with democratic representative paul tonko of new york, followed by senator johnny isakson, a georgia republican, at 8:30 eastern. and we will discuss the postal service that a decision to reduce service to cut costs, with bernie becker, a reporter from "the hill." [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] host: welcome to "washington journal" this tuesday, december 6. the question of televising the supreme court's upcoming arguments on the health care act goes before lawmakers. we will have live coverage on the senate -- of the senate judiciary committee hearing. dick durbin and chuck grassley introduced a bill requiring open proceedings of the supreme court to be televised. the house financial-services

committee holds a hearing on congressional insider trading. the committee will look at allegations members had enriched themselves through legal stock trades based on non-public information. house and senate continue to debate whether or not to extend a payroll tax cut holiday. democrats unveiled a new proposal monday and speaker boehner bank is working on his own plan. it should congress -- should congress compromised on a plan? here are the numbers -- if congress were to not extend this payroll tax cut, here is what you will pay. according to "cnn monday." -- "cnn money"

that is what happens if it is not extended. as we said, senate democrats unveiled what they are calling a compromise. house speaker john boehner has his own plan. we want to get your thoughts on this today. should there be a compromise on it, should the congress move forward on extending it? here is "the baltimore sun" this morning. it says this about what the senate democrats proposed yesterday.

on the house side, house speaker boehner hopes to build support for extending the brakes with a larger package -- and and then, there is also a proposal put forward by senator susan collins, a republican from maine, and a democratic senator from missouri, clear mccaskill. this is what they propose --

a lot of proposals floating out there. mark, independent from hawaii. should there be compromise somewhere along the line between republicans and democrats to extend this, and what do you like best? caller: well, a few paragraphs ago you were reading about food stamps. that i missed because i was talking to the switchboard. basically that is my situation. i am on entitlements, living on the poverty line, neither on poverty or prosperity. but this is strictly self interest that the working people are supporting me. but i notice a disconnect

between but congress and the taxpayers -- the congress and the taxpayers and i see a lot of alienation and apathy among the working populous as far as voting and being involved in public affairs. i being sort of the answer is this -- and to desist to start -- antithesis to starr jones -- host: should congress compromise on the tax holiday? caller: a lot of people, they count on their income tax return. if you get $1,000 less, as a working person, that will put a herd and make a difference. i know congressman ron paul, he has a plan where he would

eliminate the federal income tax. we need to do away with it altogether for everyone. if this was done, the government would still have the same revenue it had in the year 2000, its -- which is what congressman ron paul said. corporate tax, capital gains, fees. we really need to move toward not what the rate is but do away with it altogether. host: steve, a republican from scottsdale, arizona. caller: the democrats should think a little bit more like the republicans. i think they really needed to think it through. we got to take care of the country first. blocking everything. trying to be environmentally correct all the time. i just think they should start thinking more about the the financial, fiscal state of the country more than these bleeding

heart liberal -- host: do you think there should not be a compromise, that we should not extend a payroll tax cut? caller: i think the democrats should think a little bit more like the republicans so that -- just in general. i just think they are a little too bleeding heart, to "poor me"and i think they need to start thinking really hard about what the republicans stand for. host: president obama went to the brady room yesterday before reporters to talk about this extension of a payroll tax holiday. here is your argument for it. >> not only is it important for the economy as a whole, but it is also important for individual families. it is important insurance for them against the unexpected. it will help families pay their bills. it will spur spending. it will spur hiring.

and it is the right thing to do. and that is why my jobs bill i propose not only extending the tax cut, but expanding it to give a typical working family tax cut of $1,500 next year. it was paid for by asking and little more from millionaires and billionaires. host: michael, a democrat from georgia. go ahead. caller: really showing their true colors. the only people they are thinking about are the millionaires and billionaires. if they included the millionaires and billionaires, they would not worry about how to pay for it. host: republicans have argued that -- some republicans have argued that they want this payroll tax cut holiday paid for by offsets in spending, not by taxing millionaires.

