions on a wide range of issues are fairly well off the chart. she would like to get rid of the minimum wage and medicare. she believes we should have opted -- we should have defaulted on our debt. that is radical, i think. her presentation of being the head of the tea party and taking those positions is aptly described as radical. having said that, the republican party at this point has tea

party influence and all the important states, and i think all of those who are running for president have to find a way to get through a crevice that is for the right than it used to be on the republican side. for the general election, we will have to move back a little bit. i don't know if trent lott will agree with that publicly. >> i will support the candidate that i think can win, and it may not be the one i would prefer philosophically, but that is where my pragmatism kicks in. you have to look over the horizon and look beyond just your personal preferences and think about who would be a better president. sometimes it is more conservative president, sometimes a more moderate candidate. i don't have a problem with those kinds of shades. that is why i got in trouble sometimes in leadership. >> who is that candidate? >> i am supporting mitt romney for president.

my state right now would probably vote for rick perry. i like texas, i like swagger, i like his philosophical positions, i like governor perry, but right now i want some and that is really going to focus on the economy and create jobs. i think our best candidate to win the election is mitt romney. so that is who i am supporting. >> my question is for senator lott and senator dorgan. what exists in the world today that is the greatest threat to individual liberty and personal freedom? >> nedney take a really 30,000 level -- 30,000 foot level look at this. the explosion of one nuclear- weapons in a major city will change life forever as we know it on this planet. about a month after 9/11, there

was a cia agent called dragon fire reported -- who reported there was a piece of intelligence information that suggested that a nuclear weapon, a 15 kelli ton russian nuclear weapon had been stolen from the russian arsenal and had been smuggled into either in new york city or washington, d.c by terrorists and would be detonated. for the next month or so, there was an apoplectic seizure in this town. you did not read about this. they did not even tell new york city about the threat. what if one nuclear weapon had been stolen and trucked into new york by terrorists or washington, d.c and exploded, and 200,000 people were killed? this is a planet in which there

are about 30,000 nuclear weapons. i just described the seizure we had over the potential loss of one in the year 2001. if we don't get about the business of trying to figure out how to dramatically reduce the number of nuclear weapons on this planet, and take new and more aggressive steps to keep them forever out of the hands of rogue nations and/or terrorist groups, you all will live at a time when a nuclear weapon is exploded in anger. that will change everything on this planet. >> i am glad we have representation here from oklahoma. do you play oklahoma in football? what to have you. it is hard to disagree with what byron says about the threat, and i don't want to go too far on this, but i think the strength of the american people could

withstand just about any kind of attack like that. i am pleased that both administrations, this one and the previous one, have done an awful lot of things to prevent that sort of thing from happening, but it is a very serious threat. when i think about my grandchildren, all the sudden that is the most important thing in my life. i get really mad when i see things happening anywhere that i think maybe uncomfortable for me now, but i worry what it will mean for them. i think if we see too many of our responsibilities to government and look to government in washington, or in jackson, mississippi, to do everything for us beyond anything reasonable, that is the greatest threat. my predecessor in congress, a democrat i worked for for four years and late 1960's, used to say the greatest threat for our country is not from without our

borders, but within our own ranks. i think we need to think about that and think about the freedoms and responsibilities we have as americans and protect those first, last, and always. >> i am from florida international university. what is your perspective on possible immigration reform? is it something congress will ever come to agreement on and saw this issue? >> we have come close a couple of times. back that was the moment when i decided to retire from congress the last time we tried it, because i was so ashamed and embarrassed with the conduct of the senate on that. i think we need immigration reform. it is not just about illegal immigrants. is also about legal immigrants. on occasion i have tried to get some people into this country. one was a late from sweden who

was a physicist we were trying to get into the u.s. legally to work on a nasa program. you would have thought we trying to steal the u.s. treasury to get her into the country. it is hard to get someone with that kind of background from that country into the united states. i would try to get canadian doctors into mississippi. it was an absolute war. i think we need immigration reform, legal and illegal. we need to think about how can get more people legally into the country who have something to offer. they have everything you are looking for, and they cannot get in here, and yet we seem to be unable or unwilling to police our borders and control illegal immigration into this country. then you get into the terrible problem of what you do with those who are here already illegally? i don't think it can build a fence high enough, deep enough,

wide enough, to keep people out. i also don't think you could have the attitude of just throw them all out. i have had death threats because i had the temerity to say something like that. i was working to get an immigration bill through that i thought would be good for that country. that is what the legislative process is. you have an amendment, you have debate, and you decide how you are going to vote based on what is in the package. it was supported by president bush, by ted kennedy, by trent lott, by lindsey gramm, by harry reid. an eclectic group. the reason was, when i look back on that, -- we were doing ok on the process but we messed up on

communications. that -- opposition had to be described in three paragraphs, and the opposition view was, it was amnesty, just that one word. we were going over details. we do need it. it will take a bipartisan effort. we need a president who will leave on it and not just face in the immigration reform. they need to get down under the hood and get their hands dirty. is it going to happen right away? nope. there will be a window of opportunity in early spring of 2013. i hope the next president, whoever he may be, and congress will confront this issue. it is difficult and complicated, but we did not get sent here to play checkers.

>> i am from emerson college in boston. i wanted to talk about how the media frames the debate. the media often frames in a win/lose scenario. is it worse now than has been, or is it the same old song and dance? >> i think the media reports almost everything that is in the news as a horse race, who is ahead in the backstretch, and they just continue to report which side is going to win, rather than the real meat and substance of most issues. c-span is extraordinary. i think c-span is one of the great places where the american people get an on varnish view of what both sides believe and how they feel about issues in some detail.

go to headline news or fox business or whatever you want to watch, and what you see as little snapshot, and most of it is about who is winning. it has changed dramatically. first of all, we don't even know what journalism is anymore. anybody can call himself a journalist if he has a microphone and a note pad. this fact checking all of that? the answer is nobody. with the internet and the 24/7 news hour and things going viral, massive amounts of misinformation can move instantly to everyone. it is much harder to have a really awful, link the debate that errors out all sides on controversial and complicated issues. >> i am curious, how many of you in this room have traveled to another country?

i understand some of you are international. pretty impressive. if you have left this country and you are an american and you have gone to another country and you look back in the rearview mirror, you understand what this country is and why, in a planet where there is close to 7 billion people, why there are a lot of people who aspire to come to the united states of america. they see it as a beacon of hope and opportunity and they want to go there. unfortunately, we cannot accommodate everybody. if we had no immigration laws at all and said come here, join us, live with us, we would be overrun by people on the planet who want to come and be a part of the american experience. we are not able to police our borders. immigration is a very important issue. we need to get it done right and

we need to enforce our borders, but we especially need to resolve the status of those who are here. a lot of young kids out there, some of whom are fighting for this country, whose status is not resolved. it has not been done because it is very hard and very controversial, but it ranks among the five or six issues that have to be tackled by this country. >> the 24/7 news media, the coverage that we get now, particularly in the electronic media, is a big part of the problem why our leaders in congress are having such a difficult time coming together in a bipartisan way and producing results on almost anything. but since you are students and you are studying political science and history, go back and study the history and see what john adams and alexander hamilton and thomas jefferson had to say about the media. the media just rake them over

the coals. the case of thomas jefferson, a lot of it up was malicious and untrue. the media has always been part of the problem of politics and part of why america is as great as it is. freedom of the press -- i hate it and i loved it. >> i am a stint at the university of tampa, florida. some people think the institution of the united states senate has become a problem, there are too many obstructionist tactics and procedural delays and it needs to be reformed. do you agree or disagree with that? >> i think reform or ways to improve an institution should always be on the table. with cooperation from harry reid and mitch mcconnell, senator schumer and center lamar alexander did come up with some

reforms this year, and you can always find ways to do that. the problem is not the rules, not the institution, it is the people. i had that conversation and not standing in from the chamber where we were having one of these embarrassing roll call votes. we were voting on about 70 amendments, one after the other. it was just part of the process and it was embarrassing. we are talking about why are we here and looking so bad tonight? it was probably 8:00 or 9:00 at night. joe lieberman, chris dodd, lindsey graham, john, from arizona and myself. kent conrad was there. we were discussing what the problem was and how we should change this to stop it. i said the problem is us, because we put up with so much

stuff. we tolerate some of these things and don't really try to find a way to get something done. i take advantage of the rules. i used to do what harry reid does now and mitch mcconnell has done, you fill up the tree. when you fill up the tree, you block amendments from all other senators. it is being used more than it was in the past. i do think it is a problem when you get into a filibuster it halt the proceedings of even taking up a bill. maybe some of should be evaluated, but it depends on your perspective. i used to think seniority was a bad idea, until i woke up and i was close to being no. 2 in the house. well rose a freshman ricky on the back row, i would get so mad i could not restrain myself.

when i was standing at the leaders chair, i saw a little different. the senate is a unique place. it is hard to get anything done, but if you have true leadership and true commitment, you find ways. i would urge harry reid to stop finding things to fight over. find things that you can move along. if you look under the covers, there have been a few things they have done just in the last week where you see cooperation between harry reid and mitch mcconnell. i keep pushing them to try to actually do a highway bill. it is something we need in this country. it would create jobs. it is not partisan, so stop trying to look at where you know you will have a bite and cannot

get it done. just like the president's saying past my jobs bill like it is. that is not going to happen, and he knows it. say to the congress, this is what i would like to have, but let's see if we can do the payroll tax issue, maybe the highway bill. what are the things we can do together, and then see if we can get those done. >> the senate was designed deliberately to slow things down and has been spectacularly successful. >> my question is an addition to his question. last week oxon hill and i send it -- i attended a subcommittee that seemed very bipartisan and they seem to get through a lot of shippers -- lot of issues. the next that went to the full committee, and there were so

many split right down the middle. i was wondering why you would think in this subcommittee there is more bipartisanship and when you go up the ladder. it was the commerce and science committee. >> what was the controversy? >> it was not a controversy. that passed the bill through, but then it was all these amendments. >> i was on appropriations for many years, and normally they try to say if you have a controversial amendment, don't bring it to the committee, save it for the floor of the senate and we will have a debate on the floor of the senate, and of course the bill never gets to the floor of the senate. for the last two years, we made spending choices, established what the priorities were -- none of them got to the floor of the senate. that is one area where the senate is broken.

we cannot continue that way. there are a lot of reasons for it, and i won't take the bait on trent of the notion about the president offering his jobs proposal, take-it-or-leave-it. the problem is, neither side offers the american people something to be proud of these days. i was giving a speech by wild back and said both sides reminded me of the:about a man who drinks too much and his spouse scolds him. he drinks because she scolds, he thinks. she scolds because she he drinks, she thinks. neither will it is true, he's a drunk and she's a shrew. neither side really is offering the american people very much. the congress needs to get its work done. these to compromise on the tough

issues. >> i am from the university of new hampshire. i would like to hear from both sides of the aisle on this question. what do you think is a major step that needs to be taken to truly reform our current convoluted tax code? >> i think we do need broad group -- broad tax reform. we have not had a major tax reform bill since 1986 or 1987. we do need fundamental tax reform. every congress adds a few more additions to the tax code. it has become a mishmash and is confusing and overwhelming. in many respects, it is unfair. you don't support this group or that group. i have a lot of faith in the

leadership of the ways and means committee and house, you have all of members on both sides of the aisle. the same thing in the senate. you have max baucus and john grassley and john kerry. the philosophical balance is are there. they have had a lot of hearings. when i was on the finance committee in 2007, we were derrek -- we were having hearings then in a run of of what should be tax reform. broadbased, fundamental tax reform takes at least three years to lay the groundwork, have the hearing, the site where you can lose the loopholes. -- close the loopholes. if they would look at this across the board and try to make a more fair tax code and take away some of the incentives, but then tried to lower the rates with individuals and corporate tax rate, i think it would be

very good for the country and for job creation. one of the things i say to paul ryan, chairman of the budget committee, remember as jack kemp is to say, never say the word cuts are balanced budget without saying growth. what is if you are going to do to have responsible budgets, but do it in such a way in terms of tax code and where you spend or don't spend that will provide growth to the economy? i think we have lost that second word. i think it can be done and could be done right now. i would like to see the committee -- the super committee say we will give the tax-writing committees eight months with a hammer at the end. you have to do it or else, to sit down and have final across- the-board tax reform. as republican, i would prefer it would be revenue neutral, but if

they would get up and say we want a fairer tax code and it has to apply some revenue, i think even that would work. but give them time to do it sensibly, but it needs to be done now. if we don't get it done in the next eight months, then we are looking at 2013 or 2014. >> this town is full of lobbyists trying to make sure that individual companies or industries get those tax breaks and loopholes. what would change? what would cause change? >> it is hard to do. i was on the ways and means committee and helped write the 1986 act. ronald reagan pushed for it. we lowered the rate and broadened the base. it was the right thing to do. over all these years, i agree with trent. let's do tax reform, lower the

base, broaden the base, get rid of a lot of the deductions. it also indicates that we tackle this question, let's understand there is a disgrace in this tax code, notwithstanding all the other things. warren buffett wrote a piece for the new york times. he is a good guy, the second richest man in the world. in his law office in omaha where they have 30 employees, they all volunteered to rate what rate of tax they pay. the second richest man in the world had the lowest rate of tax than his receptionist. that is just disgraceful. what is your name, young lady? allie makes $3.6 billion a year. that is $300 million a month.

is that $10 million a day? allie makes $10 million a day seven days a week, all year long. the know what her tax rate is? she pays an income tax rate of 15%. why? because her income is described as carried interest. that is disgraceful that someone at the top of the food chain making the highest incomes in the world, running a hedge fund, pays a 15% rate and all your parents are paying 25%, 30%, 35% tax rate. that is disgraceful. i would be willing to get rid of the corporate income tax and replace it with a value added tax if necessary. general electric makes billions and pays zero. let's not pretend anymore. let's move to a buy you added

tax, which we should do anyway. we are non-competitive when it comes to the tax code. >> i was talking to one of those groups that you think would be opposed to losing tax credits. this group gets the benefit of some of them. they will tell you, we might not want to resist if we thought at the other end of this exercise we would get a lower corporate tax rate. we think it might actually be better for us with this tax credit we are now getting. there is some of that talk going on in corporate america's mind. >> i am from the american university of central asia. my question is far from politics. what it buys can you give us a

young and smart professionals and future leaders who will be changing the world and a couple of years to tell the u.s. about the whole world. >> i think you should run for office. we need young people like you with that line to get out there and take on the verge of being a candidate and providing leadership. that is what we need. you need to get involved. when i look back on my own life , and look at the blessings and opportunities it i had -- my dad was a shipyard worker and my mother was an elementary school teacher in mississippi, and yet i lived the american dream. what is the american dream? it was the opportunity to go up there and take a chance, to put your name on the line and try to make a difference. that is what we need. we need young people like you that are educated, that are

sensitive to international considerations, and try to make a difference. learn all you can. i talked to a lot of young people, and when you see the opportunity, sees it, because it may not come again. --seize it. i had my good times and my bad times. i made mistakes. i got in serious trouble. i was high on a mountain top and way down in the valley. i managed to climb back up with the help of a lot of good people. through it all, it was an incredible opportunity and an incredible system in america. we don't take an oath to the people of this country. we take an oath to the idea inculcated in the constitution. the only thing we need to

preserve that constitution is young people like you that are prepared to get involved and try to make a difference. >> j. paul getty once said that his the advice for young people was, go to the best school you , then get theexcel best job you can find an did your best to the workplace, and then strike oil. the key issue is, don't ever limit yourself. the only limits you are ever going to have are the ones you put on yourself. i come from a high school class of ninth in a town of 300 people, and went from that desk in that small school to a desk in the united states senate. that is pretty improbable. when you see daylight, run for it. don't ever limit yourself.

