to suggest that the esfs could be leveraged and the kind of arithmetic in the stress test on the banks, if you believe that i have some stuff i would like to sell you. it was the beginning of having a solution to this problem. recognizing the things that have been said before have not been right and have been in denial. if the imf continues to stand with the october framework, it is continuing to perpetuate the denial that has brought us to this point. the great concern here is we have seen major changes in government for greece and italy. we have seen as much commitment to fiscal discipline as we are

likely to see. it is likely to be erosion. the markets are giving a verdict. the prospect, this is not new. every financial crisis there is a moment when people stop worrying about the fundamentals and they start worrying about the other guys and when they're going to flee. we crossed to the point about a week ago. the prospects for success depend on discontinuous change with respect to the nature of the support to prevent panic. we have not seen anything like that yet. perhaps we will from the ecb, the imf, or some coalition of

countries. this is not about road shows about your measures on the deficit. this is about a panic and whether it will be contained. >> i am encouraged by my friend, larry. he is right. this is the starting point but it is a good starting point. finally they are at that moment. confidence is key because we observe that consumers start to change the way they behave. a stable confidence with the new government, we work closely with

them. obviously we are encouraging governors to move as fast as they can. >> i am very worried that the situation learned very few lessons from the u.s. one discussion is what do we do to wall off the prospect of financial crisis? that is about to the esfs and ecb. there is another conversation about initiating plants that provide growth as well as austerity in peripheral europe. both of those conversations need to happen. half measures do not get you halfway there, they make it worse. we learned that in the u.s. >> buying european debt is the only way out, true or false?

>> is the most natural way out. there may be other ways. they have to be mobilized and demonstrated. i thought anyone in the official sector who invested their credibility in the esfs was putting their credibility at a substantial risk. how could anyone suppose that people would a value insurance from a group of officials who were not recognizing there was a default in greece? it is like buying crash insurance from the pilot. it is not a viable mechanism and i think there has been a consistent failure in europe.

it is not like we have never made a mistake like this in the united states but there has been a failure in europe and in the imf to recognize that credibility is something that is crucial. when you speak anyway that is directed at improving confidence by being optimistic, it may work for a time but there is a cost to your credibility. the nation of the -- nature of the assurances have taken a substantial toll. speech wasgarde's a breath of fresh air in terms of identifying reality in this situation in a stark way. i hope that the imf will return to that kind of pattern rather

than into the pattern of expressing confidence with whatever the europeans come up with however flawed the underlying concept is. a sense of they oive crisis? what is the threat here? >> looks, anyone who knows for sure should not be heard seriously on this subject. i say this to you, there is, reading the wall street journal, there seems to be a substantial doubt about the location of the sum of $600 million that was tied uppe at

mf global. it is hard for me to believe that anybody has a a good handle on all of the exposures coming what is happening in europe. we do not know all of the channels of contagion. it is not seen this is an experiment we should be eager to undertake. if financial history teaches us anything, it was a hedge fund with $4.5 million of capital. it was pronounced in the summer 2007 that subprime was only a couple of hundred billion dollars and the market was measured in the trillions. everyone who was walked into a troubled company knows that the

surprises are not neutral. they have a consistent way of being bad. i cannot predict where all of the exposures and links are but it seems to me that the likelihood is that the ramifications will be unfortunate. to take up one other comment, it is sometimes suggested that exposure is complicated. people have had a long time to get ready. this story has been unfolding for a long time. those who favor passivity had a major consideration that people had learned from the experience. therefore it would be ok.

they did learn a great deal. the lessons had to do with accelerating their exits in the face of trouble. i would hesitate to buy into the syllogism that exposures have been run down, therefore it will all be ok. it might be. >> i am always on larry's side. he has a good point. if you're looking for -- there was more on this market to the other side. it is really almost 100 percent pro rated. the european banking system has

lost 800% of their gdp. the risk to the banking system would be a global issue. the leveraging -- deleveraging has some costs already. it is a pretty serious issue. the whole world should work together to help europe and to push them as will to solve the issues. >> i want to give glenn a chance. you are an adviser to mitt romney. most people were watching a rerun of ncis. the number of times europe was mentioned was once, maybe twice. we're talking about parallels to