who they call job creators. caller: they were not worried about how to pay for it when george bush -- now when barck proposes it -- barack proposes it. it is all about being barack obama. host: john, a republican in new york. caller: moderate republican. i noticed republicans have got to the extremes and basically representing more than just the moderates, to becoming more and more representative of the richest. i do not think they will give obama this compromise because -- and they have shown, the extremists want to torpedo any

thing obama does so they can basically run against him in the presidential election. as far as i am concerned, most of the money right now that is available for the economy is sitting out there in fewer and fewer hands, at the top. they don't need additional tax cuts. we need realistically to wake up and to start going back to what works, progressive tax system, which will get this economy moving and get everyone else is reasonable form of living. host: are you opposed to extending this payroll tax cut holiday? caller: no, i am for it, because i it -- but i do not think they will do it because they want to torpedo any thing obama does. they don't care about the economy. host: do you think this is that how -- politics for republicans? house speaker john boehner and senate minority leader mitch mcconnell, the two leaders, said

they are for extending these -- this break. but others, as you said, some rank-and-file members of both the house and the senate did not agree with that. caller: however they decide to reconcile this amongst themselves, i don't know. but i think, they have the wrong goals, it does not represent the majority. they have their constituents and we know what they are, the extremists in the party. we do not have many moderate republicans. and therefore we have the result. everyone else is suffering but the few are living in the lap of luxury. host: listening to senator john kyle's speech on the floor yesterday, and he referenced column written by bruce bartlett back in august, the case against a payroll tax cut. here is what he says --

donnie, independent from massachusetts. your thoughts. caller: they should compromise on anything put in front of them. i can't believe -- i hear people saying about the rich living in luxury. i am not rich, i am not poor, but i worked all of my life. it is all it takes. you have to go out and work. you can't go client and crying to the government.

-- crying and crying to the government. if that helps people for the holiday, but it is fine. but i am so tired of hearing people say take from the rich. some people work for what they got and they pay plenty of taxes. and they employ people. host: to illustrate your point, senator john kyl was on the floor talking about the issue of wealthy americans. democrats say they need to pay their fair share of taxes, and that is why part of their proposal includes a surtax on those that make more than $1 million. here is senator kyl. >> what the president therefore is asking is that half of what the employee pays, or 3.1% of payroll, not be paid for one more year. now, the first reason one should think carefully about extending this holiday is, as i said, this is what funds and social security.

as an employee, the less you pay in, the less you are going to get out. if you are ok with that, then think about the program writ large. social security is in big trouble. we all know that. and as a result, the more we take out of the social security trust fund, or unless we put into what -- a better way to put -- then the less money there is to pay benefits for people who are in retirement. host: senator john caught -- john kyl with another argument, that they did not want to take away from the social security tax fund by extending the payroll tax holiday. i will show you what he had to say about wealthy americans paying their fair share a little bit later, in a few minutes. let's go to a democratic caller from montgomery, alabama. you are on the air. you've got to turn the television down. i will put you on hold. columbia, maryland.

brad, republican. caller: good morning. i am wondering if you could clarify something. we are talking about extending the payroll tax. i thought that was part of the super committee this agreement that we had last week? host: some said that if the super committee had come to some sort of a deal, they might have included in that a deal an extension of the payroll tax holiday into 2012. but they did not, as you know. and so, that is why congress is debating whether or not to extend the current payroll tax holiday. caller: but it was not included in the bill passed in august? host: right. the cover and apparel tax holiday expired december 31 -- current payroll tax holiday expires december 31. snd so, in january, your paycheck is scheduled to be