>> when you first ran for office, senator dorgan, how old were you? >> i have a very unusual story. i have been a state what elected officer since 1926. i story was in some ways worn from tragedy. an incumbent officeholder, a young, brilliant man had just been elected. he grew up in the town of eight people and went to harvard law school. he came back and ran for office in north dakota and one. i was not living in north dakota. he asked me to come back, and i did. about a year-and-a-half later, he took his own life, a tragic situation. six weeks after that, the governor called me down to his office and i was 26 years old. he said i would like you to fill the unexpired term. i ran, i ran, and i ran again.

i ran for reelection, ran for the house, ran for the senate. i ran 12 times statewide and after a 30 year career, i decided to do some other things. i would not trade the experience. has been a wonderful privilege. >> i came to the city at 26 to be administrative assistant to my democratic predecessor in the house of representatives. he retired four years later and i ran at age 31 and served 35 years in congress. >> in puerto rico, we were allowed to vote in the democratic party primaries. considering this that, do you think we should be allowed to

vote for presidency also? >> or should it be a state? >> i think that should be up to the people of puerto rico. the people there have decided in the past and i guess it will in the future whether you want to be a commonwealth or a state. >> that has always been my view as well. we have had these issues presented to congress. my view is, let's evaluate what the people of puerto rico want. the you have an opinion? >> i just wanted to get your point of view, because i have seen my people but the point of view, and we are kind of undecided -- i have seen my people's point of view. some of us want to vote and some of us don't want to vote. i just wanted to see what was the congress'point of view in that matter. >> you are going to have to vote, and when you make up your

mind, then it will be up to the congress. >> my question is about the presidential election going on. did you think the view of rick perry and mitt romney matches up to the american public, and if they do when the presidential election in 2012, what issues could they face by the american public if some of their views are not compromised for the future of our country? >> are those the only two candidates? do you think another republican could potentially challenge mitt romney and rick perry? >> i have no idea. i am just speaking about them because i heard the said he was supporting mitt romney. >> when i was in the house of representatives, i represented the mississippi gulf coast, the

saudis from corner of the state. it was a very easy population to represent, because my background was there. when i got elected to the senate, i represent a very different constituency. the people and the problems were different. there once and desires were different. i spent a couple of years going around to different parts of the state, listing to people, what they needed, and trying to decide what i could do to be helpful to them. when you become president, in a primary you tend to identify this is my philosophy, this is where i stand and where is best for my family and my country. as you go forward, one of the good things about the american political system is, you learn. sometimes you do have to

modulator positions. some things you were so sure about, you find out maybe that is not exactly the way it is with the greater populace. i think you become a better candidate when you modify some of your positions, and then one day you are president of all of people. some of your preferred positions, you may not be able to focus on that, or you may have to downplay that a little bit to do some of the other things. ever-present and i have ever known thought he was going to be a domestic president, and everyone of them ended up with a international disaster on their hands. i thought president bush was going to be able to make a lot more effort in mexico and central and south america. i think we made a mistake by not paying more attention to our neighbors to the south. he thought he was going to do a lot more of that, and then there

was 9/11 and everything was about terrorists and iraq and afghanistan. jimmy carter, the governor of georgia, he had no idea and never would have dreamed what happened in iran. i guess what i am saying to you, in your primary you learn and go forward. you have to give. when you become president, you have to reach for a higher star and try to think about the greater legacy of your country, not just of you. what i am saying to you is, right now, you are going to see candidates in both parties have and to take positions that may make them uncomfortable. that is the politics of it. in the end, you also have to govern. that forces you sometimes to take positions that are different from what you would have thought they would be at the beginning. i apologize for the length of that answer, but i thought was

necessary based on your question. >> i think it is largely romney versus perry at this moment. as has been the case on the democratic side from time to time, it is now the case on the republican side, when have these primaries that you think of them as sailboats. they put up a sale and sailed far to the right to navigate through those primaries. when the primaries are over, they will tack a little bit back to the center, because this country has a very strong center. i think the sailboat on the right has gone way off the edge of the map this year in order to please the people they have to please in certain areas to be successful in the primaries. they will come back somewhere toward the center. they want to appeal to that small part of their party that

will determine who the candidate is, but at the end of that, they want to come back and appealed to the broad range of the american voters. >> the republican party will nominate the most conservative candidate they think they can get away with. if they go too far, they lose. the democratic party will go to the candidate as far to the left as they can. if they go too far left, they will lose. sometimes they feel like they overreact. subconsciously, they will switch it back some to try to keep more checks and balances in place. i really feel like the best government is usually when we have the white house in one party and the congress and the other. when i was majority leader, bill clinton was president. if you look at the legislative achievements of the late 1990's, you will be shocked at the

variety and number of pieces of legislation we passed. >> like welfare reform. >> we did save drinking water, portability of insurance, tax cuts, balanced budget. we actually had balanced budgets and surpluses. we rebuilt our defense. >> some think senate may go republican. >> we have about 10 minutes left. >> my question isabel the bill about the chinese media advantage here in the united states which was introduced earlier this year. while there are only to american journalist that are granted permission in china, there is an alarming disparity between the numbers. what do you think of this

alarming disparity? >> are either of the following this issue? >> no, not this issue, but i have written a book that has a lot about china in it. it is more about trade, but it also deals with some of the other imbalances with respect to our relationship with china. china will have a significant influence on our future. the question is, what will that influence be? our approach to try has been engagement to trade and travel, believing that leads to greater human rights in china. there is a lot that concerns me about things in china and the lack of human rights. we keep working at it as a country, and i am not familiar with the imbalance of journalists, as you describe it. >> one of the hot tickets right

now is the israeli-palestinian conflict. terms of american world politics and our national security, what stance should we take and why? >> i think the united states has a critical and very sensitive role to play. has been very difficult for us to take a position that was as except in the arab world as it has been with israel. obviously we are very close in our relationship with israel. i do think the solution, as i said in the other discussion, really needs to be between the palestinians and the israelis. the administrations, but this one and the previous one, have taken a difficult stance to try to push that negotiation. i think it would be a huge mistake if the united nations were to step into the situation right now. we should continue to press to

find a solution that would lead to peace and stability. when you think of rockets being dumped into israel today, that is a horrible way to have to live. we need to try to find some way to have long-term peace and security for all the players involved. especially for israel. >> i am from the university of washington. what bipartisan steps are being taken in pursuit of israeli and palestinian peace? >> i don't think there is great didn't -- disagreement in the congress about our relationship with israel and our determination and desire to see a negotiated settlement. i wish both sides would not get off and get to the table and

negotiate. our country should as aggressively as possible push that position. the only way to ever get an agreement is to sit and negotiate at the table. it is a very important issue for the world. we desperately need to see this resolved. >> every american that tries to do a deal with that, president carter thought that he had pushed through a basis for an agreement. and george bush. it is very difficult. i think it is also difficult for peace in that part of the world. it is something that we always need to be listening and learning. i don't represent this country, but i will be meeting with the retiring ambassador from morocco. i want to get his perspective on

what is happening in that whole region of the world. he is muslim. he is leading as a diplomat and he has a unique perspective on that region of the world. countries like morocco, i think we should be very careful to listen to their perspective as well as the israeli perspective. representing usc, go aztecs. one of the group that helped obama get elected was college students. the thing he has done enough nl last couple of years to deserve a vote in 2012? we have heard about the enthusiasm gap.

>> this isn't just an enthusiasm gap about politics or president obama. this country has lost the spring in its staff, some confidence. we are fighting two wars, we have been in the deepest recession since the great depression. the day that barack obama became president, on that month, we lost 675,000 jobs alone. he was handed a very difficult economy and a very difficult circumstance. i like barack obama, i think he has done as much as he can do to get bipartisan health. he has been blocked in every respect. has he made all the right decisions? no. i think this country in the minority party in the senate always have tried to help work through these problems. coming back to mitch mcconnell's

statement, his highest objective is to see barack obama defeated. my highest objective is to put this country back on track and put people back to work. and let america experience what comes with a broad opportunity once again. there is plenty to be concerned about about politics on both sides. barack obama is going to run for president for a second term. either romney or perry, in my judgment, will be the republican nominee. and beginning next year, we will have a robust discussion about who we are and where we want to go. and who is best to take us there. i hope we are not discouraged, but this guy has tried very hard, having inherited the worst economy since the 1930's. i hope you will not be too

discouraged about the fact that we have not had instant progress. >> have we lost the spring and hours that? >> i think the american people are worried about a variety of things now. when i go home and talk to people, particularly -- this is washington speak, but small business people, community bankers, people are worried. they're worried about their own economic situation and they're worried about the future of our country. when we are challenged the most, we will rise to the occasion. there are a lot of unique things about the people in this country. we are unique. we are facing a challenge that is more difficult because the enemy is not so obvious. it is the sinister economic enemy. with regard to the young people, i think this will be an interesting campaign for the

young people. one of the things i have noticed over the years is that every four years, the students are very different. at universities across the country. the generation that came along right after me in the aftermath of watergate and vietnam and everything, they became much more liberal in their views, things that i never knew anything about her drug culture, but right after that, it was a problem. they had a very different perspective. my son and my daughter, their generation, it looked a lot like my generation. there are all of these ebbs and flows with the young people and university students. i think it will be very different this time. let's see who the republicans

nominate, let's see what he or she really talks about. one of the things that worries me, both with the previous administration and this one, i worry about how much of these presidents control administration's. president bush, i did not feel like he was in control of the transportation department, the energy department, the things we are doing. the same thing now. the alphabet soup of the city, the agencies, i think it is out of control. i think they are on an agenda of their own. many times, even the white house has things happen that shocked them because all of these bureaucrats, they will be there when the next president comes. one of many reasons why i hope

we change presidents, i want a president that says we will get this administration and this government under control. and stop some of the, what i think our regulatory problems. >> how many cast their first ballot in 2008? how many of you will be voting for the first time in 2012? how many will be voting? >> the best question of all. >> [inaudible] my question as a european, how was it possible that a social clan has so much opposition here from both parties? >> are you talking about social programs? >> a similar plan like europe --

>> like health care? are there lessons from europe? >> why is it so difficult for it in the united states when it helps a lot of people. >> let's take health care as a specific example because a lot of people point to what we see in canada, sweden, what are the differences? why is it so different in our country compared to the makeup of europeans? >> because we are so different. we are very individualistic, very independent. we still believe that the best government is the least government. the government closest to the people. i think the most important elected official in this country is the local supervisor. you call them commissioners in some states. y on't want us to be like

europe or a social welfare country. that is not who we have been and i hope we don't become that. i still have faith in the individual, but i have minimum faith in a government that decides where, socially, money should be spent. like on education. people want us to spend more money from the federal level on education. i still believe the best education is determined that the local and the state level. i wound up voting for "no child left behind." to the establishment and i went along with it. it needs reform very badly. it has created competition in some schools that don't meet

bogus criteria. i want education to be important, but i have a problem when local education as dictated from washington, d.c. >> i voted for the health care bill, i think that it's great that 32 million americans that didn't have health insurance now have health insurance. i don't think medical care should depend on your bank account. what happens to someone who has no health care and is near death? the audience shouted, "death, death." we can't do everything for everybody. but i would not in a million years decide to get rid of medicare. that is a social program that is very important. we need to address financing issues. half of senior citizens did not

have health care. did you know that health insurance companies will not chase 80-year-old? you look young and healthy and you will not the health care for a long time. they want your premiums because you will not go to the doctor's office. old folks could not get health insurance that was affordable. they worry about, is this a time that the illness will strike? we put in place medicare. it is an important program. people are living longer, when to to make adjustments. adjustments.to make we have already made decisions about medicare. there are some that don't like medicare or social security. this country will have a very aggressive debate about that next year, and that is a healthy

debate. >> one more question, before we do, you have worked with a lot of presidents. can you share with these students one moment, one experience with one president you have worked with on a personal level. it might have been a political outcome, but give these students the sense of a president that you worked with. think about that question, go ahead. >> i am from the university of central florida. i would like to ask if you think our foreign military engagements affect our democratic process? and in the post war period, will we see the sun setting or a curtailment of civil liberties- infringing acts like the patriot act? >> you can't redo history.

we had to take the fight to the terrorists, they attacked our country. had we known what we know now, we would not have attacked iraq because most of the intelligence was inaccurate. the men and women were very courageous. we did go into afghanistan because that is where bin laden was. 10 years later, we are still in afghanistan. we need to withdraw from afghanistan. we will never control the tribal regions, they have a corrupt government and it is where terrorists were, not where they are. this country is spending over $100 billion a year in afghanistan nation-building. if you want a nation built, built in this country. i feel very strongly about that, but you get involved in these things and you can never

withdraw because you have to explain why. it is time for us to begin moving out of afghanistan. >> i don't think i agree totally with what byron is saying. i think it will sound a lot like it. i think that we are trying to police too much of the world. we're still in germany, south korea, all over the world. it is time that we do reevaluation of our international roles and responsibilities. i think we need to pull back on some of the advanced capabilities. i think we should prepare an advanced force for where we need to, and in the case of emergencies and dealing with terrorists where they pop up. i think the american people think it is time to withdraw in a lot of places. not that we are going to become protectionist and withdraw from

the world, but just modernization of what our role is. i remember getting into arguments when we were going into sarajevo. why do we have to take care of this? i remember talking to the president of germany, and not the prime minister, the president. he said, that's your role. america is supposed to do that. i did not understand. as a member of congress, i always try to be supportive of the president's. i do think that presidents whether it is clinton, bush, or reagan, they have to make a lot of decisions. i remember getting into arguments with president clinton about the rules require that he had to act to get cooperation when he was going to bomb a couple places.