2008. should mitt romney be more focused on this issue? >> on the european situation, we have some strong suspicions, european banks getting in trouble, money market fund issues, a repeat of 2018 with a nasty downside which is the fiscal ability to offset that is much more attenuated. this is not an experiment we want to find a race to the bottom. i think there is concern among all the major candidates about the global economic situation. governor romney has said this is something we need to have the u.s. engaged in. he has talked about the need for a strong mechanism in europe. >> what is the role here?

we have to fill any void? this is not a situation where we can pinpoint this moment. italian debt became a toxic accept -- asset. >> toxicity changes over time as people's attitudes change. the fed has been the organization most seriously engaged in the european situation. some of that is unfortunate. the fed is walking a line because the treasury has not taken the actions it should have taken. the fed is on the case. >> should the fed to do more? we have the european situation and the question of weak growth in the u.s. as well. there has been some talk if they have been too aggressive or not aggressive enough.

>> that has the dual mandate. the real role of the central bank is low and steady inflation and to be a lender of last resort. the fed has performed well in those tasks. it has politicized itself more than i would think wise by getting involved in regulatory debate. >> larry, do you think it has been too aggressive? >> i'm at a loss. i understand about political pressure. until the last 12 months, it has always been from the populace left. people want easy money. the fed does not give easy money. there is a fight between the political process and to the fed. that is a common theme.

we understand it. what we are living through is inexplicable to me. it is a serious attack on the fed for the access -- access provision of liquidity. if you think it's too easy to get loans, and you think it is doing damage to the economy, that is a natural critique to make with respect to the fed. i see an economy where the growth forecast has been missed every quarter. i see an economy where nobody is clear what the engine of recovery is going to be. it seems if there is a debate about monetary policy, should we be doing more to support growth, not whether doing too little.

i am at a loss. you have proposed radical schemes to bring down interest rates on every mortgage. they may or may not be good ideas but i don't know how you square those with the view that seems to be ubiquitous in your political party that we have a major problem of an active fed providing too much financing to support the economy. >> that is not what i said. i gave the fed high marks. my concern has been -- >> those for whom you advised to not to draw the sharp distinction between regulatory policy and monetary policy. >> let me speak as a glance --

as glenn. we do have an issue a policy can do more. i do not think operation twist is going to be successful. we have to understand that the consumer is over-leverage. -- over-levered. i think that monetary -- monetary policy can do more. i happen to think it is a good idea but the government is not acting. it has pushed the fed into a territory it should not be in. >> is it your view that the government should be pushing to expand the current activities or that the government should be pushing to contract the role of the public sector with respect to the housing market?

how do your views compare with the general run of views that have been expressed in a debate? >> the difference between the serious candidates and the current president is they are and -- focused on short run decisions. the canada -- candidates have said it will give as room to do the things right thing in the short term. the refinancing of mortgages does not require an expansion. if we rotate guaranteed mortgage credit. not something i would have done but we have done. >> let me ask min about asia, underpinning the caution about the outlook for the u.s. is the

slowing in china. how severe is that going to be? >> is nice we are moving away to china. >> an interesting comment. >> china is moving into a softer landing. inflation is down to 5.6%. it is still way high. export growth is high but dropping. it is roughly 4% of gdp. we have 9.2% gdp growth this year and 9% for next year. compared to the chinese growth

is slow but compared to the world, it is very strong growth. obviously china is facing a lot of challenges. the global economic growth is slowing down and china has implemented -- implemented fiscal policy. whether china keeps hold for a while, i think that is the challenge that we have to be careful about, particularly inflation that is high. we will see of china will remain high around 5% in the next few years. the second concern is too strong. last year china had 47.8% of gdp.

