lives. >> you dealt with a lot of presidents. at one president, one moment. >> that is hard. i was thinking about moments with ronald reagan in the oval office or the two george bushes. it is hard to pick a moment. 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. 45,000 people. 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. never forgotten the moment when 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. 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. or rounding up 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 came here to do. i don't think i can supported. -- support it. 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 from pascagoula, mississippi and i'm telling a world leader, and the man i admire so much, "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. -- in my 35 years. but it's memorable, you start

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, president obama outlined his plan to cut the deficit. then details about that from secretary geithner and jacqueline. "washington journal" is live at 7:00 a.m. mr.. we will talk about the future of

the postal service and with a reporter who just returned from afghanistan. a couple of live events to tell you about this morning. at 10:00 eastern, the joint economic committee holds a hearing on the federal debt in u.s. economy here on c-span. and on our companion network c- span 3, former white house budget officer alice rivlin testifies the for the senate budget committee at 9:30 a.m. eastern. to cut the deficit, president obama is calling for $1.5 trillion in new taxes as part of the $3 trillion deficit reduction package. speaking at the white house, he also said he would veto any plan that 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. 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 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] ♪ ["stars and stripes forever close " playing]

>> details about the president's plan to cut the deficit were outlined by treasury secretary to tim geithner and budget director jack lew. they spoke together at the white house. >> 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, tim geithner, on my left, and on my right, jack lew, the director of the office of management and budget. they are together going to answer your questions about the president's plan for economic growth and deficit reduction. i know you just heard the president speak on this. jack and tim are here to take your specific questions. after they're done -- if you could just keep on topic with them -- i'll remain to take your questions on other issues. all right, we're going to go right to questions. so, darlene, if you want to start. >> yes, thank you. would someone explain why the president knowingly put forward a plan that includes these tax increases that republicans are -- i mean, they rejected them even before the president stepped into the rose garden? >> i think republicans and democrats all 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 and changes you're going to need over time -- roughly $4 trillion over 10 years.

why $4 trillion? that's what you need to bring the deficits down to a level we can sustain over time, to a level where the debt as a share of the economy as a whole is no longer growing -- stabilizes, starts to come down. the debate we're having is how best to do that. and what the president laid out is a balanced package of reforms on all parts of government, combined with some modest reforms to our tax system designed to make our country more competitive and make sure that the most fortunate americans are paying a greater share of their income in taxes. but this is about a choice -- about what role you want government to play in the economy, how to make the economy stronger in the future, how to make sure we're living within our means, but still preserve room to strengthen the economy in the short term, but also make us more competitive, preserve room for investments in the long term. and to do that, you have to figure out ways to reform our tax system to make it more competitive and more fair. that's why we're proposing these changes. we think they're good policy. we think they're good economic policy, and we think they are better than the alternatives.

>> could you explain more about how the buffett rule would work? the president made reference to it in the rose garden, and none of the materials spell out how much revenue it would raise or any details about it. and it seems like an important part of the plan that he's trying to emphasize. >> what the president has proposed is that congress shape comprehensive reform of the individual and the corporate tax system, so that, again, we're not just making our country more competitive, strengthening incentives for investment, but we do so in a way that helps contribute to deficit reduction and asks the most fortunate americans to pay a larger share of their income in taxes. the basic principle at the heart of the buffett principle, is that if you're among those fortunate few in the united states, we should make sure you pay as a share of income in taxes more than what a middle- class family pays. now, there are lots of different ways to achieve that principle. how you do it depends on what

you do to the broader tax system as a whole. we're not going to give the congress a detailed proposal for how to meet that specific principle now because there's lots of different ways to do that. but we think it should be the basic foundation of tax reform, and we're going to fight to make sure that's part of what congress considers and ultimately delivers. >> why not give a specific recommendation on that, though? you've spelled out how much revenue you want to raise overall. why not be specific on that one? >> well, again the -- in some ways you could say we're having a debate about whether you should try to reform the overall system -- corporate and individual -- to meet the basic principles laid out in the president's proposal, or you should try to get more revenue out of the current system. now, the president did lay out very, very detailed set of changes -- specific changes for individuals and corporates, if we're trying to get more revenue out of the current tax system. but i think the best strategy for the country is to try to reform the overall system so that we're bringing rates down

where we can. we're eliminating all the preferences in the tax code. we're helping contribute to deficit reduction but make the economy more competitive in the long run, and again, we're going to make the system overall more fair than it is today. and we think that's the best way to go. and again, we think it's better than the alternatives. >> also, can i ask you a question about the european crisis? you've said that the europeans have the firepower to tackle this crisis. is there the political will there? and how worried are you that this is going to spill over to the u.s. economy at a time when the economy is already very fragile? >> europe is obviously under a lot of pressure, and they face a lot of challenges. and it is affecting us. it's affecting confidence here and around the world -- not just in europe. and we have a huge stake as a country in helping them deal with those challenges. we have a huge economic stake, financial stake, and it is not in the interest of the united states for europe to be weakened by a protracted economic and financial crisis. so we are working very closely