i was jumpy, i wanted proof. he would provide it. i went along and i was supportive, it turns out. the intelligence may not have been good, and i am not being critical of him. it is time to evaluate what our role is going to be in the future. we have to make sure our military is what it needs to be and they have the most modern capabilities and technologically capababilities to save lives. >> you have done a lot with presidents. at one president, one moment. >> i was thinking about ronald reagan, the two george bushes. it is hard to pick a moment. i knew bill clinton when he was attorney general for the state

of arkansas, later became governor, later became president. i think, you know, to show politics is personal, republicans and democrats care about each other, and are friends. i had lost a daughter, it was a devastating time in my life. bill clinton called and talked to me for an hour-and-a-half at night. about 10:30 at night from the white house. after that, there is a flood in north dakota where people were evacuated. bill clinton came out there with us and we flew out in air force one, we landed in empty bomber hangars.

thousands of people were sleeping on cots because the city was under water. bill clinton climb to the stage in these people that had been sleeping -- climbed to the stage and these people that had been sleeping on cots were waiting to hear what he had to say. he said, you are not alone. this country is with you. it is one of those moments i never forgot because of high a did not forget the impact on all of those people. this country is behind you. >> i have a lot of things that i have fond memories of. when nixon came after hurricane camille. seeing air force one pull up, you will never forget that. the most memorable ones were the ones where they would call at

2:00 in the morning and when i would hang up, my wife would say, what does he want -- did he want? i'd say, i don't know. [laughter] the most interesting one was 1986. i was the republican whip in the house in charge of counting of the votes. i resisted the tax reform bill that reagan was pushing in the form that it was in. not only am i not going to do the with work, i am going to vote against it. i was on the right side of his desk, jim bakker on the other side of the desk, his chief of staff. he is pressing me to support this bill. mr. president, that is not what i came here to do. a lot of it is tax increases, i don't think that is what you came here to do.

we talked a while, and he said, if i can't count on the whip, who can i count on? i leaned back and i thought i was the son of a shipyard man and i'm telling a world leader, "no i can't help you." i said, ok, mr. president. i'll do it. i did the work, voted for it, and it was one of the worst votes i cast in. you startmemorable, sweating, if i can't count on you, who can i count on? when the president of the united states puts it to you like that, you have to help him. >> the washington center from around the country and here in washington d.c., on behalf of

the bipartisan center, thank you very much for being with us. [applause] thank you, senators. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> in a few moments, a look at what congressional republicans are planning for the economy and jobs. in about an hour, president obama outlined his plan to cut the deficit. after that, details of the president's plan from kim geithner and -- tim geithner and jack lew. and we will review how partisanship that time of divided government with trent lott and byron -- on "washington journal," we talk about the

president's jobs plan with rob andrews of new jersey. republican rep darrell issa chairs the government reform committee. we will take questions about the committee's agenda and the closing of post offices and eliminating mail delivery on saturday. and we'll be joined by the defense correspondents anna mulrine who recently returned from afghanistan. "washington journal" is live every day at 7:00 a.m. eastern. more now about congressional republicans' plans for the economy and jobs. from "washington journal" this is about an hour.

>> joining us at our table is dean baker. we are also joined by james from the heritage foundation. he is a senior policy analyst in the area of labor economics. the first question for each of you, how would you describe what republicans are trying to put forth on jobs? >> we have been hit with this calamity, the housing bubble collapsed, losing $1.20 trillion in annual demand due to consumption driven by the bubble. you have to find some way to counter that. the republicans are saying let's do nothing, have no regulation or taxes and hope that somehow, we will see businesses grow and create jobs. businesses don't work that way. herbert hoover tried this, you have to create demand. >> i think is quite different.

the demand stimulus policies just haven't worked. it hasn't worked. when you have to be doing is reducing barriers. you are taking the barriers out there that the government has erected and removing them to you have a better fiscal climate. >> we had those barriers when we have the economy growing 4% a year. those barriers don't prevent the economy from growing and creating jobs. it is just a matter of proportion. it is about $300 billion a year for stimulus and we are trying to account for $4 trillion of lost the man. their analysis shows that it was more effective than the administration had predicted. >> they are saying that it would be down to 7% unemployment right now and obviously, that is not the case. the stimulus package, like chump

change. it did not have any affect. you can have the parking brake on, but when the economy is taking a body blow, you don't want to do anything that will prevent you from doing things down the road. >> let me get the numbers on the screen for viewers. democrats, republicans, and independents. at the table, james shirk, senior policy analyst with the heritage foundation and dean baker, center for economic policy and research. let's get a little taste of what

speaker boehner is saying about jobs. >> let's be honest with ourselves. the president's proposals are a poor substitute for the policies needed to remove barriers to job creation in america. the policies that are needed to get america back to work. >> dean baker, any defense of the president's approach to jobs? >> i think the stimulus package worked. of the main problem was that it certainly wasn't big enough. the problem was the projection, it is easy to see. they thought if we did nothing, the unemployment would not get above 9%. it got over 10% if you give any credit to stimulus at all. the problem you can blame for that projections. that was the fault of the

stimulus. dodge the government spending just doesn't work, it is the slowest recovery read have seen since the great depression. we have economists going back and taking a were -- a look. boosting government spending, government intervention, roosevelt and hoover's policies. the attempt for -- we would have recovered the sooner if it had not been for these intervention policies. we have to look and say, why are we having the slowest how we have had in living memory. i think the government is applying the brakes to the economy. >> they were deliberately raising interest rates to slow the economy.

we had a collapsed the bubble -- collapsed bubble. it is harder and harder to get out of it. if you look at what happened in the new deal, the economy grew over 10% a year when roosevelt said to balance the budget and had spending cuts. the unemployment rate fell from 25% to 10%. that is a very sharp fall in a short period of time. >> you count the people in the civilian conservation corps, and to the government -- and the government workers were not earning a full-time wage. there was something else that happened in 1930, upholding the international labor relations act. it is a very well-established

union, the purpose is to restrict the supply in the industry. it has a negative affect. you can argue there are offsetting benefits, but this is from professors and researchers at the minneapolis fed. >> before we hear from our -- yes, let's hear from the house speaker. >> boeing created a plan that would create thousands of jobs for american workers only to be sued by a federal agency that wants to shut it down. let me make sure i have got this right. american companies are free to go create jobs in china, but they aren't free to create jobs in south carolina. >> we have to understand what is at issue here.

the question was whether they deliberately used the threat of moving to north carolina as an anti-xinhua -- anti-union tactic. we should look at whether this is an anti-union threat. if you do x, y, z, we will move the shop elsewhere. whether or not the facts support that, that's what the nlrb is trying to tomorrow. the issue of unions and unemployment rate, you have countries with very high unionization rates, like sweden and germany, denmark, norway, with very low unemployment rates of 4% and 5%. there's a lot of research on this and most of it shows that there's no correlation between unionization rates and unemployment. >> i got to get calls in. brookfield, massachusetts, you're up first. rob, you're on the independent line. good morning. caller: good morning. thanks for taking my call.

i just have a question for the fellow from the heritage foundation. we keep hearing that we need to remove impediments for investment and it seems that there's a lot of cash around waiting to be invested in corporations right now. i know you're going to tell me they're not investing because of an environment of uncertainty but there's always uncertainty in business. and that's not really an excuse sit on your hands and not make investments when you have assets to invest. maybe the problem is they don't see productive use for the assets in this country and that's a scary thought, too. >> let's hear from james sherk of heritage. >> the problem is that the businesses don't see the investment opportunities and so that's why they're not investing. if they thought that after taking into account the risks, that they would make a profit on the investments, they would do that. that's what businesses do, make a profit. the goal of the government, you can't centrally plan the

recovery and say you'll invest in this company and that company because the government doesn't have the investigation. we saw this with evergreen solar, trying to pick where we're going to make investments from washington is a debacle but we should remove the barriers that raise the risks and costs to businesses and encouraging companies to make that risk themselves. >> caller from phoenix, republican side. steven. caller: hi. i'd like people to keep in mind that everything comes from the earth and that all these scholars can shuffle money around here and there and do all these things and talk about this, but everything comes from the earth and we've got to create wealth and jobs and everything, everything's got to come from mining, from farming, from drilling, and it's got to come from the earth.

you can't just, you know, what do they say, rob peter to pay paul. you can't do that. you've got to take the wealth from the earth, bring it up and that's the only way we're going to be able to do it. you can't keep shuffles money around. >> thanks for calling. phoenix. dean baker, let's go to you for this and wanted to dig into some of the detail about what the republicans in congress are putting forth. this from the house republican conference, some of the ideas they suggest will create jobs, to create a 25% top tax rate for people and for businesses. as we know, they want a congressional review of regulations. they'd like to see the colombia, panama and south korea trade practices put into law and expand domestic oil and gas drilling, to the point of the last caller. >> taking it in reverse order. first off, there's very few jobs

at stake with the idea of domestig drilling. we're not going to have energy independence. the idea is absurd. if you drill the oil out of the ground today, it's not there tomorrow so if we're concerned at some point the bad guy it is in world are going to cut us off, the most foolish thing we could do is drill it out today because it won't be there. right now we can buy as much oil as we want from foreign markets so why would you drill it out now. secondly, the top tax rates. we've done this before. it's like, how many times do we have to keep doing the same thing? president bush lowered tax rates. we didn't create any jobs over the course of the decade. president clinton raised tax rates. we created tons of jobs. it didn't keep us from having very good job growth. you go back to the 1950's, 1960's, 1970's, a top tax rate of 90% in the '50's, very good

job growth. >> let me add to that when national "national journal" reports from house republicans. they would like to see a delay in epa emission standards for things like cement production, farm dust, boilers, coal ash, green house gases. can you put it into your words about how those would create jobs? >> what these regulations are going to do is massively raise costs in the regulated industries. the air is cleaner today than it's been in decades so at a time when we've made great progress and the economy is weak, you don't want them to raise additional barriers to businesses, forces them to invest in things that don't help them grow. in texas a few weeks ago, loominent energy announced they would have to shut two power

plants to comply with regulations. the national cement company was planning on investing millions to create construction jobs at a new plant in alabama and they announces they had to shut that down because of the regulations. when the economy is this weak, we don't want to be putting barriers up to businesses that want to expand and the other problem with the regulations, when it raises energy prices, that effects everyone. raising energy prices at a time like this is not a sensible strategy for growth. >> let's get to valahoe, california, david, independent. >> i'm high-tech robotics and information automation executive and engineer, been doing it for about 20 years. and the conversation doesn't seem to deal with the causes. everything's focused on the symptoms. we've put together a different

paradigm shift we call the redistribution of work. if you look at things in america today, what we do for a living, the forces acting on our economy, there aren't as many jobs for uneducated people anymore. the redistribution of work, we put up a video that explains the paradox of productivity, its effect and what we can do in the short term and the long-term to deal with this factor. so i encourage these gentlemen and about you're interested to go to redistributework.com, watch a short video. >> let's hear from our guests, beginning with dean baker, the idea of redistribution of work. >> it's an interesting question. one of the things that's striking about the downturn is the difference in the experience of some of the other countries.

germany in particular stands out. germany has an unemployment rate today that's about half percentage point below what it was at the start of the downturn. it's not because germany's had better growth than the united states. the growth has been roughly the same. the main reason why we've had a increase in unemployment and they've had a half percent decline, they have an aggressive work sharing policy. they reduce work hours rather than lay people off. we have work share programs attached on unemployment systems in 20 states. the take-up rate is low but if we could promote that, president obama actually mentioned this, or his jobs proposal includes a provision to promote work sharing. it's really a bipartyzan issue. the government in germany is a conservative government. there's no public interest encouraging people to be unemployment rather than having

them work shorter hours. >> most of the studies that have been published in peer reviewed litchure show they're relatively ineffective. the caller has a good point in terms of what's happened in manufacturing. it's not so much trade that's led to the drop in manufacturing jobs. in 2007 before the downturn, we were producing more manufactured goods in the u.s. than ever before but because of automation and robotics and computers, we needed far fewer low skilled workers to do the job which long term is good for the economy, the move from the farms and factories is good for the economy but the question is, what do the workers do? one of the problems we have is licensing where a third of the economy is off limits. you need a government license and several years of education to apply for the jobs and even by liberal economists show this is harmful for job growth.

i think we should create opportunities for workers displaced by the new technology rather than shuffling the jobs around to share them. >> our guests, james sherk, he researches ways to promote competition and mobility in the work force, educated at the university of rochester. and we're joined by dean baker, co-founder of the center of policy for economic research. was an assistant professor for bucknell university in pennsylvania, consultant for the world bank. university of denver and university of michigan.