that is not sustainable. you have to be careful. if you slow down investment, how you make growth? that will be the second challenge for the chinese government. >> one last question before we open it up, i'm still struck by the speed at which the european debt crisis continues to worsen. and a lack of real options for anyone to do anything about it aside from the european central bank. is there a sense of urgency about dealing with this crisis that is missing? and my overplaying the problem of -- am i overplaying the problem of getting our arms around the situation? >> i wrote in the financial times -- excuse me, an

alternative newspaper. [laughter] about how the best analysis of the vietnam war had established that the way the vietnam war happened was policymakers were presented with three options. if you do nothing, it will collapse. if you do a, b, c, there is a process of success. a and a bit of b, you can avoid disaster in the next month. again and again and again they chose option 3 and eventually the policy collapsed around them. that is the product -- a process we have been witnessing in europe for the last two years. the challenge is to break out of

that kind of approach. pieties about fiscal rectitude have the virtue of being right. there needs to be more fiscal rectitude. one should not confuse actors with sufficiency. they are not sufficient given or the situation has gotten to stabilize the situation. contrast to these financial experiences. the swiss have spent the next to no money and have moved their exchange rate by 10%. they made a commitment. the japanese have spent vast sums and have achieved in negligible movement in their exchange rate. there has been no commitment.

policy has been episodic and with an uncertain future. there is a lesson about the kind of ways you do and do not succeed in solving financial problems. the doctrine about acting with overwhelming force has a resonance in the national security area. something similar is instructive in the financial area. >> that is the point wanted to make. i agree with everything larry said. i'm concerned we do not see the lesson for ourselves. our failure to act, many economists did the math two years ago on greece. i think we have a day of reckoning coming here as well. our leadership needs to be as focused on blending austerity and gross as the sermons we're

giving across the atlantic. >> we have a question for zhu min. you talk about a soft landing but one of the members of the council who knows about the chinese economy asked if there is a possibility of a bubble in real estate. could there be a hard landing there? >> he is a big owner in china. where is the bubble? >> the question was directed for you. [laughter] >> i will give you the answer.

the property price is clear. it has become a problem because affordability is a big issue. things are more expensive than in new york. where there is a bubble, if you're looking for the realtor, 15% are mortgages. the total lending is relatively low. the prices have stabilized. i would say the focus has a lot of issues and has trouble. >> other questions?

>> a question for zhu min, should china increase its contribution to the imf to help europe? >> you had better ask larry. [laughter] >> i will make you this prediction -- china will contribute substantially to any international effort where there are many other contributors and where the situation has all zero -- already been stabilized so it is unlikely that their contribution will be decisive. the best bankers always have a standard rule. they are certain to give you a loan if you do not need it. [laughter] if the situation is not realistic to expect that china will put a large amount of

money into a risky european situation, just as the united states was not willing to put a large amount of money into risky situations in asia. >> you did not ask about whether you would put more funds in the imf. china is the third largest. china also has the members contributing. they can open the bilateral credit line as well. there is a lot of pooling resources. if you hear from the emerging markets, it is clear they are willing to help. china also says they are willing

to lend a helping hand but obviously a lot of details needed to be worked out. >> the probably the only italian passport holder in this room. a question for larry summers. you said it really is too big to fail. i think it is too rich to fail. it has a lot of private wealth. it has a background in manufacturing infrastructure and has an economy. for the first time i heard the toxic word to a g-8 country. we are in a situation where things can go under control. somebody should do something. the ecb should step up their efforts but there is no willingness to go there.

the question for larry summers, if you had a european passport, what would you do? what would be they guarantee, what would be needed to trigger the ecb or whoever to detoxify the debt? >> let me say an two things. business people like yourselves suggest that economists are unworldly and a variety of respect. you are often right. let me say the single thing or business people tend to make errors in judgment. to confuse the strength of technology, the basic function

of the micro economy with the health of the macro economy. in 1999, it was phenomenal in terms of technological leadership. a staggering in its dynamism. stood out to the rest of the world. when finance was mismanaged, it did not matter very much. it is a mistake to suppose that the kind of strengths the site of italy, which are right, necessarily ensure you against financial distress. where the deal has to be is more reform and more support. what is the degree of commitment on privatisation on a five-year plan that is coming from italy?