less. so, they are trying to come to some sort of a deal to extend it. but there are democrats and republicans in both the house and senate who do not want to extend a payroll tax cut, including senator joe manchin, democrat from west virginia, saying why double down on something that that not work the first time. caller: ok, well. extending the tax cut -- i of one that believes that it did not work in 2008, and there was a statement made a few minutes ago that when people were concerned in 2001, it did not stimulate the economy, either. i do not see our economy taking off and rocketing forward. i think if we extend this, people will save. that is my thinking at this point. i am going to save the money. i am not going to spend the money because i am nervous about

where my job is to be next year. host: did you notice your pay increase? caller: pardon me? host: when this first past, did you notice your pay increase? -- when this first passed. caller: i noticed my savings increase because we started putting more money away. there was, back in 2008 -- yes, we knew there was more money coming out, but we were not spending more. and i think it is time our government started thinking about cutting some spending. a year ago, the president had his that commission talking about what the government needs to do. he has been running away from the recommendations of the debt commission ever since. you can't do it simply by taxing the rich. i am 57 years old. and i happen to believe that we

are going to have to go after entitlements -- social security, especially. i would be slated to collect it in 8 or 10 years. i happen to think the retirement age should be raised to about 70, and then means test social security. host: we are going to keep talking about this with all of you, but first, some other headlines. we are learning from the associated press about when attacks in afghanistan -- twin attacks. that is the associated press this morning. and then in 2012 politics, newt gingrich has his first ad in iowa and head of the january 3 caucuses. this is a story in "the washington post." "the washington post" also

reported a new poll out of iowa showing gingrich has a strong lead in that race. also, "houston chronicle" this morning has the story about rick perry. his security tab keeps rising. that is news of 2012 politics. we will give you more as we continue. but in international but -- affairs, the front page of "the

wall street journal" says -- inside, here is what the graphic looks like on the s&p warning. this is what it looks like for those 15 eurozone nations, and the warning from s&p. let's go to peter, independent in chicago. peter, we are talking about whether or not to compromise or extend the current payroll tax holiday. caller: i would like to point out real quick that many states have been increasing their payroll taxes. and a lot of this money that we have been getting, should have been getting, has been going to

the state. what's -- once we are not getting any more we will actually be making less than we were before. thank you. host: democratic caller from montgomery, alabama. you are on the air. caller: the compromise between the republicans and democrats is essential for the state of this country. once we take a look at the tax cut that is going to help those that are working, they are going to be able to spend more money. in the state of alabama, we are looking at food costs have gone up, we have oil going up, so the tax cut, even though it will help of the individuals who are working, it is important that we do that. one of the things that i see -- i am a retired military, after

27 years, and once we see people coming home, of those funds that we were spending, where we were spending over a billion dollars a month overseas to support the military that was there, that it is going to be a cut that we don't have to do that kind of spending. when the president was talking about bringing home the military from these war environment, talking about the department of defense cut, that department of defense cut it did not have anything to do with the military and their salaries. it had to do with the kinds of things -- like we had those companies that were over there thatdhe republicans owne were supporting these individuals. host: we will leave it there. you can also send an e-mail. here is one family in florida --

if you want to send us a tweet, go to twitter.com/cspanwj. you can also pose your comments on facebook this morning. we posed the question there. we have about 33 comments going so far. maria, independent from indiana. caller: good morning. i am in support of a compromise between the republicans and democrats. the economy is still fragile and

we don't want to jeopardize things by an increase. i do support a tax increase once the economy gets back on its feet. we do need to address the deficit, it is something that concerns me. i have been in this country for over 25 years. very concerns about the deficit. this is something that needs to be addressed at a later date. i am all for a tax increase but this is not the right time. host: have you voted for democrats and republicans in the past? caller: yes, ma'am. i have. host: let me ask you as an independent, because you are saw after by both parties -- in the upcoming 2012 race, you are saw after, both democrats and republicans won the independent vote. which party is winning on the politics?