caller: i want the name of one company that pays after deductions and loopholes. i want a name of one company. >> i think she's got a good point. the statutory rate is 35% federal rate plus 4% more state and local rate but if you're an existing company, you've got lobbyists and carve outs and deductions stuck in the tax code so the effective rate is closer to 18%. if you're a new company starting up, you haven't had the time to lobby the code so that your ethanol tax credits or whatever it is you've had stuck in so you're paying the full freight, more or less, as new companies starting out so taxes are disincentive for job growth and this is ground for bipartisan

cooperation. speaker boehner and president obama have said they want to lower the tax rate which is now the highest in the industrialized world but then eliminate a lot of the deductions and credits so there's less of a barrier to starting up companies. >> dean baker, the hill writes more about what republicans are looking for. house republican healthcare proposal is from the hill. they want to exempt health plans in existence before the 2010 healthcare law from the law's requirements. they also want to repeal the requirement that health insurance companies spend 80% of revenue on medical care. any reaction? >> this is making a joke of the plan. there was ample opportunity to amend and change the plan. in fact, i forget, 50, 60, 70 republican amendments were accepted. the 80% requirement. you want your insurer to spend more than 20% of what you're paying them on its administrative fees on its profit, that hardly seems like a harsh condition, to say they

have to spend at least 80% on actually providing care for their customers. >> anything on healthcare to add? >> obama care has been a disaster. there was a poll recently done of small business owners, asking them what are your greatest obstacles to hiring and a third of small business owners were picking the healthcare law as the first or second greatest obstacle. what is the healthcare market to look like in five years? you don't know if you're a business owner. what are your costs going to be? you don't know. how do you plan for the future with this enormous risk hanging over your head? >> we go to brooklyn, new york, chris, republican, thank you for waiting. >> thank you for taking my call. first i'd like to start off by saying that, mr. baker, can you please explain why it is that the government must be a business partner with everybody that goes into business, and how is it that the government is so smart that they can pick wonderful, fantastic winners and losers in the marketplace all the time? just remember, ronald reagan

said the scariest words someone can say is, i'm from the government and i'm here to help. i'll get off but i want to ask both guests one thing. when did millionaires and billionaires start at $200,000. from my math, that's very, very far below $200,000. i'm from new york so i'm used to a lot of people talking about redistribution of wealth and fairness and all that other stuff but my main point is this, the government is not a business partner with us, should not be and cannot be if we're going to be successful. >> dean baker? >> i'm not sure what chris means in the sense that the government is everyone's business partner. i don't know of anyone who that position. i mean, president obama and others have said they want to create a supportive business environment and you have things like the small business administration that's been around, i'd have to go back and look how long it's been around, but it's enjoyed bipartisan support. i have mixed feelings about that but in any case it's out there

to support business. i'm not sure if that's what the caller is attacking. the government in general i don't think is great at picking winners and losers. we have a lot of good technologies like the internet that came from the government so i think the government can often play a useful role in promoting technology. the government spends roughly $30 billion a year on biomedical research through the national institutes of health. republicans, conservatives, the pharmaceutical industry seem to think this is money well spent so i think the government can do lots of good things in terms of creating a good environment for business, good economic groundwork but i don't know anyone who is suggesting that government will pick the winners and losers? >> you might want to talk to the president about his green jobs proposals because we spent tens of billions of dollars on these companies which if they were viable companies the private sector would have invested in the technology. industries were looking and

saying there's no way the companies can succeed so theviation gave these companies billions of dollars in loans. as we've seen with evergreen solar, these companies have gone belly up. it was not a good use of taxpayer dollars. the government shouldn't try to pick which companies should get investment. sit back and allow investors with their own money make that risk. >> you're opposed to the small business administration? >> i think the small business does atration probably lot more than it should. >> back to healthcare, question by twitter this morning. please ask james sherk if he thinks foreign corporations have an advantage because many of their governments handle healthcare? >> not necessarily. i'm from canada so canada you've got the nationalized healthcare and so the argument is if you look at the numbers in canada, you have lower costs. the reality is that canada has much higher taxes than the u.s.

it's not free. somebody pays for it. as milton freeman once said, there is no such thing as a free lunch. >> you've seen the headlines about the president talking about his debt reduction plan. here's one of the headlines in the "wall street journal," they make the point that nearly half of this $3.6 trillion proposal will come from taxes. i want to show a piece from john boehner just under a minute, he clearly says the tax increases are off the table while, if you look at the headlines, tax the president's standpoint are very much on the table. let's take a look. >> tax increases, i think, are off the table, and i don't think they're a viable option for the joint committee. it's a simple equation. tax increases destroy jobs. and the joint committee is a jobs committee. its mission is to reduce the deficit that's threatening job creation in our country and we should not make its task harder by asking it to do things that will make the environment for job creation in america even

worse. i hope the president will meet this standard. when he puts forth his recommendations for the joint committee next week. when it comes to producing savings to reach the $1.5 trillion target, the joint select committee has really only one option, spending cuts and entitlement reform. the joint committee can reach deficit reduction by reforming entitlements and taking real action to preserve and strengthen social security, medicare and medicaid. >> connect all this if you can back to job creation in the country. >> the idea that any tax increase will kill jobs defies volumes of economic evidence. we've had much higher tax rates in the united states, in the 1990's, in the 1950's, 1960's and 1970's, we've had strong growth. we can point to countries around the world with higher tax rates with good economies and strong growth and lower unemployment rates so the idea that you can

never raise taxes is kind of silly. >> even keynesian economic theory say if you raise taxes, you have an effect in terms of reducing demand. america's had the strongest economy in the world for a long time and part of that has been because of our lower taxes and more attractive climate for investment and risk making. the research shows when you raise the taxes, you get fewer business start-ups and those start-ups that do occur hire fewer workers. if the government is going to be taking more and more of the wealth, there's more incentive to take the risks. >> maria is on the line from new jersey, independent, good morning. caller: good morning. i just wanted to say that i

wanted these gentlemen to tell me when you're going to have honesty about the dragon in the room. the dragon in the room is globalism and what we're getting is window-dressing. president obama said he had no silver bullet. he has three that i can think of. he can state the six months' notice, trade agreements unfavorable to our country and get the consent of the senate and would have immediate results. he could agree that the federal which has been gambling with our money, should be and if necessary, abolished, and the third thing is, he could call back all of our troops from these wars of adventure and put them on our borders. actually, it's common sense. we have to be self sufficient. globalism and the idea of international gangsters and

fascists is ruining our country and i think interest other people, even ron paul, have had pieces of this that address it, but until everybody agrees this is madness, we're not going to get anywhere. i appreciate your comments. >> the united states actually ranks last in the share of its work force employed with small businesses. but in terms of what the caller's comment, i think globalism is of course a mixed story. we've had gains. we also have big losses. my biggest concern is the trade deficit because that creates a fundamental imbalance in the economy. there is no way around it, if you have a large trade deficit, somewhere around 600 billion a year, 4% of g.d.p., that means you either have to have negative public savings, that means the budget deficits everyone is so unhappy about, or negative private savings, the zero

savings rate we had at the peak of the housing bubble. there is no alternative. that's logically true. the way to get the trade deficit down is you lower the value of the dollar, make u.s. exports more competitive, u.s. domestically produced goods will be purchased instead of imports. if we got our trade deficit close to balance, that would create four million manufacturing jobs. first and foremost, you want to balance trade, get the dollar down, make u.s. goods more competitive in the world economy. >> herbert hoover tried this, passing the smoot holley tariffs, very destructive to the economy. economists look back and say we shouldn't have done that, the smoot holley tariffs and shutting down international trade was bad for the economy. free trade is where economists of all stripes.

with comparative advantage, gains from trade, both nations are better off and i think shutting down trade or trying to severely restrict trade wouldn't work any better than now than it did in the '30's. >> doris, welcome to the program. caller: for "washington journal," i have -- i have a comment but first i want to say you have the heritage foundation on. some weeks you have the heritage foundation and the cato institute. are these your new best friends going here? and heritage guy said that one third of businesses said it was healthcare? i read that same thing. two-thirds said lack of demand. the rich do not invest in america. they invest in "emerging markets." those are in china and india. and then they want to say

they're not committing class warfare, they refuse to take away subsidies for corporate jets that would bring in $3 billion but cut the w.i.c. nutrition program for infants and children by $830 million, so who's committing class warfare? >> i think there's a lot of room in the tax code to improve it, lower the overall rate, but eliminate some of the deductions that are less efficient. that's, again, something both the speaker and the president have said they're interested in doing and i think that could be quite helpful. but in terms of the broader point, who is it who creates jobs? entrepreneurs and investors taking risk in america. there's an awful lot of investment that takes place in this country and we want to encourage more of that. you can have a policy that says the role of government is to

redistribute wealth and take money away from successful investors and entrepreneurs. this will not encourage more in thiso create wealth country. you can do one or the other but doing both at once, you're pushing and pulling at the same time. >> all of our guests, or friends, if you want to use that word, we try to get a balanced opinion on the air as we're doing this morning. keep watch and watch over time, you'll find that out for yourself. want to dig in while we have these last couple of minutes, a little bit more on regulations. dean baker,eal get your response to what "the washington post" is reporting. something called the r.e.i.n.s., regulations from the executive in need of scrutiny act. they require congressional vote with major regulations with impact over $100 million and "the washington post" reports that 50 to 100 major regulations

are enacted annually. let's hear more from speaker boehner. >> we'll pass the r.e.i.n.s. act, requiring congressional review for any regulation that has a major impact on our economy. house committees have identified dozens of job crushing regulations keeping our economy from producing jobs. we'll repeal the 3% withholding rule which serves as an effective tax increase on those who do business with our government. we'll stop accessive federal regulations that inhibit jobs in areas varied as cement to farm dust. >> job crushing regulations. >> there's a long history of blowing up the negative impact of various regulations, most of which 7 -- serve important health and safety purposes. my favorite is the clean air act

passed in the 1990's. some said it would cost millions of jobs. a study was done and they looked at the industries that were supposed to be worst affected and they had more job growth. the environmental protection found the gains were in the trillions in terms of better health. we have a million people alive because of the onerous regulation that didn't kill a lot of jobs but kept people alive. >> explain something the speaker mentioned, the 3% withholding rule and why it's so important. this is from "the hill," the 3% withholding rule requires federal, state and local governments to return 3% of the taxes. as we read, the president wants to delay this by a year and republicans want to eliminate it.

why is this important? >> the problem with this regulation is it's forcing small businesses to give a loan to the federal government. you perform services, obviously you have to pay your workers, pay for the materials, but the government gives you 97% of what it would pay you. at the end of the year, you get the final 3% so you have to borrow money in the interim and you're giving a no-interest loan to the government. it's a great deal if you're the government but we shouldn't be turning to small businesses to give that sort of forced financing. >> the problem with noncompliance with taxes by small businesses and i don't want to pay higher taxes because small businesses are trying to rip-off the government and this is a way of getting a foot in the door. we have a track record and they have to pay their bill. most of us pay our taxes with our paycheck so we're not asking small businesses workers aren't already doing. >> bradford, p.a., frank, republican, good morning. caller: good morning, carl. we need an industrial policy.

ask yourself a couple of questions. do you think, if apple computer had to pay $10 a -- $10,000 a year healthcare, they'd have 300,000 jobs in china? i can remember when g.e. employed 200,000 people in this country. i worked for them. we did fight healthcare. today, if they brought 20,000 jobs back, healthcare would put them out of business. we do need an industrial policy and on the deficit, i'm old enough to know you paid 70%. we did not have a $30 trillion deficit after world war ii. probably eisenhower and f.d.r. would have warren buffett and dick cheney waterboard a couple of guys like norbert. the country's too important.

we should have national interests. about me making money. i've made plenty of it and i pay taxes and just sent $15 grand in for my quarter. first off, on the deficit, the reason why we have large deficits today is because the economy collapsed. we didn't have large deficits in the 2007 and 2008. it was when that is really clear, and one of the things that amazes me is how much distortion there has been, with both parties. president obama says he inherited a trillion-dollar deficit paid he inherited that because the economy was collapsing. our per-person health care costs are more than twice the average of other wealthy countries. take the average for germany and canada and whoever else, we are taking twice as much per person. that is the same thing as a tax. how was it different if money goes out the door for health care as if the government taxes it? for businesses, it is money out

of their pocket. guest: there really isn't anything the government can do that will bring back the manufacturing jobs. it is automation, technology. because we have these new computers come we can do the same work with fewer workers doing it. if you are one of the guys on the assembly line -- if you are one of the guys who operates the machines, great for you. if you are one of the guys on the assembly line, not so much. there's not much that government can do to interfere with that. china has fewer manufacturing workers today than in the mid- 1990's, because they have had the same process of bringing in productivity improvements. the goal should be, how to be open up additional jobs for workers displaced by technology? one place to look at that would be on the occupation licensing, removing the domestic barriers to competition we have erected in the country. -- in the economy. there's not much the government can do to roll back the process of automation. guest: well, again, i think the main issue, i mentioned before, with the trade deficit, we don't want to roll back automation, but we can create 4

million manufacturing jobs if we add something close to balanced trade. most of our deficit is in many record goods. -- manufactured goods. jim and i were talking before we came in here. we don think b -- don't think barbers have to be licensed. host: go ahead. johnny is on the independent line. caller: my question is for james. i spent 26 years in the military. i want to know how clinton created 22 million jobs during his time. he raised taxes. bush reduced taxes and lost 8 million jobs. can you answer that question? you are talking out of both sides of your mouth. guest: thank you for your service to our attention.

-- to our country. whatever are less rigid political disagreements, thank you for that. -- whatever our political disagreements, thank you for that. president clinton took office when the economy was recovering from a 1991 recession. president bush took office at the peak of the attack bobbled bubble as it was collapsing. those job losses were at the start of his watch. at the same time, you have a slowing down of the job growth. the issue was you did not have as many workers entering the workforce so you did not have the same number of jobs being created under bush and clinton. host: we have more from speaker boehner as a look at republican proposals for job creation. the speaker is talking about tax credits. >> there are two other components. one is the current tax code that discourages investment and rewards special interests.

at a time when is clear of the tax code needs to be reformed, the first instinct to come out of washington is to come out with a new host of tax credits that make the tax code more complex. host: dean baker, let's hear from you first on the idea of tax credits. and again, connect this back to job creation. guest: there are a lot of things you could do that would make it more efficient and fair. if you look at the mortgage interest deduction, the vast majority of the benefits go to high income individuals. it seems like you would want to cap it at a lower amount around $450,000. make a credit rather than a deduction. if you are in the 36% bracket, if you are paying $20,000 in mortgage interest, that is

picked up by the government. naked a credit -- make it a credit and cap it. i think it would be much fairer and cheaper. guest: i agree. the tax code is a mess. we should be removing credit deductions and lowering the overall rate. in terms of the broader point of the tax credits, europes has had 8% unemployment for the last generation. if you are in france, 9% unemployment is the sun rising every day. i think we should learn from their experience. if you offer a tax credit, it affects who gets the job. it does not affect the number of jobs that it created. they may pick one person over another because one has a tax credit attached. guest: the record of europe is next.