what is the willingness to look at labor laws? what is the willingness to accept common european discipline over fiscal policies in the future? what is the willingness to seed issues around various subsidies from the northern part of europe to the southern part of europe? what is the willingness to look at gold resources. these are the kinds of questions that have to be put on the table if a deal is going to be reached because, make no mistake, there are politics in

the south of europe and the north, the dutch right-wing that wants to go back to the guilder is a signal of things to come. i think the basic answer has to lie in been willing to put more on the table in return for more support. the very hard to challenge is, as you understand better than i, italy is not a single unified actor. to say that italy should put something on the table eggs the question of who can speak for italy over the next five to

seven years. >> any final word? thank you, min, glenn and larry. >> will come back. th is paul ryan. he is the happiest guy in the room because the packers won. he is not running for president, contrary to -- >> that makes me happy. >> you can urge him on later if you'd like. the most important thing he does in this town is run the budget committee in the house. he is the guy that pu out an actual plan to reduce the deficit and set the tone for the

debate. we were talking earlier, we might want to revisit lessons learned, what you can tell us about where this town is moving. let me dispose of the deficit >> our team put together a program, $1.50 trillion in savings, a very serious effort. it was designed with the effort of not -- with the idea of not ofnding democrats. the basic spending package would put together put revenue on the table, but through base broadening and getting lower rates. that was pretty much rejected out of hand. like jim clark board said on

sunday, the democrats have yet to coasce around a plan. it is challenging to negotte with the other side when they themselves are still negotiating with themselves. so we don't have much time left. these are statutory deadlines that cannot move. if theull $1.50 trillion agreement is out of reach, then hopefully we will get a plan b, which is something shy of that, to mitigate the sequestered. no matter what happens, we will put out another plan. we will budget in march mning the house of representatives. we will budget and showed the country specifically and exactly how we will take on this fiscal problem. not just postponed it, we will solve it. we will put our fiscal roadmap to replace the sequestered, but also keep the debt from getting up to these levels and reform

these entitlements and programs in the tax code. we will approach -- propose again like we did in april a plan to do that. >> as you just noted, you did that in april. you put out a plan that was detailed and controversial. you still have the scars to show for that, i assume. i am just curious, in the months since then, seven months since that point, what have you learned about the viability of a serious plan about what the political traffic will bear, and whether you have brought anybody along the way. >> started with this when i became the head of the budget committee in 2007. i set forth to write a plan to trim the desk -- the debt crisis. took about a year of running numbers with cbo and others to put together the road map for america's future. i had seven co-sponsors.

congress and reintroduced it and had 13 co-sponsors. we got every republican but for to vote for it in the house. all republicans but five voted for it in the senate. largely because of the infusion of energy from our new freshmen , less career people, we dramatically moved the center of gravity on this issue, especially within our own caucus. what i get out of this, from spending time with erskine and allen on that commission, spending time with alice rivlin, to fix this problem in the making, it is erskine bowles and alice rivlin tight democrats who we agree with on the elements of tax reform, on the elements of and taught and tax reform, on the basic principles. the problem is, those are not the kind of democrats running the white house or in charge of the house and senate.