with them and being very supportive, as they try to craft a more effective strategy. you asked the question, is there political will there. i believe there is. it's not a question of the financial resources, the economic resources of that great continent. this is within their capacity to solve. and i think you will see the leaders of europe do what they've been doing over the last several months and weeks -- just to try to reassure the world that they have the political will, not just the economic capacity, to manage these challenges. and, again, it's in the interest of the united states for them to do that. >> jack a question for you. if the expiring bush tax cuts, if that -- for the wealthy -- if that's seen as a savings of $800 billion, then what about the cost of not letting the rest of the tax cuts expire? how do you account for that? >> the way we constructed our approach was to start from what would be the consequence of having all of it be extended, and then we said that the top rates should not be extended -- top rate cuts should not be extended. so we've now projected what the

impact on the deficit and the debt is of having the middle- class tax cuts continue. and a balanced approach will give you the ability to let the middle-class tax cuts continue, and if you enact the entire program that we've proposed, bring our deficit down to the low 2%, like 2.3% of gdp, at the end of this period, and keep the debt as a percentage of gdp in the low 70%, instead of climbing up into a very dangerous range. so we've encompassed it by putting -- in the baseline -- the assumption that that would be extended. >> so it's factored in there? >> it's factored in. yes, it is factored in. >> secretary geithner, just a couple questions. one, is are you maintaining the $1.5 trillion in tax increases, all of which would be on the top two tax brackets, as i understand it, would have no adverse impact whatsoever on job creation? >> well, again, our proposal is, through comprehensive tax reform, individual and corporate, to 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. now, 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 investment in the united states. lots of different ways to do that, but we want to make sure we meet that basic task. remember, 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 just extend all 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 sensibly through tax reform that strengthens investment in the united states stronger, you'll make people more

confident in the future, more likely they invest here, and that's something we should all be working towards. >> okay. at this point i'll ask one other question. i wanted to give you an opportunity -- there is a big splashy book out this week called, "confidence men," which talks about you, portrays you as a cagey political operator. i know you're going to take issue with your portrayal, and i'll give you -- >> cagey political operative? >> those might be my words. >> it's what my mother would say. >> there is a memo written in february 2010 by white house senior advisor pete rouse, who talks about -- it's a year-one review that looks at the economic plans, and it talks about a number of efforts by, in his view, the economic team here in the white house to kind of slow roll, per the president's orders. but it does say, once a decision is made, implementation by the department of the treasury has at times been slow and uneven, and that, along with the other factors, adversely affect execution of the policy process. so if you could respond to the book and also what pete rouse

said about your execution. >> well, obviously i do disagree with that characterization. i haven't read this book, but to borrow a phrase, i lived the reality. and the reports i've read about this book bear no resemblance to the reality we lived together. no resemblance. >> specifically, though, mr. secretary, did you slow walk on the president's effort to -- >> absolutely not -- >> and why not -- >> i would never do that. i have spent my life in public service. it's my great privilege to serve this president, and i would never contemplate doing that. but, again, i lived 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 has been talking about fair share, everyone paying their fair share. but when you're counting over a trillion dollars in war savings, when the president's

policies have 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 social security, you don't have major structural changes to medicare, like the age eligibility changing or anything like that, but you're raising taxes on the rich -- where is the pain here in this budget? where is the real pain and sacrifice that the president is calling for when you're walling off all these things? >> i think that if you look at the details of what's in the plan that the president is sending to congress this morning, there is a lot of pain, and it's spread -- 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 in the house took account of them. and at a time when we just enacted spending caps that apply to defense and non-defense spending, this is locking the back door, and it's making very real that we're on a downward trajectory. and just to remind everyone, in

august the president signed into law spending caps that will bring spending to the lowest level they've been since president eisenhower was president. tight spending caps enforced by reducing it -- and it is real policy to bring down that spending. 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 there's very 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 incentives for savings in the long term. while we did not raise the retirement age, i would just note that raising the retirement age is not something that actually reduces cost. it just determines whether or not the government is going to pay them. there are a number of provisions in here that will mean that beneficiaries will have a different set of incentives. right now, if you're on medicare and you take a medigap policy to protect you for first- dollar coverage, the extra cost