-- mixed. germany has 6.5% unemployment. the northern european countries like sweden and denmark have less than 5%. they generally have lower unemployment than the united states. so it is a little quicker to paint a single tarbrush across europe. europe has had some countries with high tax rates that have still had good productivity growth and low unemployment that is better than the u.s. host: james sherk, you are from canada. a message from twitter. they want you to explain something about canada. this person says high taxes with national health care. how was it doing in the recession we have here? guest: can get is a resource- based economy at a time when we did canada is a resource-based economy at a time when prices are rising. guest: like texas. guest: exactly, exactly. you have the mineral resources. their economy is doing quite

well. they did not have the same housing bubble we did. they do not have to recover from that. some credit is due to the conservative government. i think most of it is the big fortune they have had of the way their economy is diversified. host: john, a democrat, good morning. caller: i wonder if you are having a hard time explaining this because you are fighting against the american public's lack of understanding of the issues. an example is talking about with our currency auctions. -- our currency functions. i imagine all lot of people still imagine we live on the gold standard for our currency. they do not understand how piat currency works. then they have political discourse and talk about just printing more money like it is the end of the world. well, that is what the government always does when you have a fiat currency.

it prints money. i wonder if you feel like you are struggling against the lack of understanding of economic issues to explain your position. guest: that is a big issue. it is the job of president obama to explain to the american people. i think he has fallen down on the job. with his original stimulus package, he made some effort to save this is the issue. we had demand with the house and bubble that has disappeared. -- with the housing bubble that has disappeared. the government has to fill the hole. then he started talking about balancing the budget and how the government is like a family. it is not like the family. it is like a corporation. they will probably barrault -- borrow forever. at some point, they may go out of business. -- they will probably borrow for ever. at some point, they may go out of business. the chairman will come to the board and said that their profits are higher this year.

the idea that the government is like a family is wrong. it is a difficult thing to explain. someone spent -- semi-speech from roosevelt where he is laying out that argument in 1936 -- someone sent me a speech from roosevelt where he is laying out the argument in 1936. i wish president obama would take this lesson and picked up a ball. -- and pick up the ball. host: go ahead. caller: last tuesday, there was excellent testimony given before the house committee on job creation by a man named peter scheff. he had a book that predicted much of what is going on in the economy today. he is brilliant. he just started a radio show on the internet. scheffradio.com.

if you are interested in what is going on in our economy today, tune in to his show. it airs at 10:00 eastern standard time. it is free. schieffradio.com host: richard is on the line for independents. caller: president obama's policies have been poisonous for our economy. the tax policies will not work. the economy is taxed way too much. president obama lost their gory presented a budget to congress -- president obama last february presented a budget to congress. -- to the senate. it was voted down. 97-0. every democrat and republican voted against his budget. the health care bill needs to be repealed. there are over 3000 companies

right now on waivers because they cannot do business with the health care bill. president obama said his bill would make it energy costs go through the ceiling and they have. when he came into office, gasoline was a $80 cents a gallon. now it is $3.50 a gallon. -- when he came into office, gasoline was $1.80 a gallon. now is $3.50 a gallon. small business is not help at all. we are losing business is overseas every day. guest: gas was $4 a down one president bush was in office. you can -- gas was $4 a gallon when president bush was in office. you can play games with gas prices. kasich shot up and -- gas shot up in prices because of the

unrest in libya. i think it is silly. in terms of small businesses and health care, there is the survey of businesses for decades. they asked about the major obstacles. overwhelmingly they say is demand. one of the choices is regulation. roughly the same numbers save regulation under president bush. -- roughly the same numbers said regulation under president bush. they do not say regulation when they're given a choice. maybe when it is time to vote for president obama, they will say that. that is for political purposes and not the way they conduct their businesses. guest: 25% say that is the greatest obstacle the next one is regulation. 25% of businesses are picking what the government is doing to them. either the tax code or through the bureaucracy. they say that is the single greatest obstacle. 25% are picking poor sales. in this economy, more people are saying that government is the

problem. that tells you it is time to roll back some of the red tape. guest: they also said that under president bush. host: let me jump in and get one more piece of tape from speaker boehner. he talks about spending. >> i am not opposed to responsible spending to repair and improve our infrastructure. if we want to do to support long-term economic growth and job creation, let's link the next highway bill to the expansion of american energy production. removing unnecessary government barriers that prevent our country from utilizing the vast energy resources we have and creating millions of american jobs along the way. host: let's hear from james sherk 1st. guest: want to be increasing domestic energy production. we have 800 billion barrels of oil we could be recovering but

we are not because of bureaucratic obstacles on the gulf coast. i think it makes a lot of sense. we will repair bridges if they are falling apart. i do not think it should be viewed as stimulus. you are taking money from one part of the economy and moving it to another. you are not improving things. a lot of the infrastructure projects were hiring away from other companies and not hiring the unemployed. the skills needed for infrastructure are different from those needed in general construction with the unemployed. it has not been that much of a boost to growth. guest: the study found it did reduce unemployment substantially where the stimulus was spent. you have stories of people jumping around that would have been hired anyway. talking about drilling for oil,

this is a very skilled occupation. there is a limited number of people with those skills. it poses enormous and our mental harm and does not create a lot of jobs. think of the bp spill. and such a pristine environment, it will take thousands of years to repair the damage in the arctic zone. i would like to leave something for our kids. it does not do a lot for the economy and does a lot of potential harm to the environment. host: let's look back philosophically. let's get in response to this question. what is the job of the corporation? to create jobs or grow? guest: they are there to make money. it is not what i might think of them or what i want them to do. it is our responsibility as policy people to insure the ways they make money are going to be good for the country as a whole. guest: more or less, i would agree. corporations produce goods and services. they do it because of the competitive marketplace with the fewest resources used. there is more to produce other things.

we want to reduce unnecessary barriers to creating the wealth. we do not want to be putting up roadblocks for businesses that can create wealth. host: the next call is from florida, michael, a democrat. caller: mr. boehner said something about a cement plants -- va cement plants shutting down because of regulation. thank god for regulations. i am a retired truck driver. the 9/11 responders, they are having so much trouble because the chemicals in cement never die matter how long a building has been up. the dust and chemicals from the planes for what they are suffering from. the bush tax cuts are still in. bush said the war would be paid for by the oil that we went into iraq for.

small businesses will not give health care. thank god for the health care plan. you can work in a small business. it will ensure some people and not others. host: we have time for one final comment on the path for job growth. guest: you want to give the government out of the way. the definition of insanity is trying the same thing over and over again expecting different results. we tried the stimulus. it did not work. it has not been successful. i think we should be trying a new path of reducing the barriers to business success and reducing the risks job creator space. -- job creators face. guest: i was going to say the same thing. my reading of the evidence on stimulus is that it worked. you cannot contract loss of -- counteract a loss demand with

the stimulus. it is not the right size. host: thank you to dean baker and james sherk. we appreciate your time. >> in a few moments, president obama outlines his plan to cut the deficit. then details from that plan from tim g-8 and jack lew. and then a discussion of bipartisanship and the climate of the fight in an -- in the climate of divided government. and then what republicans are planning for the economy and jobs. a couple of live events to tell you about tomorrow morning. at 10:00 eastern, the joint economic committee holds a hearing on the federal debt and the u.s. economy. that is here on c-span. on our companion network c-span 3, a former white house budget

director alice rivlin testified about job creation before the senate but in -- budget committee. that is at 9:30 a.m. eastern. to cut the deficit, president obama is calling for $1.5 trillion in new taxes as part of it $3 trillion deficit reduction package. speaking at the white house, he also said he would veto any plan to cut medicare benefits but did not raise taxes on the wealthy. this is 20 minutes. >> good morning, everybody. please have a seat. a week ago today, i sent congress the american jobs act. it is a plan that will lead to new jobs for teachers, for construction workers, for veterans, and for the unemployed. it will cut taxes for every

small business owner and virtually every working man and woman in america. and the proposals in this jobs bill are the kinds that have been supported by democrats and republicans in the past. so there should not be any reason for congress to drag its feet. they should pass it right away. i am ready to sign a bill. i have got the pens all ready. now, as i said before, congress should pass this bill knowing that every proposal is fully paid for. the american jobs act will not add to our nation's debt. and today, i am releasing a plan that details how to pay for the jobs bill while also paying down our debt over time. and this is important, because the health of our economy depends in part on what we do right now to create the conditions where businesses can hire and middle-class families can feel a basic measure of economic security.

but in the long run, our prosperity also depends on our ability to pay down the massive debt we have accumulated over the past decade in a way that allows us to meet our responsibilities to each other and to the future. during this past decade, profligate spending in washington, tax cuts for multi- millionaires and billionaires, the cost of two wars, and the recession turned a record surplus into a yawning deficit, and that left us with a big pile of iou's. if we do not act, that burden will ultimately fall on our children's shoulders. if we do not act, the growing debt will eventually crowd out everything else, preventing us from investing in things like education, or sustaining programs like medicare. so washington has to live within its means. the government has to do what families across this country have been doing for years. we have to cut what we cannot

afford to pay for what really matters. we need to invest in what will promote hiring and economic growth now while still providing the confidence that will come with a plan that reduces our deficits over the long-term. these principles were at the heart of the deficit framework that i put forward in april. it was an approach to shrink the deficit as a share of the economy, but not to do so so abruptly with spending cuts that would hamper growth or prevent us from helping small businesses and middle-class families get back on their feet. it was an approach that said we need to go through the budget line-by-line looking for waste, without shortchanging education and basic scientific research and road construction, because those things are essential to our future. and it was an approach that said we should not balance the budget on the backs of the poor and the middle class.

that for us to solve this problem, everybody, including the wealthiest americans and biggest corporations, have to pay their fair share. now, during the debt ceiling debate, i had hoped to negotiate a compromise with the speaker of the house that fulfilled these principles and achieved the $4 trillion in deficit reduction that leaders in both parties have agreed we need -- a grand bargain that would have strengthened our economy, instead of weakened it. unfortunately, the speaker walked away from a balanced package. what we agreed to instead wasn't all that grand. but it was a start -- roughly $1 trillion in cuts to domestic spending and defense spending. everyone knows we have to do more, and a special joint committee of congress is assigned to find more deficit reduction. so, today, i am laying out a set of specific proposals to finish what we started this summer -- proposals that live up to the principles i have talked

about from the beginning. it is a plan that reduces our debt by more than $4 trillion, and achieves these savings in a way that is fair -- by asking everybody to do their part so that no one has to bear too much of the burden on their own. all told, this plan cuts $2 in spending for every $1 in new revenues. in addition to the $1 trillion in spending that we have already cut from the budget, our plan makes additional spending cuts that need to happen if we are to solve this problem. we reform agricultural subsidies -- subsidies that a lot of times pay large farms for crops that they do not grow. we make modest adjustments to federal retirement programs. we reduce by tens of billions of dollars the tax money that goes to fannie mae and freddie mac. we also ask the largest financial firms -- companies saved by tax dollars during the

financial crisis -- to repay the american people for every dime that we spent. and we save an additional $1 trillion as we end the wars in iraq and afghanistan. these savings are not only counted as part of our plan, but as part of the budget plan that nearly every republican on the house voted for. finally, this plan includes structural reforms to reduce the cost of health care in programs like medicare and medicaid. keep in mind we have already included a number of reforms in the health-care law, which will go a long way towards controlling these costs. but we are going to have to do a little more. this plan reduces wasteful subsidies and erroneous payments while changing some incentives that often lead to excessive health-care costs. it makes prescriptions more affordable through faster approval of generic drugs.

we will work with governors to make medicaid more efficient and more accountable. and we will change the way we pay for health care. instead of just paying for procedures, providers will be paid more when they improve results -- and such steps will save money and improve care. these changes are phased in slowly to strengthen medicare and medicaid over time. because while we do need to reduce health-care costs, i am not going to allow that to be an excuse for turning medicare into a voucher program that leaves seniors at the mercy of the insurance industry. and i am not going to stand for balancing the budget by denying or reducing health care for poor children or those with disabilities. so we will reform medicare and medicaid, but we will not abandon the fundamental commitment that this country has kept for generations. and by the way, that includes our commitment to social security. i have said before, social security is not the primary cause of our deficits, but it does face long-term challenges as our country grows older. and both parties are going to need to work together on a separate track to strengthen

social security for our children and our grandchildren. so this is how we can reduce spending, by scouring the budget for every dime of waste and inefficiency, by reforming government spending, and by making modest adjustments to medicare and medicaid. but all these reductions in spending, by themselves, will not solve our fiscal problems. we cannot just cut our way out of this hole. it is going to take a balanced approach. if we are going to make spending cuts -- many of which we wouldn't make if we were not facing such large budget deficits -- then it is only right that we ask everyone to pay their fair share. you know, last week, speaker of the house john boehner gave a speech about the economy. and to his credit, he made the

point that we cannot afford the kind of politics that says it is "my way or the highway." i was encouraged by that. here's the problem. in that same speech, he also came out against any plan to cut the deficit that includes any additional revenues whatsoever. he said -- i am quoting him -- there is "only one option." and that option and only option relies entirely on cuts. that means slashing education, surrendering the research necessary to keep america's technological edge in the 21st century, and allowing our critical public assets like highways and bridges and airports to get worse. it would cripple our competiveness and our ability to win the jobs of the future. and it would also mean asking sacrifice of seniors and the middle class and the poor, while asking nothing of the wealthiest americans and biggest corporations. so the speaker says we cannot have it "my way or the highway," and then basically says, "my way -- or the

highway." [laughter] that is not smart. it is not right. if we are going to meet our responsibilities, we have to do it together. now, i am proposing real, serious cuts in spending. when you include the $1 trillion in cuts i have already signed into law, these would be among the biggest cuts in spending in our history. but they've got to be part of a larger plan that is balanced -- a plan that asks the most fortunate among us to pay their fair share, just like everybody else. and that is why this plan eliminates tax loopholes that primarily go to the wealthiest taxpayers and biggest corporations -- tax breaks that small businesses and middle- class families do not get. and if tax reform doesn't get done, this plan asks the wealthiest americans to go back

to paying the same rates that they paid during the 1990's, before the bush tax cuts. i promise it is not because anybody looks forward to the prospects of raising taxes or paying more taxes. i do not. in fact, i have cut taxes for the middle class and for small businesses, and through the american jobs act, we would cut taxes again to promote hiring and put more money into the pockets of people. but we cannot afford these special lower rates for the wealthy -- rates, by the way, that were meant to be temporary. back when these first -- these tax cuts, back in 2001, 2003, were being talked about, they were talked about temporary measures. we cannot afford them when we are running these big deficits. now, i am also ready to work with democrats and republicans to reform our entire tax code, to get rid of the decades of accumulated loopholes, special interest carve-outs, and other tax expenditures that stack the deck against small business owners and ordinary families who cannot afford washington

lobbyists or fancy accountants. our tax code is more than 10,000 pages long. if you stack up all the volumes, they are almost five feet tall. that means that how much you pay often depends less on what you make and more on how well you can game the system, and that is especially true of the corporate tax code. we have got one of the highest corporate tax rates in the world, but it is riddled with exceptions and special interest loopholes. so some companies get out paying a lot of taxes, while the rest of them end up having to foot the bill. and this makes our entire economy less competitive and our country a less desirable place to do business. that has to change. our tax code should not give an advantage to companies with the best-connected lobbyists. it should give an advantage to companies that invest in the united states of america and create jobs in the united states of america. and we can lower the corporate rate if we get rid of all these special deals.

so i am ready, i am eager, to work with democrats and republicans to reform the tax code to make it simpler, make it fairer, and make america more competitive. but any reform plan will have to raise revenue to help close our deficit. that has to be part of the formula. and any reform should follow another simple principle. middle-class families should not pay higher taxes than millionaires and billionaires. that is pretty straightforward. it is hard to argue against that. warren buffett's secretary should not pay a higher tax rate than warren buffett. there is no justification for it. it is wrong that in the united states of america, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million.