caller: i just see bickering. anything winning in this situation. all i see it is they are jeopardize in the country by not compromising and thinking about the benefits. what i see and what really concerns me is each party is thinking only on the political future and not in the future of our countrythat -- country. that really concerns me. i come from venezuela. i was a young voter when i immigrated to this country and i see the same thing happening in the country that happened to venezuela. and look where that country ended up. we don't want that. host: on politics, if you go to whitehouse.gov, you can find a ticker, the countdown to the

payroll tax holiday expiration date. there it is. here is "the washington times" frontpage. and then, more in 2012 politics. both former house speaker newt gingrich and now gop candidate, former massachusetts governor mitt romney, come out in favor of extending the payroll tax holiday. that is "the new york times" this morning with that story. here is senator john kyl on the floor talking about the democrats' argument that is not pay their fair share. >> the top 1% of the country earned 20% of all the income. that is pretty good. but they pay 38% of all of the income taxes. the top 2% earns just about 20% of the total income. they pay over 48%, almost 50%,

almost half of all the income taxes are paid by the top 2%. some people say, what about the payroll tax. ah, that is exactly what we are cutting. that is what they are getting a tax holiday from paying. so, you have the top 2% of the people paying 50% of the attacks. what is the bottom half pay? it turns out the joint committee on taxation estimates 51% of all households had either zero or negative income tax liability for 2009. you have to% of the people paying 50% and the bottom 50% paying none. in fact, the top 5% pay a whole lot more than the bottom 95% combined. host: compromise on the payroll tax holiday. do you support the idea of the two sides coming together to extend it? president obama will be pushing for that today when he travels to kansas to push for the payroll tax holiday.

this is "usa today" with their story.

go to c-span.org for our coverage of president obama's speech today. caller: good morning. i wanted to interject that we are really losing sight of the picture. compromise for the payroll tax cut holiday? social security for the first time starts going down into the general fund. it is bankrupt. if we continue to draw the money out of it with a payroll tax cut -- yes, it helps people out but the long-term financial picture of the country, it is not good. a $3.60 trillion in annual budget.

$1.40 trillion in the deficit. we cannot continue this. yes, it would be nice, but we cannot continue this. it has to be cut. we cannot continue to spend like this. that is all i got to say. host: on the domestic front, the front page of "the washington post" it says -- "the washington post" is the only one with this headline, that he may lose his job. and a report that the fda plans to put plan b in drug store aisles. it could be available to all without a prescription. and the latest on afghanistan -- we told you last week about a summit taking place in germany. the allies that met there said they expressed their support for afghanistan assistance for many

years. as you know, pakistan officials were not at that meeting. sarah, independent from chicago. good morning. caller: good morning, c-span. thank you for taking my call. i think you said that it was susan collins and claire mccaskill. i agree with their proposal. i believe it should be a -- that the tax cut holiday should be extended, because of the simple mathematics. if you take that much money out of the economy right now, i think it would have a devastating affect. the republicans, they are signing that agreement with grover norquist, never met a tax cut that they did not like. it is disingenuous for kyl to

keep making the point. the bush tax cuts have not been paid for. i really think it is disingenuous. host: widely liked this idea of susan collins and claire mccaskill? >> i keep feeling the -- hearing the argument that the small businesses will be hurt. i think this stipulation that exempts the small business, that is a good distinction. host: as many of you know, only one republican last week, senator susan collins of maine, voted with democrats on a senate bill that mirrored obama's proposal. is in "the washington post" this morning. steve, independent from florida. caller: how are you today? well, when the people who have the most to lose, the 1%, pay for our transgressions of

our200's, the iraq war, -- transgressions -- transgressions of the 2000's, the iraq war, when they pay their bill, the rest of the country will listen and maybe we will vote republican. i am and idb. i vote mostly republican. but i will never stand for what happened in the 2000's, and that is not paying for the wars and then the people will have the most to lose, the 1% -- i am not saying i know a lot of these people but i know their style of thinking. we have to pay for that, and you cannot take it off the middle- class because i think we all want to be middle-class at least before we even have a chance to be a steven jobs or somebody like that or bill gates. i just think the 1% needs to