what that means is we might have to wait for an election, but if the election goes the way we wanted to go, i see an opportunity to workith moderate democrats to form a center-right coalition where can once and for all fix this problem. we beat a lot of the blue dog democrats, but there are some jim cooper types still there. so i see some of these democrats there. >> be more specific. when ronald reagan came into office and he had to pass a budget that was also controversial, he could not do it with republican ves. he found roughly 60 -- is there a 60-vote caucus? >> no, but we don't need that. we still prettgood about the senate. you can never take these things for granted, but what i am saying is, i think there are intellectuals in the democratic

party who are the centrist talks. they more agree with us on the nature of these things and then the progressives, but the progressive run the party, and if they are in the majority, they call the shots. if we can get the majority, then what we need to do is work with those centrist democrats to put together a coalition to fix this. >> just to play devil's advocate here, i you want to draw those kinds of people into this exercise, don't you have to make some move in their direction on revenues? >> is it really feasible to think in the political system have today that this is a problem that can be solved with no revenues? >> you saw pat sis, a great conservative senator from pennsylvania, show how we would do that with his offer in the super committee, which has -- which is broaden the base, lower rates for groat's, and on a static basis, you can still get

more revenues. the neat thing about our tax code is the tax base is quite narrow. by broadening the tax base and hitting new rates that our program, you can actually deal with revenues that way. but let's not take our eye off the ball, which is spending is the problem. revenues still climb as a percentage of gdp, but nowhere near that. we have to deal with the spending problem. what i have learned in my 13 years in congress is if you first go to the revenue fix, what it does is this place the need to deal with spending. let's get spending under control. let's get fundamental tax reform that is pro-growth. our budt calls for a top tax rate of 25% for businesses. it is internationally competitive and is pro-growth and we can get through pro-

growth tax policies of broader, more reliable income stream to meet this government which we are getting back down to 20%. we think that is the way to go. >> is that the size of government that america is going to be ready for? >> it is what we have had for the last 20 years. >> summer happy with that and some are not. is there a consensus? >> the average is 23%. >> are you would take the government back to that point. >> i don't look at some magic number. what matters most is economic freedom. do we have an entrepreneurial economy and our entitlements under control? open ended, defined benefit programs are totally unsuainable because these are pay-as-you-go programs and we are doubling the amount of retirees in the country.

it is a consumer, patient centered system and we have to go to a defined contribution system where we finance the benefits for people who needed the most, the sick and the poor, and finance the benefit much less for the people who need it the least. that is a way to fix this problem, which i believe there are some centrist democrats who believe -- who agree with us on that, and to me that is the secret to fixing this problem. progressives want a government run health care system. they will not agree with us so far on lowering tax rates. they want higher tax rates. they want the top tax rate to go to 50%. in wisconsin, where i come from, nine out of 10 of our businesses file as individuals. we are going to crank up their tax rate to 50%. overseas, which in wisconsin

means lake superior. [laughter] the canadiens are lowering their tax rate to 15% on all their businesses. we have to be competitive. >> let's go to the core of that spending issue you just mentioned, the entitlement program, and specifically to what you did earlier this year. you put on the table a premium support alternative to the current medicare program. you either moved the debate or you have created the campaign ad for every democrat in the country next year. >> that have not shown me pushing an older woman off the cliff in a wheelchair. this is the plan that bill clinton's bipartisan commission recommended in the late 1990's. this is similar to the plan that alice rivlin -- we offered this plan. i believe there is a center- right coalition in the making.

premium support is basically the same thing fedal employees and members of congress have. you get a list of guaranteed coverage options, which works like medicare advantage, plans that are pre selected by medicare competing against each other for our business as patients, and then medicare subsidizes are premium based on who we are. doing it that way, according to the actuaries, makes the program solvent and wipes out trillions of unfunded liability and keeps our debt load it is debt levels from getting out of control. it also helps us get at held inflation. that is a longer conversation, but i think it is the right way to go with reform. the alternative is command and control, price control from this on license board of 15 bureaucrats that or appointed next year. what the medicare actuary is telling us is that by the end of

the decade, medicare will be merged ad rates lower than medicaid. they will start at 60 cents on the dollar and go down to 30 cents on the dollar. it will be unsustainable and the system is going to collapse. we think this makes medicare viable. it applies to 55 and below. we think it is the smartest way to go, and it is an idea that used to have bipartisan support, but now you have more aggressive leadership among the democratic party that is trying to use it as a political issue. >> the president did put on the table last summer in the conversations with speaker boehner the idea of raising the eligibility age for medicare. that is not what you would do, but is that a sign that the back has been broken on this, that this conversation is no longer a debate but an actual search for a solution?