anybody who says we cannot change the tax code to correct that, anyone who has signed some pledge to protect every single tax loophole so long as they live, they should be called out. they should have to defend that unfairness -- explain why somebody who's making $50 million a year in the financial markets should be paying 15% on their taxes, when a teacher making $50,000 a year is paying more than that -- paying a higher rate. they ought to have to answer for it. and if they are pledged to keep that kind of unfairness in place, they should remember, the last time i checked the only pledge that really matters is the pledge we take to uphold the constitution.

now, we are already hearing the usual defenders of these kinds of loopholes saying this is just "class warfare." i reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or a teacher is class warfare. i think it is just the right the thing to do. i believe the american middle class, who've been pressured relentlessly for decades, believe it is time that they were fought for as hard as the lobbyists and some lawmakers have fought to protect special treatment for billionaires and big corporations. nobody wants to punish success in america. what is great about this country is our belief that anyone can make it and everybody should be able to try -- the idea that any one of us can open a business or have an idea and make us millionaires or billionaires. this is the land of opportunity. that is great. all i am saying is that those who have done well, including

me, should pay our fair share in taxes to contribute to the nation that made our success possible. we should not get a better deal than ordinary families get. and i think most wealthy americans would agree if they knew this would help us grow the economy and deal with the debt that threatens our future. it comes down to this. we have to prioritize. both parties agree that we need to reduce the deficit by the same amount -- by $4 trillion. so what choices are we going to make to reach that goal? either we ask the wealthiest americans to pay their fair share in taxes, or we are going to have to ask seniors to pay more for medicare. we cannot afford to do both. either we gut education and medical research, or we have got to reform the tax code so that the most profitable

corporations have to give up tax loopholes that other companies do not get. we cannot afford to do both. this is not class warfare. it is math. [laughter] the money is going to have to come from someplace. and if we are not willing to ask those who've done extraordinarily well to help america close the deficit and we are trying to reach that same target of $4 trillion, then the logic, the math says everybody else has to do a whole lot more. we have got to put the entire burden on the middle class and the poor. we have got to scale back on the investments that have always helped our economy grow. we have got to settle for second-rate roads and second- rate bridges and second-rate airports, and schools that are crumbling.

that is unacceptable to me. that is unacceptable to the american people. and it will not happen on my watch. i will not support -- i will not support -- any plan that puts all the burden for closing our deficit on ordinary americans. and i will veto any bill that changes benefits for those who rely on medicare but does not raise serious revenues by asking the wealthiest americans or biggest corporations to pay their fair share. we are not going to have a one- sided deal that hurts the folks who are most vulnerable. none of the changes i am proposing are easy or politically convenient. it is always more popular to promise the moon and leave the bill for after the next election or the election after that.

that is been true since our founding. george washington grappled with this problem. he said, "towards the payment of debts, there must be revenue. that to have revenue there must be taxes. no taxes can be devised which are not more or less inconvenient and unpleasant." he understood that dealing with the debt is -- these are his words -- "always a choice of difficulties." but he also knew that public servants were not elected to do what was easy. they were not elected to do what was politically advantageous. it is our responsibility to put country before party. it is our responsibility to do what is right for the future. and that is what this debate is about. it is not about numbers on a

ledger. it is not about figures on a spreadsheet. it is about the economic future of this country, and it is about whether we will do what it takes to create jobs and growth and opportunity while facing up to the legacy of debt that threatens everything we have built over generations. and it is also about fairness. it is about whether we are, in fact, in this together, and we are looking out for one another. we know what is right. it is time to do what is right. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> details of the president's plan to cut the deficit were outlined by treasury secretary tim geithner and the budget director. they spoke for a half-hour at the white house. >> give people a minute to get up good morning. thanks for coming to the white house for your daily briefing. i have with me today secretary of the treasury 10 geithner on my left. on my right, jack lew, director of the office of management and budget. we are here to answer questions about the president's plan for

growth and deficit reduction. jack and tim are here to speak to your specific questions. after they are done, if you could just keep on topic with them, i will remain to take your questions on other issues. >> why did the president put forward a plan with tax increases the republicans rejected before the speech in the rose garden? >> we have a long-term deficit problem. we have to bring that down to earth. we agree in the magnitude of cuts and changes over time. four trillion dollars is what you need to bring the deficit down to a level we can sustain over time, a level where debt as a share of the economy is stabilized. the debate we are having is how best to do that. but the president laid out is a balanced package of reforms on

all parts of the government, combined with some modest reforms to our tax system designed to make our country more competitive and make sure the most fortunate americans are paying a greater share of their income in taxes. this is about a choice. what role the one government to play in the economy? how do we make sure we live within our means? we need to strengthen the economy in the short term and reserve room for investments in the long term. to do that, you have to figure roadways to reform our tax system, to make it more competitive and more fair. we need good policy, good economic policy. we think they are better than the alternatives. >> could you explain more about how the buffet rule would work? none of the materials spell out any revenues are details.

it seems like an important part of the plan he tried to emphasize. >> what the president has proposed is that congress shape comprehensive reform of the individual and corporate tax system, so we are not only making our country more competitive, but we ask the most fortunate americans to pay a larger share of their income in taxes. the basic principle of the heart of the buffet principal is that if you were among the fortunate few in the united states, we should make sure, you pay as a shared income in taxes -- at a share of income in taxes, what a middle-class family pays. how you do it depends on what you do with the broader tax system as a whole. we will not give the congress a detailed proposal now, because there are different ways. the basic foundation of tax reform -- we are going to fight to make sure that is part of

what congress considers, and ultimately voters. >> what is the specific plan? how much revenue are you trying to raise overall? >> we are having a debate about whether you should try to reform the overall system, corporate and individual, or should try to get more revenue out of the current system. the president laid out specific changes for individuals and corporates. i think the best of the jeep for the country is to try to reform the overall system, so we are bringing rates down. we are eliminating wasteful subsidies and preferences. we're helping contribute to deficit reduction, but make the economy more competitive in the long run. we are going to make the system more fair than it is today. we think that is the best way to go, and we think it is better

than the alternatives. >> my i ask you about the european crisis? you said that iraq has the firepower. is there the political will there? is this going to spill over to the u.s. economy? >> europe is over -- is obviously under a lot of pressure. it is affecting us. it is affecting confidence around the world, not just europe. we have a huge stake in helping them deal with those. it is not in the interest of the united states for europe to be weakened by a protracted financial crisis. we are working closely with them, being supportive as they try to craft a strategy. is there political will? i believe there is. this is within their capacity to solve. i think you will see the leaders of europe do what they been doing over the last several

months. they are trying to reassure the world they have the political will, not just the economic capacity. it is in the interest of the united states for them to do that. >> the expiring bush tax cuts for the wealthy -- that is a savings of $800 billion. what about lifting the rest of the tax cuts expire? >> we started from what would be the consequence of having all of it be extended. then we said the top rates should not be extended. we have now projected the impact on the deficit and the debt of having the middle-class tax cuts continue. a balanced approach would give you the ability to let the middle-class tax cuts continue. it would bring our deficit down

to 2.3% of gdp, instead of climbing into a dangerous range. we put in the baseline the assumption that would be done. it is factored in. >> are you maintaining that $1.50 trillion in tax increases, all of which would be in the top two tax brackets, will have no adverse impact on job creation? >> our proposal is, through comprehensive tax reform, individual and corporate, to make the current tax system of the united states better for investment, but for growth, and more fair to average americans. if congress were to meet those basic principles, i am very confident that the modest changes we are suggesting would make the economy stronger in the

long term, not weaker. not if you want to do it carefully. it is important that we find a way to make this tax system better for growth, but for the united states. remember, we are a very large economy. we are talking about estimates over 10 years. $1.50 trillion in revenues, relative to what would happen if you just extend all the bush tax cuts, is roughly 1% of the entire output of the american economy over that time. it is a modest change. if you do it sensibly, it you will make growth in the united states stronger. it will make people more confident in the future and more likely to invest here. >> there is a splashy book out this week which portrays you as a kgb political operator. i know you're going to take

issue with your portrayal. >> those would not be my words. [laughter] there was a memo written in february 2007 but a white house insider, speaker brown, which looks -- peter brown. it looked at the economic team in the white house. it does say once a decision is made, the department of the treasury has at times been slow and uneven. i wonder if that reflects execution of the policy process. >> i disagree with that characterization. i have not read this book. to borrow a phrase, i live the reality. the reports i have read about this book, they bear no

resemblance to the reality we live together, no resemblance. >> specifically, on the president of's effort to revalue banks, did you slow that? >> i would never do that. i have spent my life in public service. it is my great privilege to serve this president. i would never contemplate doing that. i lived the original. the reality i lived baird no -- bears no relation to the stories i heard reported from that book. >> the present has been talking about everyone paying their fair share. when you are counting a trillion dollars in savings, and the president said he was not going to keep troops in the war, and do not have major structural changes to medicare, like the age changing, but are raising

taxes on the ridge, where is the pain and sacrifice? >> there is a lot of pain. it is spread broadly and fairly. there is no doubt there are going to be siblings presented to congress. the republican budget in the house took account of them. at a time when we just enacted spending caps, this is looking the back door and making very real that we are on a downward trajectory. just to remind everybody, in august the president signed spending caps which will bring spending to the lowest level since eisenhower was president. it is real policy to bring down that spending. on the question of no structural

change, i think if you look at the details in here, there is real structural change. there are meaningful savings in many areas. in health care, there are serious changes that affect both what we pay to providers and in terms of the structure of benefits and the incentive for savings in the long term. while we did not raise the retirement age, i will not raising the retirement age is not something reduces costs. it just determines whether the government is going to pay them. there are a number of provisions that will mean beneficiaries will have a different set of incentives. right now, if you are on medicare and you take out a policy to protect you, the extra cost that comes from that is completely distributed to the system. we're saying it ought to be built into the premium you pay. we have deductions on home care

services. this is not the stuff you would choose to do if you were not putting your belt. we do it in a fair way. we say it is point to affect new retirees and will take effect after 2017. over 20 years, it is substantial savings. outside of health care, there is a host of savings, whether in farm programs, federal employee retirement, health benefits military retirees get -- in the normal budget environment, this would be $257 billion of pain. i urge you to look at the details. the president put out a plan that is balanced. he said we should not ask unfairly those who are retired to pay the burden. we should not ask unfairly farmers or federal workers. we should ask everyone to share the sacrifice. the tax piece is part of it. >> speaking about social security specifically, the president by his admission has

said this is a program the needs to be looked at. it was talked about during the debt ceiling debate. why isn't it part of this package? >> the president put out a plan that would reach the goal for a trillion dollars of savings. it gets us to a sustainable level. he put together a plan that accomplishes the goal in the way he thinks it the right balance way to do it. obviously over the summer, we were in a different context. we were in negotiation with the president made a serious effort to reach agreement on a broad range of issues. when it became clear there was no willingness on the other side to take the bounds approach to revenue, we went back to put together a plan that reflects our view of how to do it. our president has made clear

that social security is not the principal driver crossing the deficits we are facing. our real challenge is to have a balanced approach, without slashing benefits, the would protect the program. he remains open to working on a bipartisan basis to do that. it does not belong here, but it is a subject for future discussion. >> the president has said the jobs plan is insurance about going into a double-dip recession. how much concern to you have about a double-dip recession? >> let me reinforce what the president said. the jobs plan is very much a part of this proposal. the $447 million in spending would go both to reduce the tax burden on working americans and businesses that make hiring decisions, in terms of creating jobs and preventing the layoffs of teachers, firemen, and policing, in terms of the construction on highways. that is paid for.

all the deficit reduction we are talking about is after paying for that. i think it is a prudent thing to do at a time when the economy is still not where we want it to be. we are not in a double-dip recession. we are not at a point of the robust recovery to bring employment to the levels the american people expect. this plan, including the jobs plan, would be part of that. >> do you believe the president would veto any bill that does not have revenue, or only involves cuts? >> i think the president's statement, if you look at it, speaks very clearly. he said he did not support a bill that he thinks is unfair and unbalanced. he said he would veto a bill if it cut benefits that people are relying on for medicare without a balanced component. >> this is a situation where you have an end product that does not have any revenues in it.

>> i do not want to address a but the calls. the president is sending to congress a balanced, comprehensive plan that gives a blueprint as to how to solve a problem that would get as pointed in the right direction, in terms of fiscal policy. we think this is how to do it in a balanced way. >> can you explain whether the buffet will is another example of amt? >> the benefit principle is like thinking about -- the buffet principle it is like thinking the that the americans who make over a million dollars should pay a minimum level that is no lower than that paid by a middle-class family. there are lots of different ways to do that. i would not call it what you called it. i would call it what i said. but it is sensible. why should we -- we are in a

tough. in the country. -- we are in a tough time in the country. why should you say to the american people we're going to solve our long-term fiscal problems by adding to the burden of the middle-class, or by letting the most fortunate americans pay a smaller share of their income than the average family? i do not think it makes sense. we are proposing something basically fair. we think it is good economic policy. think about it again. if you try to return this country to living within our means, to restore the basic soundness of fiscal projector to the united states, without modest increases in revenues, you are just adding to the burden of the people that have already borne the burden of this crisis. there has been a long time of low growth in median incomes. we think it is better than the

alternatives we are seeing. >> are you able to say what the buffet rule tax rate would be? >> it depends on what happens to be tax reform. we are proposing it depends on the overall result of the options, the alternatives you look at in tax reform. the president's principles are that you want to lower marginal tax rates, clean up and eliminate all the wasteful subsidy spending in the tax code, had make incentives for investing in the united states stronger so we're more competitive over time, bring down the long-term deficits and as part of that, make sure the system is more fair. how you achieve that principle, the buffett principle, depends on the shape of the basic reforms. >> could you clarify what the president said on bank -- maybe i missed it last night. inthat's a proposal we had president the's budget back in february and that proposal is designed to make sure that if

there are any losses from the emergency actions we took to put out the financial fires of 2008 and 2009, that we recover those losses in the form of a fee on the institutions that benefited most directly from those programs but that's been a long-standing proposal in our budget. >> that was in the president's budget in february. >> this wouldn't add to revenues but make you whole from t.a.r.p.? >> if congress did not legislate a fee like this, then if we ultimately realize losses in the emergency programs, those would add to the deficit. so by proposing this fee, we try to make sure that doesn't happen and that's a very important principle underscored financial reform from the beginning which is that the largest institutions that benefited the most directly from the financial emergencies bear the costs of the resolution.