step up and pay for those wars because i have the most to lose when the country goes down. next year, i did not know if i will vote for barack, but i hope it will be eight -- i will be able to and if it is against newt gingrich, i will. host: here is "usa today." and then in "the new york times" this morning --

nick gingrich's out with his first ad in iowa -- newt gingrich. >> some people say the america we know and love is a thing of the past. i don't believe that. because working together, i know . can rebuild america we can revive our economy and create jobs, shrink government and the regulations that strangle our businesses. throw out the tax code and replace it with one that is simple and fair. we can regain the world's respect by standing strong again. being true to our faith and

respecting one another. we can return power to the people and to the states with income so we will all have more freedom, opportunity, and control of our lives. yes, working together, we can and will rebuild the america we love. i knew gingrich, and i approve this message. -- i am newton gingrich, and i approve this message. host: that was his first at an iowa. "the new york post" reporting this morning that nancy pelosi said yesterday in an interview tht when she served on the ethics committee, that the ethics committee has a lot of what she calls bird on newt gingrich. here is the quote --

that is "the new york post" reporting that. back to your questions -- our questions all of you. titusville, florida. you are up next. caller: gingrich is talking about putting children and mopping floors, and he is not thinking about the overall folks who have already been laid off, unemployed.

and the folks up in congress should be getting together and compromise and get things done. getting with each other and coming up with gimmicks to avoid the big question. i love america and what is going up there, it is not right. it is not correct. god bless america. host: mike, republican from wyoming. caller: thank you for the show. i would just like to say that all senior citizens out there need to keep in mind, it seems like it is kind of smoke and mirrors and everybody says payroll tax holiday and a lot of senior citizens who are not working -- payroll tax, the de not worry about that -- but it is a social security tax holiday. under funded this year by 33%. and barack obama wants to extend

that and increase its down to 3.1% taken out, 50% underfunding the social security system. you have to consider that everyone's individual money going into their funded -- we get a letter every year saying this is how much you contributed, that is less money being put into my funds and everyone else's fund to fund the system. when are we going to put it back up to a fully funded 6.2%. if we get a republican president in, do you think he is going to -- four years? we cannot keep under-funding social security, my point. host: the latest proposal by senator casey, a democrat from pennsylvania, tried to address the concerns is laid out by both republicans and democrats about what it will do to the social security trust fund.

their proposal would pay for with a combination of gop that you back proposals to raise fees fannie mae and freddie mac charge for mortgages as well as a surtax for millionaires. of the revenue stream would generate almost $185 billion and also replenish the social security trust fund, is what they argued. caller: well, i have not heard those numbers. i did hear about the compromise deal. the surtax on millionaires, when we look back on what the bush tax cuts were, that amounted to $70 billion on anybody $250,000 and over. now they will go 1 million and over so i will roughly guess it is $50 billion, and then you said the republicans had -- what was it, and a and freddie mac, coming up with 185 south a little bit large. the numbers i have heard the wind down to 3.1% is $175

billion -- going down to 3.1%. 185 is convenient to say we fully funded it, but i guess the bottom line is, we already had that money going in fully funded from everybody's paychecks. we all know we have to pay it. we are all workers. i am 59. we have to keep paying into the system. so, trying to come up with a different way of funding it just does not make sense to me. to me, i guess the money did not seem like it was a big deal. my co-workers i asked say, what did you guys spend extra money on, and they were like what extra money. host: they did not notice? caller: they did not seem to notice because it was left to right in your check and nobody paid much attention. nobody went out and bought a new car or refrigerator or washer or dryer as saying, my gosh, i have $83 extra. host: "the washington times"

this morning, the nation section. marvin, a democratic caller. caller: i agree with the tax holiday, that it should be approved and compromise is needed. you read the part about how much the rich pay. the rich, if you look at it all together, they have 85% of the wealth. they should be paying 85% of the taxes.