that comes from that is completely distributed through the system. we're saying it ought to be built into the premium you pay. we have extra deductibles phased in. we have co-payments on post- acute care -- that means 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 do it in a fair way. we say it's not going to affect people who are currently retired. it's going to affect new retirees, and it will take effect after 2017. you look over 20 years, very substantial savings. i think if you look outside of health care, 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 just urge you to look at the details. i think what the president did do is 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. >> just following -- talking about social security specifically, the president, by his own admission, has said that this is a program that does need to be looked at and reformed, something that was talked about this summer during the debt ceiling debate. why isn't it part of this package? >> well, 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 gdp. it gets the debt as a percentage of gdp into a place that's controllable, the low 70%. so he put together a plan that accomplishes the goal in a way that he thinks is the right, balanced way to do it. obviously over the summer, we were in a different context. we were in a 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 approach with revenue, then we went back to put together a plan that reflects our view of how to do it. the president has made clear over and over, as he did today, that social security is not the principal driver that's causing the deficits we're facing. our real challenge in social security is to have a balanced approach that would, 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 it's very much a subject for future discussion. >> and since we have you both here, the president has said that his jobs plan is insurance against going into a double-dip recession. how much concern do you have about delving back into another recession? >> well, let me just 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 go on in highways -- that's built into this. it's paid for. all of the deficit reduction that we're talking about today is after paying for that. i think that it's the prudent thing to do at a time 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 that the american people expect. and this plan, including the jobs plan, would very much deal with it. >> can you guys clarify the president's veto threat? would he veto any bill that does not have revenues in it, or is it only if it doesn't also -- >> i think the president's statement, if you look at it, speaks very clearly to -- he said he would not support a bill that he thinks is unfair and unbalanced, and he said he

would veto a bill if it cuts benefits that people are relying on for medicare without a balanced component in revenues. >> but he could end up with a situation where you have an end product that doesn't have any 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 as to how to solve a problem, that would get us pointed in the right direction in terms of fiscal policy. we think congress should do it in a balanced way. >> gentlemen, can you explain whether the buffett rule is another level of amt? >> the buffett principle is like thinking about -- one way of thinking about it is to say that americans who are fortunate enough to make over a million dollars should, as a share of their income, pay a minimum level that is no lower than that paid by an average middle-class family.

lots of different ways to do that. i wouldn't call it what you called it. i'd call it what i said. whyit's a sensible -- should we -- we're going through a tough period as a country. we have 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 what we're proposing is, we think, something basically fair. we think it's good economic policy, and, again, it's better than the alternative. if you think about -- again, 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 you do so without modest

just adding to the burden of people that have already borne so much of the burden of this crisis and a long period of very a wall. low growth in median incomes. so, again, we think it's a basic, fair principle and better than the alternatives we've seen. >> are you able to say what the buffet rule tax rate would be? >> no, because it depends on what happens to the shape of tax reform. again, we're proposing this as a basic principle that should be the foundation of tax reform. there's lots of different ways to achieve it, but it depends on the overall result or the options to the alternative you look at in tax reform. remember the president's principles are -- you want to lower marginal tax rates, clean up and eliminate all the wasteful subsidy spending -- tax expenditures in the tax code, help make incentives for investing in the united states stronger so that we're more competitive over time, bring down those long-term deficits, and as part of that, make sure the system is more fair.

so how you achieve that hit principle, the buffet principle, depends on the shape of the basic reforms. >> mr. secretary, could you clarify what the president said on the fees on banks relating to tarp? maybe i missed it in all the briefings last night -- >> that's a proposal that we had in the president'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 benefitted most directly from those programs. but that's been a longstanding proposal in our budget. >> -- 10 basis points for banks that have assets over $50 billion, that's -- >> that's the structure we proposed to do, and, again, that was in the president's budget in february. >> but this wouldn't add to revenues? this would just make you whole from tarp? >> well, not quite the way you're thinking about it. if congress did not legislate a fee like this, then if we ultimately realize losses on the emergency programs, then those would add to the deficit.

so by proposing this fee, we try to make sure that doesn't happen. and, again, that's a very important principle, underscored financial reform from the beginning, which is that the largest institutions that benefited 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 some middle-class tax rate? >> i think you're going to find that we're rich in examples and illustrations about what average effective tax rates are as you go up the income chain. but it depends what your profession is in many ways. there's lots of people who make more than $1 million a year who -- their income is in the form of wages and salaries, and they pay much higher marginal tax rates. but there's a lot of people whose income comes predominantly in the form of dividends on investments, and those americans pay much lower tax rates. so it really depends on what is your profession, where's the source of your income, what's

the specific circumstances you face -- and the averages won't really capture that. >> a couple more on this. alexis and then andrei. >> can i just ask -- there are some special interests in washington that are trying to calculate whether they would be better off if there's gridlock and then sequestration later. can either of you comment on what would be the risk, as the president sees it, or the downside of trying to game it, looking ahead at that prospect? >> i don't know any serious policymakers on either side of the aisle who thinks 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 serious set of policies. it's an across-the-board cut. it would lead to cuts in domestic programs, it would lead to cuts in defense, it would lead to cuts in 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 well-being, i'm going to -- i will oppose 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 that's working towards a target of $1.5 trillion of deficit reduction. i think that that is something that they say as being their job, because the $1.2 trillion of sequestration would be bad. what the president is saying today is that's a minimum, but that's not the right endpoint. that would not get us to the 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 problem. what he's putting forward today is a balanced plan. there will be a lot of interests that say this is goring my ox. but that's what it's going to take to make policy.