>> do you have an estimate of how many millionaires currently pay an effective tax rate that's lower than, say, 28% or a middle class tax rate? >> you'll find the world rich in examples and illustrations about what average effective tax rates are as you go up the income chain but it depends on what your profession is. there's lots of people who make more than $1 million a year whose income is in the form of wages and salaries and they pay higher tax rates but a lot of people's income expects predominantly in the form of dividends. so it depends on the specific circumstances you face and the averages won't capture that. >> there are special interests in washington trying to calculate whether there would be better off if there's gridlock. can either of you comment, what

would be the risks as the president sees it or the downside looking ahead at that prospect? >> i don't know any serious policymakers on either side of the aisle who think sequestration is a good place to go. it was designed to be something that would have bad consequences wherever you look because it is not a set of policies but across-the-board cut. it would lead to cuts in domestic programs, defense and medicare that are not based on specific policy decisions but just taking a slice off of everything. undoubtedly, there are interests in washington who can figure out what that percentage is and say rather than lose something that isn't adding to the general economic wellbeing, i will oppose, you know, the specific things that hurt me and have this kind of broadly shared pain. i haven't heard republicans or democrats in positions of

authority advocate that. i think that if you look at where we're headed, right now we have a joint committee working towards a target of $1.5 trillion of deficit reduction. i think that is something they see as being their job because the $1.2 trillion of sequestration would be bad. the president is saying today, that's a minimum, but that's not the right end point, that would not get us to a place where the deficit as a percentage of the economy and debt as a percentage of the economy would, in the way we should, address the program problem. what he's putting forward today is a balanced plan. it's going to mean picking and choosing and making choices so we've tried to do it in a way we think is balanced and fair and reflects serious set of policy judgments and is not a mechanical spread pain everywhere even where it shouldn't belong which is what sequestration, by design, does. >> mr. secretary, what do you

think standard & poor's reaction will be to this number in terms of their concern of $4 trillion and the downgrade? >> i don't know. but i would say that if you step back and look at the basic economics or the financial requirements, what we're trying to do, what this proposal does is meet the critical test of restoring financial soundness to the united states of america and it's a detailed list of proposals, it would bring our deficits down as jack said to a level below 3% of g.d.p. which is a level that's sustainable over the long run because it allows the debt burden to stabilize and fall as a share of the economy. it will not solve all the problems facing the country. there are still other things we'll have to deal with as a country but all those things are going to be harder unless we put in place a set of long-term fiscal reforms that allow

americans, investors around the world, to know that this political system is able to return to living within our means. so it will meet that critical test for financial prudence, for financial soundness. >> international political question. the technical question, have you gentlemen estimated how much of a primary you need to handle the problems in the medium term? >> you're raising the economic term. primary surplus is the term that refers to revenues and expenditures being in balance without interest. so it's you're taking in as much as you're paying out except for interest. that's what primary balance refers to and for an economy like the united states, you need to have the deficit below 3% of g.d.p. to achieve that basic test. why is that test important? that's the level that stops the debt from growing as a share of the economy, you bring it below that level, then the debt starts to fall as a share of the economy. why is that important? because if we're not able do

that as a country, then growth will be weaker in the future, we'll have left the ability to meet the basic fundamental needs of the american economy going forward. that's why it's important and that's what the basic structure is. >> you're saying below 3%? >> that's the test for sustainability for the united states. >> the policy question is about the brief. in the overall context in the global situation, in europe, what do you see as the appropriate of all the countries such as the greek, not necessarily just china. >> one of the great strength of the world economy looking forward is the prospects of a longs period of rapid growth the major emerging economies including the ones you referred to, china, india, brazil, russia. we want to see that growth happen over a sustained period of time. we will benefit as a country from the realization of those very optimistic long-term growth prospects. we'll export more. you'll see more jobs created in

the united states and we expect to be major beneficiaries as a country of what we're seeing. we want to see them contribute to global growth and to do so in a way that's more balanced and fair and they're going to face different policy requirements than we in the because they're in different situations but they're a great source of strength for the global economy and the faster they grow in the future, the more we'll benefit as a country and the more balanced the global economy will be. >> just to follow up, any specific policies you would encourage them to take to help the europeans, for example? >> well, i think we all have an interest in a strong, credible resolution of the financial pressures now in europe. it's not just the united states and not just the europeans. the global economy as a whole depends on their being a sensible resolution of those financial pressures and you've seen all the nations of the

world through the i.m.f. make really very substantial contributions to the challenges ongoing in europe and that's just underscoring the stakes we all have in more growth in financial stability in europe. >> christopher, paul. >> if i may, back to the fact that the life we live in now is a borderless global economy and recovery is weak worldwide, is the u.s. coordinating economic policies and regulations with key allies to make sure u.s. businesses are not at a disadvantage in the global marketplace especially when it comes to jobs? >> a basic fundamental tenet of the president's economic strategy for this country is to do things that make us more competitive over the long run, that improve incentives for investing in the united states, that make it more likely, not less likely, that the things the world needs are made in this country in the united states of america and that requires not just better education for americans, it requires investing in innerovation, improving our long-term infrastructure but

also requires through things like tax reform changes to the incentives that affect all businesses to make us more competitive as a country so absolutely the basic -- a basic principle that guides the policies that this president evaluates, are they going to make us stronger in the long run as a place for people to build, create and invest. >> last one, paula. >> secretary geithner, you indicated that details for tax reform wouldn't really come out yet, yet there's been an indication in here that you would come forward with a stand-alone corporate tax bill if super committee doesn't enact -- well, agree to anything. so i guess my question, how can you, like, have that happen if there aren't details? and also, does that mean the corporate tax reform white paper won't come out which does have details and which you said would come out after the results?

>> soon, not sure quite when. some time before the end of the year. we will lay out a set of broad proposals on corporate tax reform that meet this test of making us more competitive as a country, strengthening incentives for investing in the united states and we're going to be guided by in terms of strategy is how to make sure we maximize the chances of reform coming on sensible terms but i expect you'll see us lay out relatively soon the detailed proposals you referred to. >> before or after november 23? >> we haven't made that judgment yet. there's a lot of interest in the super committee in looking at this, not just on the super committee but in congress generally and we've been talking actively to all the principal parties involved but what we're going to be guided by in terms of when and how we advance the specific proposals is what's going to maximize the chances we

get something done on terms that we can support, again, that meet the basic test, which is to make the country stronger over the long term, make sure we're improving incentives for investing in the united states. >> thank you, guys. >> in a few moments, a discussion of bipartisanship in a time of divided government. [captions performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> a look at trucks -- what republicans are planning. a preview of the supreme court's upcoming term. on washington journal, we will talk about the jobs plan with rob andrews of new jersey. darrell issa oversees the reform committee. he will take your questions about the agenda and his

proposals to eliminate mail delivery on saturday. we will be joined by the christian science monitor's anna mulrine. she recently returned from afghanistan. it is a live every day at 7:00 a.m. eastern. a discussion of the relationship between congress and the ministration with former senate majority leader trent lott and former senator of norse dakota. the iraqi washington center for an hour and a half. the event was moderated by c- span. >> my name is that doctor alan

gross. i am the director of economic affairs. it is my pleasure to welcome you to the first conversation since the series. it is sounded in the her lifelong friendship of two leaders from opposite sides of the aisle. alan simpson and republican who served for many years and norman mineta from california who served as the secretary of commerce and the clintons administration and is he secretary for transportation in the bushes ministration. they met during world war ii when the simpson's boy scout troop is it did in wyoming antelope -- at the center were the secretary's family was interned with other japanese- americans. despite their eventual political differences, their friendship and their commitment to leadership and service in toward. here in the series ends to

create a forum in which students from around the world can engage with leaders and explore issues of public concern. we also hope it will be a meaningful supplement to the leadership development effort of the students in the academic internship program. to introduce today a's event it is my pleasure to welcome mike smith. [applause] >> thank you very much, alan. it's a pleasure for me to welcome senator dorgan and senator lott to the washington center today. both senators, while partisan during their term in the senate, various terms in the senate, had reputations for reaching across the aisle,

working with the other party, the opposite party, and effecting constructive legislation to help the american people. we're fortunate that steve scully is going to moderate today's discussion. steve is the senior executive producer and political editor for the c-span networks. since 1990, steve has been responsible for the planning and editing of all campaign programming including presidential and congressional elections for the public affairs cable network. steve also serves as one of the regular hosts of the "washington journal," a daily live public affairs program, as well as "newsmakers" and other c-span programs. steve is also a member of the associate faculty here at the washington center where he teaches a course called "the road to the white house." this course is a comprehensive study of american presidential politics in the age of television and the new digital media. without further ado, steve scully. >> thank you. senator dorgan, senator lott,

thank you for being with us. let's get right into this. in terms of the word bipartisanship and compromise, we're hearing this today, the line's been drawn in the sand when it comes to taxes and the deficit. when it comes to the big issues, senator lott, medicare, medicaid, social security, the economy and taxes, can there be bipartisanship and if not, why? >> bipartisanship is very hard to achieve no matter what the issue is or when it is. it seems more difficult now than it has ever been but we're all involved in revisionist history. it was tough in the 1980's and the 1990's. i first came here as a congressman when i was 31 in 1973, and those were some tough times, too, particularly in the house of representatives where the majority has ultimate power

there and i think that's one thing that happened to bipartisanship in the senate over the years, at some point, the majority of the senate had served in the house and the house kind of turned you into a partisan warrior and when you get to the senate, it's hard to get over it. but it can be achieved but you have to work at it. a lot of these students, first of all, congratulations to all of you for being here. i think this is a great opportunity for you. this is a great program, the washington center, and i'm sure that when you leave here you won't be the same again and i hope that's all in a positive way. but, you know, right now it is particularly tough, but you have to work at it. and it is called leadership. you have to have men and women of good will that are willing to run across that aisle. this should not be a blockade between the parties. i have found that if he really wants to get something done you have to be prepared to be

flexible. you can get into trouble with either party if you are too flexible. i became known by such terms as but imaker, pragmatists, did, -- not give up much of my philosophy. we're on the commerce committee together. a lot of what happens in the transportation committee should not be partisan. transportation, roads, highways, i never thought of it as being partisan. we worked on a newspaper issue that we agreed with but a majority of our parties did not agree with. we give people heartburn when we got together. there were a couple of issues like the importation of prescription drugs. we worked on that together. it is not an easy thing to

achieve with 24/7 news media. but it can be achieved if people make up their mind they're going to get its debt. >> on the issues today, how can it be achieved suspects when adolescence? -- achieved? what are tehe lessons? >> compromise. if trent lott runs from -- runs for the senate and i'm a candidate from north dakota, we come here with different constituencies. my constituents may feel differently than his. we come here with our own notions about things. how things should work and what we believe. when we get here, let's assume we feel differently about key

issues. taxes, for example. the only way to resolve that -- you can decide we're going to sit on our positions and we will never reach accord. or you can decided is important for us to reach a compromise and you come to the middle to do that. the tax issue right now is a very important issue. we are deep in debt. we can talk about the reasons for that. but we are. we have been fighting to give you a worse for tenures and have not paid for a penny of it. -- two wars for ten years and have not paid a penny of it. if you are going to send people to risk their lives halfway around the world, shouldn't we pay the bill so that when they come back you do not have to? that is my feeling about it. there are others who feel

absolutely not. never. we do not intend to support additional taxes jury there is a difference of opinion. you resolve it by figuring out, where is there some room? some give and take? >> on the plan today -- >> let me jump in. i never met a tax i like. they agitate me from beginning to end. one of the things you need to do as a leader in congress and life is listen a little bit. right now you're hearing the president saying we have to have more taxes. democrats want more taxes on everybody but the middle class. you have republican saying no taxes. if you listen carefully some are saying, some of these loopholes which to probably take a look at closing those. some democrats say we're not

going to get all of these proposals setter being made now by the president this very day. are there some areas where there could be tax reform that might make a fair tax code which would help our creation of jobs and competition around the world? if you listen to what " sides are saying, there is some common ground. the way it works in washington, everybody says i am for this and nothing else. then topositioning is get the job done. that is my hope and my prayer that they will find a way to stop sticking out of the positions and to see where there is common ground.

>> the differences, that is not what is happening today. it happened traditionally away trent describe it when we spent several decades -- that is the way it did work. in recent work -- years it has not worked like that. instead you reach an impasse and nothing happens. it is in need of help and good decisions. both sides are saying we do not intend to compromise. the one thing that has bothered me is, in their country there is a political dialogue that suggest there are two choices -- you stand by your principles and fight or you compromise. if you compromise, that means you have caved in on your principles. that should not be the case. the only way democracy works is compromise. we have a bleacher section.

they'll have microphones and radios on both sides. they say, how dare you compromise? you did not come here to stand for your principles? the result is an impasse at a time when the country can least afford to have one. this country needs good decisions to put back on track and put people back to work and invest in education. nobody likes to pay taxes. when i see a good school that my kids attend i am happy to pay taxes for that school. when i see a good road, i am happy to pay taxes to have the infrastructure they do not have. i understand nobody wants to pay more taxes than we need to invest. on the other hand, whinnied spending restraint and new revenues. -- we need spending restraint and new revenues. >> i want to frame this question

in terms of the comments made by your successor. his job was to see barack obama as a one-term president. john boehner said he is calling on class warfare when it comes to taxes. you have to work with this president. you worked with bill clinton and you had to work with george bush despite public posturing toward the administration. how do you do that's? how do you sit down and work out a deal? >> sometimes it is unseemly. this is the one thing that is missing. i used to urge president bush to invite harry reid over. just the two of them to set up there looking at the washington monument, that beautiful view. i even said it would be nice if you could have a glass of something to drink other than

coke. since neither one of them are drinkers, i knew that was hopeless. i do think the personal relationship is part of it. one of the reasons we did work together -- i was not sure about him but he has a beautiful, brilliant wife. i enjoy her company. seriously, that is part of what is missing. the senators and the house members and the ministrations, they do not pursue personal relationships. they do not pursue an opportunity beyond the headlines and the limelight. the president has to talk to his base. mitch mcconnell wants to see president obama defeated. the president wants to see the senate remain a democrat. that is their ultimate goal. somewhere somebody has to say, in the meantime we're going to

do things for our country. he and i went back and forth. i was the majority leader and then we switched at least a couple of times. on occasion we would say, look, if we get this done there will be enough for both of us and our parties. one time we pushed an issue together when our conferences or against it. >> the patriot act. >> you read the article in the "a washington post." they thought it was going too far. tom was getting into resistance in his caucus. we had a conversation and agreed we would meet on the floor of the senate in calling on the floor and get a gun. we did and it wound up passing 98-2.