if you get 85% of the money, you are supposed to pay a percentage of the taxes on the money you all. the 15% to make up for the 85% -- 85% of the money, you should pay 85% ofax burden, period. host: pat, democratic caller. caller: this is steve. good morning. how are you and your little family? host: just good. caller: listen, greta, that's their in 1969 -- back there in 1969 i started my own business. my first production unit. when i turned over the full businesses to my son in 1999, we had 700 workers. and now we are down to about 300. and the reason why is what the

community organizer did and the 111th congress. when i give you these numbers. we are looking at what the law says right now. all of the laws, either as they are written now or going into effect. host: i am running out of time here. caller: what i am going to tell you is that basically with the increases in the morgue -- marginal tax rates, the 39.6, the social security, obamacare, medical portion of medicare, portion of the paychecks and stuff, and that surcharge is going to get us to a marginal tax bracket of 60%. host: all right, pete, i will it there. two headlines on 20 swat politics you might be hearing about today. this is an "the washington post."

this is a story from "washington times" about herman cain's campaign funds. it questions what he will be able to do. two stories you might be hearing about for what today's news cycle. coming up next, we will continue this debate with the two members of congress about whether or not to continue this payroll tax holiday into 2012. up next, we will talk with the democratic congressman paul

tonko from new york. we will be right back. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> pay a dollar an hour for your labor, have no health care, the most expensive single element, have no environmental controls, pollution-control, and no retirement, and you don't care about anything but making money, there will be a giant sucking sound going south. >> the ross perot spoke out against -- about trade issues during the 1992 presidential debate. he made two attempts for the presidency. the first time getting over 19 million votes, more popular votes than any third-party candidate in history. although he lost, he had a lasting influence on american politics. he is our final candidate in our 14-week series, "the contenders ." live friday, at 8:00 p.m. eastern. it go to c-span.org

/thecontenders. it is so convenient to listen to c-span anytime, anywhere, with the free c-span radio app. it streaming audio of c-span radio and all three television networks 24/7, and also lived in -- listen to our interview programs. c-span, it is available wherever you are. find out more at c-span.org /radioapp. >> part of the point of the book is to change the way we think about change. to make us much more aware than we are instinctively of the potential suddenness of disintegration or collapse. to make as realize that what happened to the soviet union, what happens to the financial system in 2007 and in 2008 and what is currently happening to the european union is the kind of thing that can happen to any complex system. it can suddenly nonfunction. >> this weekend on "after words"

economist and historian niall ferguson. saturday at 10:00 p.m. eastern and sunday night at 9:00 p.m. eastern and pacific. and craig shirley looks at the japanese attack on pearl harbor and the reaction by the american government, military, and public. saturday at 1:00 p.m. and again at 9:00. and journalists and former judge catherine crier on how partisan politics is affecting the country. her new book is about what americans was due to save the republic. watch book tv every weekend on c-span2. >> "washington journal" continues. host: we are back with congressman paul tonko, democrat from new york and member of the budget committee. let's begin with the payroll tax holiday, whether to extend it in 2012. you saw senator casey, to the

floor but the senate democratic proposal and house speaker john boehner is working on his own plan to put on the floor. it would include an extension of unemployment benefits. let me start with the house. could you both for whatever speaker boehner puts together if it includes an extension of an unfunded benefits as well? guest: the devils are in the details, but in concept i believe we need to extend the benefits that and how were the middle-class. we saw that getting dollars into the local economy when we worked on some issues earlier in my first term enabled that local regional economy to be strengthened, because when you are assisting the middle class, they are going to go to be essential out there, they will invest and essentials. the sluggish economy is improved when you give purchasing power growth to the middle-class. so, yes, i support an extension of the payroll tax cut and unemployment insurance benefits