it's going to mean picking and choosing, and making choices. that we think is balanced and fair, that reflects a serious set of policy judgments, and is not kind of mechanical, spread pain everywhere, even where it shouldn't belong, which is just sequestration, by its basic design, does. >> can i follow on one question? 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 you look at the basic economic or the financial requirements of 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. because what it will do is -- and it's a very detailed list of proposals -- would bring our deficits down, as jack said, to a level below 3 percent of gdp, which is a level that is sustainable over the long run because it allows the debt burden to stabilize and start to fall as a share of the economy. now, it will not solve all the problems facing the country. there are still other things we're going to 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 and investors around the world to know that this political system is able to return to living within our means. hathso it will meet that critical test for financial prudence, for financial soundness. >> thank you. a technical question and then an international political question. the technical question -- have you gentlemen estimated how much of a primary circles you need to handle the problems in the medium-term? >> yes, we have. i mean -- but you're raising the economic term. primary surplus is the term that refers to revenues and expenditures being in balance without interest. so 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 the deficit below 3 percent of gdp 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. to bring it below that level, then the debt starts to fall as a share of the economy. why is that important? it's because if we are not able that growth will be weaker in the future, we'll have less 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 threshold is. >> so, basically, you're saying it's below 3 percent? >> that's right. that's the test for sustainability for the economy>> okay. and the policy question is about the bric's. in the overall context of the global situation, especially in europe, what do you see as the appropriate role of countries such as the bric's, and not necessarily just china, but the other bric's also? >> well, i think one of the great strengths of the world

economy, looking forward, is the prospects of a long period of very rapid growth in the major emerging economies, including the ones you referred to -- china, india, brazil, russia. and it's very important that you see -- 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. we'll see more jobs created in the united states. and we expect to be major beneficiaries as a country of that long boom 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 united states because they're in a very different situation. but again, 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. >> last one. >> are there any specific -- sorry, just to follow up -- are there any specific policies you would encourage them to take, to help the europeans for instance? >> 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, not just the europeans, of course. the global economy as a whole depends on there being a sensible resolution to those financial pressures. and you've seen all the nations of the world through the imf make really very substantial contributions to the challenges ongoing in europe. and that just underscores the stakes we all have in more growth and financial stability in europe. >> we're going to do john christopher, and then paula, and then we're going to let these guys go. >> mr. secretary, if i may just kind of add to that -- in fact, the life that we live in now is a borderless global economy and recovery is weak worldwide. is the u.s. coordinating its economic policies and regulations with those of its key allies to make sure that u.s. businesses are not at a disadvantage in the global marketplace, especially when it comes to jobs? >> well, again, 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 innovation, improving our long- term infrastructure, but it 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, a basic principle that guides the policies that this president evaluates are -- 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've indicated that details for tax reform wouldn't really come out that yet -- there's too many that variables. yet there's also been an indication here that you would come forward with a standalone corporate tax bill if the super committee doesn't enact any -- well, agree to anything.

so i guess my question is, how can you 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 default was resolved? >> soon -- not sure quite when. sometime before the end of the year, we will lay out a set of broad proposals on corporate tax reform that meets this test of making us more competitive as a country, strengthening incentives for investing in the united states. now, 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 refer to. >> before or after november 23? a and>> we haven't -- again, we haven't made that judgment yet. there's a lot of interest in the super committee looking at this -- not just in the super

committee but in congress, generally. and we've been talking very actively to all the principal parties involved, and we'll keep doing that. but again, 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 this basic test, which is to make the country stronger over a long term, make sure that we're improving incentives for investing in the united states. >> thank you, guys. >> several advanced to tell you about that on our companion network c-span 3. if former white house budget director alice rivlin testified before the senate budget committee about job creation. status at 9:30 a.m. eastern. at 2:00 p.m. eastern, defense secretary of leon panetta and joint chiefs of staff chairman admiral mike mullen fall the news conference on the don't ask, don't tell policy regarding

gays in the military. if that policy expires today it. and the house sub affairs committee -- foreign affairs subcommittee on human rights look said north korea. in a few moments, today's headlines and your calls live on "washington journal." at 10:00 eastern, live coverage of they joined deficit committee hearing on federal debt and the u.s. economy. the house is back in session at nuns eastern with legislative business at 2:00 p.m.. in about 45 minutes, we'll talk about the president's job plan what democratic representative rob andrews of new jersey, a member of the education and work force committee. republican representative darrell issa joins us at 8:30 a.m. eastern, tearing the government ove