the important thing was we needed to get it done. it was the aftermath of 9/11. you could argue about the details but it is important to get things done so are intelligence community can get things done. >> when mitch mcconnell said that i was gritting my teeth. that is politics. the leader of the senate would want to seek the democratic leader replaced. that is not news. it was a bit of news when he said it was his highest priority when we have such problems. such high unemployment. a sick economy and a lot of issues. there are a lot of in temperate things said. we should evaluate what people do rather than what they say. the question for this congress, are they going to do the things necessary to put this country on track to become the country that we word? a jobs machine it gives middle-

income people a place to go to work and have a job security and take care of their family? will this expand the country that provides opportunity? that is the key issue. >> one of my favorite quotes is from margaret thatcher. she was speaking to the republican congress a senator talking about how she did things with parliament and a republican senator from a state that will remain nameless said, lady thatcher that is well and good but united states senate has to pursue a consensus. we have to come to an agreement that a majority of the senators agreed to. >> she paused and said, the pursuit of consensus is the abdication of leadership. leadership is a position that your principles support and lead to a consensus. i thought an awful lot about

that. that is what byron talked about. you do not given up on your principles. you fight hard. but you allow that to help shape the debate and it can develop into a consensus. >> thank you for being with us on behalf of the students. we will begin with questions. if you could introduce your name and where you go to school. >> my question is, what you think that radical groups like the tea party due to the idea of compromise? >> i do not agree with your description as a radical group. you know, who are they? if you look at it, the democratic candidate for governor in louisiana is a key party member. he is a democrat. it is not a radical group of

republicans. it is men and women. where i am from they are people who are concerned about the deficit and debt. they do not given to other issues. they will hammer you on that. they varied. this is a loose knit group. i cannot figure out who runs the show. somebody said all of the candidates in my state lost last year. in the primary. somebody said, why is that? the tea party is us. it is the republican party. it is not some separate group. they ran and lost. candidates had to work it out. you do have groups on both sides of the party line and philosophical lines that take extreme positions. they make governing difficult.

that is what our democracy is all about. it is messy. i think anytime you have a debate, if you listen you learn. i am all for it. i do not take offense. dial is made a point to go to union halls. -- i always made it a point to go to union halls. so, i would go into the union halls. the leaders did not like to see me. the members would listen to me. i'm not -- philosophically they were not where i was on most issues. >> the origin of the question is the tea party and its representation that you normally see and hear, the tea party is an important part of the

political process. it is way off from where i am in terms of its positions. they have a right to get involved. they have every right to do that. i think what originates your question is michele bachman says she is the leader of the tea party here in washington and has had a leadership positions and then a lot of things for them. her positions on a range of issues are off the chart. she would like to get rid of minimum wage. she would like to get rid of medicare. she believes we should have defaulted on our debt. she said i do not want any compromise. i want the country to default. that is radical. her presentation as being the head of the tea party is described as radical. having said that, the republican party has a t party influence in all of the important states. all of those or running for

president have to find a way to get during kravis -- crevice. it will have to move a little bit more to the center. i do not know if trent will agree to that. >> it may not be the candidate i prefer who wins but that is where my pragmatism kicks in. you have to look over the horizon and look beyond your personal preferences and think about who would be a better president. sometimes it is a more conservative candidate. sometimes it is a more moderate candidate. i do not have a problem with those shades. that is why i got in trouble sometimes. >> who is the candidate? >> i am supporting iran in. my state would vote for. . -- supporting the mitt romney.

my state would vote for rick perry. i want somebody who is going to focus on the economy and understands how to do that. our best candidate is mitt romney. that is who i am supporting. >> my name is trevor and i am from oklahoma. my question is for senator lott, what exists in the world today that is the greatest threat to liberty and freedom? >> let me take a 30,000 foot level. we have 30,000 nuclear weapons on this planet. the explosion of one of which would change the life forever on the planet. a bout -- about a month after 9/11 there was a caa agent

nicknamed dragon fire who reported there was a piece of intelligence that suggested a nuclear weapon, a 15 tillich ton russian nuclear weapon had been stolen from the russian arsenal and had been smuggled into new york city or washington, d.c. by terrorists and would be detonated. for the next month there was a seizure in this town. you did not read about this. they did not tell people about the threat. there was a seizure. what if one nuclear weapon had been stolen and trucked into n.y.? and it exploded and two injured thousand, four hundred thousand people killed? -- 200,000 or 400,000 people

killed? if we do not reduce the number of nuclear weapons on this planet and take new steps to keep them forever out of the hands of rogue nations and terrorist groups, you will live at a time when a nuclear weapon is exploded. that is the alternate loss of freedom. it will change everything on the planet. >> i am glad we have representation from oklahoma. rogers state university. did you play oklahoma? >> i played football from third grade to my senior year in high school. >> client to have you. it is hard to disagree with what byron says. i do not want to go too far on this. i think the strength of the american people could withstand

any kind of attack like that. i am pleased that both administrations have done things to prevent that thing from happening. it is a serious threat. when i think about my grandchildren, that is the most important thing in my life. i get mad when i see things happening in government or around the world or anywhere that i think will be -- what it will mean for them. we see too many of our responsibilities to government to do everything for us, with us, anything that is reasonable. my predecessor in congress, a democrat but work for in the late 1960's used to say the greatest threat is not from within for -- but from without our borders. within our own ranks.

we need to think about the freedoms and the responsibilities we have as americans to protect those first, last, and always. >> my name is maria and i am a student from national university. -- to be think congress will resolve this issue? >> we have come close a couple of times. >> that was the moment when i decided to retire from congress. the last time we tried it. i was so ashamed of the conduct of the senate. we need immigration reform. it is not just about illegal immigrants. it is also about legal immigrants. i have tried to get people into this country. one of them was a lady from sweden who was a physicist to work on a program at the space

center, a nasa program. you would have thought we were trying to still the treasury to get her into the country. it is hard to get a person without background from that country into the united states. i would try to get canadian doctors into mississippi. it was a war. we need immigration reform. when you think about how we kingdom more people into this country that want to come at have something to offer, that want to work, they have everything you're looking for. they cannot get in here. we seem to be unwilling to police our borders and control illegal immigration. then you get into the terrible problem of what you do with those that are here already? i do not think you can build a fence to keep people out. i do not think that you should

run them up and throw them out. threats three death because i have said some things like that. i was trying to get a bill through that i thought would be good. i would not have voted for it in the form it was in. that is what the legislative processes. if you decide how you're going to vote based on what is in the package. we let it die on a technical ground. an eclectic group in both parties and yet we went down in defeat. when i look back on it, i didn't after action review. that is in military terms. what happened? we were doing ok on the process. we messed up on the communications. the minute our position had to

be described in three paragraphs, the opposition was, it is amnesty. we were dead. we could not overcome that one word. we were going into details and parliamentary and details. we got killed. we needed. it is going to take a bipartisan effort. we need a president who will get down under the hood and get his hands dirty. we need a congress that will try to deal with it responsibly. there will be a window of opportunity in the early spring of 2013. i hope the next president and congress will confront this issue. it is difficult. we did not get center to play checkers. >> go ahead with your question.

>> i am from emerson college in boston. i wanted to talk about how the media frames the debate. we see that it is framed in a win-lose scenario. i'm wondering if you could speak to that. is it worse now or the same song and dance? >> i think the media reports almost everything that is in the news as a course trade. who is ahead, they continue to report which side is going to win rather than the real substance of the issues. c-span is extraordinary. i think c-span is one of the great places where the american people get an unvarnished view of what both sides believe and how they feel about issues. " to headline news or fox business or whatever you want to

watch and what you see are these snapshots. most of it is about who is winning. that is not thoughtful. it has changed dramatically. we do not know what journalism is anymore. anybody can call themselves a journalist as they have a microphone and a note pad. but does not make you a journalist. who is fact checking all of that? nobody. with the internet and the 24-7 news hour and things going viral, massive amounts of misinformation can move instantly to everyone. it is much harder to have a thoughtful debate that -- on complicated issues. let me come back to the last question. how many of you have traveled to another country? how many of you have trouble to

another country? if you have left this country, if you're an american and you have gone to another country, and you look back in the rearview mirror, you understand what this country is and why in a planet or there's about 7 billion people, why there are a lot of people who aspire to come to the united states of america? they see it as a beacon of hope. they want to go there. we cannot accommodate everybody. if we had no lawson said come here and work with us. join us, live with us. we would be overrun by people -- we are not able to police our borders. immigration is a very important issue. we need to get it done right. we need to enforce our borders.

we need to resolve the status of those who are here. a lot of young kids are fighting for this country whose status is not resolved. we need to do all these things. it has not been done because it is very hard and controversial. it ranks among the five or six issues that have to be tackled. >> on the question about the news media that we can now, and electronic media is a big part of the problem as why are congress have such a difficult time coming together in a bipartisan way producing a result, almost anything. since your students and you studied political silence, go back and study the history and see what to john adams and alexander hamilton and thomas jefferson had to say about the media. the median rate them over the coals. a lot of it was malicious and

untrue. the media has always been a part of the problem with politics. it is part of why america is as great as it is. >> we will turn over here. >> my name is ryan and my student at university of tampa florida. some people think the institution of the senate has become a problem. there are too many obstructionist tactics and the institution needs to be reformed. do you agree or disagree? >> i think that reform or ways to improve an institution should be on the table. with cooperation from harry reid and mitch mcconnell senator schumer, the democrat and republican came up with reforms this year.

you can always find ways to do that. the problem with the senate is not rules for the institution. it is the people. i had that conversation. we were voting on a 70 amendments. most of us did not know or care about and men's because it was part of the problems. why are we here and looking so bad tonight? it was -- it was probably 8:00 or 9:00 at night. joe lieberman, chris dodd, lindsey graham, john, from arizona and myself. kent conrad was there. we were discussing what the problem was and how we should change this to stop it. i said the problem is us, because we put up with so much stuff. we tolerate some of these things and don't really try to find a way to get something done. i take advantage of the rules.

i used to do what harry reid does now and mitch mcconnell has done, you fill up the tree. when you fill up the tree, you block amendments from all other senators. it is being used more than it was in the past. i do think it is a problem when you get into a filibuster it halt the proceedings of even taking up a bill. maybe some of should be evaluated, but it depends on your perspective. i used to think seniority was a bad idea, until i woke up and i was close to being no. 2 in the house. well rose a freshman ricky on the back row, i would get so mad i could not restrain myself. when i was standing at the leaders chair, i saw a little different. the senate is a unique place.

it is hard to get anything done, but if you have true leadership and true commitment, you find ways. i would urge harry reid to stop finding things to fight over. find things that you can move along. if you look under the covers, there have been a few things they have done just in the last week where you see cooperation between harry reid and mitch mcconnell. i keep pushing them to try to actually do a highway bill. it is something we need in this country. it would create jobs. it is not partisan, so stop trying to look at where you know you will have a bite and cannot get it done. just like the president's saying past my jobs bill like it is. that is not going to happen, and he knows it.

say to the congress, this is what i would like to have, but let's see if we can do the payroll tax issue, maybe the highway bill. what are the things we can do together, and then see if we can get those done. >> the senate was designed deliberately to slow things down and has been spectacularly successful. >> my question is an addition to his question. last week oxon hill and i send it -- i attended a subcommittee that seemed very bipartisan and they seem to get through a lot of shippers -- lot of issues. the next that went to the full committee, and there were so many split right down the middle. i was wondering why you would think in this subcommittee there is more bipartisanship and when you go up the ladder.

it was the commerce and science committee. >> what was the controversy? >> it was not a controversy. that passed the bill through, but then it was all these amendments. >> i was on appropriations for many years, and normally they try to say if you have a controversial amendment, don't bring it to the committee, save it for the floor of the senate and we will have a debate on the floor of the senate, and of course the bill never gets to the floor of the senate. for the last two years, we made spending choices, established what the priorities were -- none of them got to the floor of the senate. that is one area where the senate is broken. we cannot continue that way. there are a lot of reasons for it, and i won't take the bait

on trent of the notion about the president offering his jobs proposal, take-it-or-leave-it. the problem is, neither side offers the american people something to be proud of these days. i was giving a speech by wild back and said both sides reminded me of the:about a man who drinks too much and his spouse scolds him. he drinks because she scolds, he thinks. she scolds because she he drinks, she thinks. neither will it is true, he's a drunk and she's a shrew. neither side really is offering the american people very much. the congress needs to get its work done. these to compromise on the tough issues. >> i am from the university of

new hampshire. i would like to hear from both sides of the aisle on this question. what do you think is a major step that needs to be taken to truly reform our current convoluted tax code? >> i think we do need broad group -- broad tax reform. we have not had a major tax reform bill since 1986 or 1987. we do need fundamental tax reform. every congress adds a few more additions to the tax code. it has become a mishmash and is confusing and overwhelming. in many respects, it is unfair. you don't support this group or that group. i have a lot of faith in the leadership of the ways and means committee and house, you have all of members on both sides of the aisle. the same thing in the senate.

you have max baucus and john grassley and john kerry. the philosophical balance is are there. they have had a lot of hearings. when i was on the finance committee in 2007, we were derrek -- we were having hearings then in a run of of -- up what should be tax reform. broadbased, fundamental tax reform takes at least three years to lay the groundwork, have the hearing, the site where you can lose the loopholes. -- close the loopholes. if they would look at this across the board and try to make a more fair tax code and take away some of the incentives, but then tried to lower the rates with individuals and corporate tax rate, i think it would be very good for the country and for job creation. one of the things i say to paul ryan, chairman of the budget

committee, remember as jack kemp is to say, never say the word cuts are balanced budget without saying growth. what is if you are going to do to have responsible budgets, but do it in such a way in terms of tax code and where you spend or don't spend that will provide growth to the economy? i think we have lost that second word. i think it can be done and could be done right now. i would like to see the committee -- the super committee say we will give the tax-writing committees eight months with a hammer at the end. you have to do it or else, to sit down and have final across- the-board tax reform. as republican, i would prefer it would be revenue neutral, but if they would get up and say we want a fairer tax code and it

has to apply some revenue, i think even that would work. but give them time to do it sensibly, but it needs to be done now. if we don't get it done in the next eight months, then we are looking at 2013 or 2014. >> this town is full of lobbyists trying to make sure that individual companies or industries get those tax breaks and loopholes. what would change? what would cause change? >> it is hard to do. i was on the ways and means committee and helped write the 1986 act. ronald reagan pushed for it. we lowered the rate and broadened the base. it was the right thing to do. over all these years, i agree with trent. let's do tax reform, lower the base, broaden the base, get rid of a lot of the deductions. it also indicates that we tackle this question, let's

understand there is a disgrace in this tax code, notwithstanding all the other things. warren buffett wrote a piece for the new york times. he is a good guy, the second richest man in the world. in his law office in omaha where they have 30 employees, they all volunteered to rate what rate of tax they pay. the second richest man in the world had the lowest rate of tax than his receptionist. that is just disgraceful. what is your name, young lady? allie makes $3.6 billion a year. that is $300 million a month. is that $10 million a day? allie makes $10 million a day