>> the debate has been moving for a long period we could age reduction in our request as well. that does not fix the problem in and itself. the president has done one thing that has been constructive. he has acknowledged that medicare cannot just be fixed with tax increases, but it is going bankrupt. now that we have that acknowledgment, are of the taking the plan -- do you want 15 bureaucrats rationing this program and telling your provide what they can and cannot give you, or do you want to be in control? do we want to support people who needed the most? i like our odds, and the nevada congressional race that was fought over this issue went very well for us. we cannot duck this issue.

i have done over 500 town hall meetings in wisconsin talking about the specific ideas. we beat john kerry, but that is about it. [laughter] not from a big red area, if people see the facts, i think the respond very positively. >> one big picture question and then we will open it up to questions from the audience. when you step back from the picture we have been talking about, i am wondering what you think has really changed in washington. i am thinking abo the possibility that maybe you start out with spending but something has happened here, that we are having this conversation about where and when you cut spending, not whether you cut spending. i am not sure that would have en a conversation in this town 10 years ago. has something happened here that is better than the ugly picture that presents itself to the

country? >> the problem is from our perspective, we don't have partners on the otr side of the aisle who have brought plans to show h they would do things differently. we put out a specific plan that keeps the debt from getting above the 60's of gdp and goes down from there. we never came close to the 90% debt levels. the president gave us a budget that was just a rubber stamp of the baseline. has been over 900 days since the senate passed the budget. in the budget control act, they deem themselves appropriation number so they don't have to do budget next year. they decid for three years now, don't even offer a budget. so our government has not had a budget since the 2009 obama budget. side.'t have that other

the kind of tax increases you would need to close the gap are huge if you go down the be-50 route they were talking about going, 50 percent tax increase and 50% and spending. what i am trying to say is there are moderate democrats who do talk about these things, they are just not in charge. that is the point i am trying to make. i think the fact that they aren't having political problems to not offering a budget speaks to the fact that we are beginning to see rewards. >> a final thought, the art of politics is compromised, and one of the questions democrats raised is whether or not you could deliver a compromisof any variety, given the makeup of your caucus and the tea party. what is your answer when they

raise that? >> it is tough to talk about compromise when they offer nothing in return. it is difficult to see where you are going to compromise when you have nothing in the alternative. we realize the president took a path on his budget. i were thinking at theime was we will put our budget out there and they will follow up and start negotiating. they never ended upoing that. alan simpson i went to the speech with the president where he double down on demagoguery and class warfare and all that, and decided to fight us politically, rather than join us with an alternative budget to actually negotiate and compromise. what we get out of that is, they are very tethered to ideology and if we are going to get a compromise, we will have to win an election and then include moderate democrats to get one.

>> let's open it up to questions or comments. could we get a microphone up there really quickly? >> most corporate reconstructions, ceo's have a burning platform. there is an extra or internal event that causes change. sitting here this morning and listening to the sessions and the ones before, you wonder why ternal events needs to take place, as we witness the events in europe where there is significant meltdow i think many of us thought they would model through, but now we doubt they will even be able to muddle through. what external event would shake people on both sides of the aie into action? you are kicking the can down the road -- not you, but the

governme's kicking the can down the road continuously. obama said they were moving the ball but not kicking the ball down the road. what event has to take place? >> with the current government have, it would probably be a real credit crisis. the point we are trying to make with our budget i let's do this on our own terms. let's do fiscal consolidation and reform on our terms where we have -- that means it is probably an election that is going to have to occur to do it the way i just described it. our hope is that the credit markets see that and give us time to have the election to do this. europe is the big wild card. if we have a real problem and that precipitates a contagion that starts washing up on our shores, that is the fear we have. our hope is, we go to the

country in november 2012 and say here is what we will do if you give us the ability to do it. here is specically a plan to preempt the debt crisis, to get the economy growing, to make america competitive, an to do it on our own terms, so if we do win that election, i call it the opportunity society, the safety net versus the welfare state unmanaged decline. then we have an affirming election that gives us the ability to implement it and fix it. that is our hope, given that we don't seem to have partners on the other side the aisle who are sincere in working with us to get the kind of savings we need. it cannot fix this without doing health care. healthcare is the driver of our debt. you have to remember, they put in their health care law. they are not willing to open up that law. if they are not willingo open

up that law, we are going to have to wait until an election to fix this. our hope is that it is an election on our timetable to fix it, and our fear is that the bond market vigilantes' get us in the meantime, and then it gets ugly. >> this is a version of the same question that martin asked, sucks.is that kind of sock even if the ange in the white house a year from now and you get six months or so for everyone to get their feedback the ground -- even if all that happens, that is 18 months from now, and that is bullshit, i think. 18 months from now, maybe we get

something done? >> i agree with you, but we control one-third of government. we don't control the other two- thirds of government. we put out a plan with revenues on the table to get a down payment. our hope is to get a single or a double. it a first down on the football field. our hope is to get a down payment because what i personally think is if we could show the credit markets that the american government is completely dysfunctional, if we can get a $1.50 trillion down payment on the problem, that helps by us the time we need to really fix the problem, but we are not even seeing that. one-third of government is what would control. we don't control the other two- thirds. just leave me to be realistic about it, which is, we are going to have to have the ability to actually pass legislation and get a president to sign legislation. if we are going to go to the country and say here is what we

are going to do to fix the fiscal problem once and for all. i just don't think like in euro, a small austerity moves that move e retirement age in 2026 and trim the edges, that will not work. you need a real bazooka. u need to really fix these programs which are the drivers of our debt. health care and entitlements, and we are posing very specific solutions to do that, which will wipe out the debt problem and get us on the path to growth. >>unintelligible] >> from my own experience where i come from in wisconsin, people know there is a big problem and they are ready to be talked to like adults, not pandered to like children. when we see elections go against that grain, i am a living testament to the fact that you can win in a began an evenly divided district. my purpose in putting these

ideas out there three congresses ago or to demonstrate that the things are noonger third rails. if you can explain to people why we need to do this now and do it on our own terms versus an ugly credit market debt crisis process, the country will be there with us. we have to communicate this, and we can and we should. i think that is what we are going to do. >> questions, comments? >> you talk about communication. >> hang on a second for the microphone. >> he talked about communication. my question is, in the midst of an election year, a lot of different voices are speaking on behalf of -- how does the message across to be able to achieve what you are trying to do? >> our thinking on that was, we

control the house and that is it, so our actions are the best message we have. we have toct and actually pass legislation defining who will learn what we believe in. our budget is called the path to prosperity, a specific document that shows us all the budget reforms. we feel like our actions will help define us, and that is what we are going to be doing again. we are meeting with all the vaous people running for president, and each one of these people are pretty much by and large on board with the direction we are going. we are as unified as we have ever been. the budget bill is usually the toughest bill to pass. danny hastert said the hardest will he ever had to pass was the deficit reduction act. the hardest thing he did in eight years. we just cut $6.20 trillion over 10 years, and it was one of the easiest things we have passed

this year. we have 89 of these freshmen who came for a cause and not a career, and that has really helped us a lot. we are poised to do this and we are just going to go to the country and let them make the decision, the way we see it. >> congressman, thank you for taking the time. a couple of house hearings on the economy today. at 10:00 a.m., a house oversight committee on executive bonuses at fannie mae and freddie mac. at 2:00 p.m., a house financial subcommittee hearing on community banks. allied video also available at c-span.org. up next, "washington journal" with your phone calls. then live coverage of the house. members will debate and naon