being extended. but it has to be done correctly. i think the pay-for here needs to correct the errors of the past. i think if we can go forward and improve the policy, the tax policy, and encourage investment in america that the economy, those in essence that are essential -- i represent a district, greta, which is one of the highest growing in the country for clean energy, innovation, and high-tech jobs. that came with investment. it just did not happen. i think through a package where we can strengthen the middle class outcome, provide more purchasing power, enhance consumer demands, which grows manufacturing in this country, if we can make it in america, develop a sound manufacturing policy all buy and powering -- empowering the purchasing opportunities of the middle-

class, then we can go forward with a good package. but this avoidance, this rigidness to grover norquist -- they did not seem to mind its tax cuts for middle-class but if it will continue millionaire and favoritism, i might have a problem supporting something like that. host: you would probably vote know if there is not a surtax on millionaires? guest: i think we need to bring it back to a balance. everyone will talk about the job creators. while we gave millionaires and billionaires a tax break, while the spending was authorized in previous sessions of congress -- they don't acknowledge they borrowed all of that from china, saudi arabia. they borrowed totally what was needed to spend on millions and billing errors for the tax cuts.

8.2 million jobs lost during the stretch. this did not produce job growth. it was favoritism. and now we need to produce a benefit. when you talk of a surcharge -- people making 200,000 or $300,000 a year would not be impacted by the surcharge but anyone making $1.2 million would have a surcharge on their 200,000 additional, beyond a million. so, i think the surtax is not -- sometimes it is misunderstood and certainly it shows a fairness here where a great number of people, all within the ranks of the middle class, can be strengthened by a more favorable balancing of the scales, if you will, of tax liability, tax burden, and there needs to be a give for all elements to make it work. you cannot just cut investments in the middle class and raise

some elements like a bit last december. host: we did show this to our viewers earlier but i want to go back and have you respond to senator john kyl. he addressed this issue of millionaires not paying their fair share. take a look. >> the top 1% in our country earn 20% of all the income -- that is pretty good. but they pay 38% of all the income taxes. the top 2% earns just about 28% of the total income. they pay over 48%, almost 50%, almost half of all the income taxes are paid by the top 2%. some people say, what about the payroll tax? ah, but that is exactly what we are cutting. that is what they are getting the tax holiday from pain. you have the top 2% of the people paying 50% of the taxes. what do the bottom half pay? oh, the joint committee on taxation estimates 51% of all

households had either zero or negative income tax liability for the tax year 2009. so you have to% of the people paying 50% and the bottom 50% paying none -- 2% of the people pay 50%. at the top 5% pay a whole lot more than the bottom 95% combined. guest: there is no denying in my district, and i am certain it is true in my country, the tax burden has come upon the middle class. we need to look at the total picture. school taxes, property taxes, user fees, hidden fees that have been utilized to balance the budgets while we were doing the tax-cut frenzy for those on the top. i think it is very easy to document. you can take statistics and make them say anything. but talk to people out there who are having a tough time making ends meet on a middle income salary. and it is why we saw such an

improvement when you offered middle-class americans on average a thousand dollar benefit with the reduction of the payroll tax from 6.2% down to 4.2%. it helped tremendously and also helped small business. some of these stats about how much you pay -- there is no denying we reduced tremendously the burden on the highest. host: one of your democratic colleagues in the senate, joe manchin from west virginia, was quoted as saying i cannot find any people who even know they are getting it. then he went on to say, why would we double down on a policy that did not work? guest: a policy that -- host: saying that they will tax holiday have not stimulated the economy. guest: i think we solve the unemployment rate now come down to the lowest since the recession. i think that we did not get into this problem overnight.

we need time for us to work our way through. but i think if you offer a payroll tax holiday to not only employees, but to employers, you will see -- the engine, i think some of the economy is small-business. it created about 65% of the jobs in the private sector. and certainly in the last couple of years -- it is the engine i see working. when i talked about the hub of comeback in my district, where we are perched on the top in many of the measurements out there in terms of job creation and clustering and high-tech and clean energy, that came about through small business. putting together innovation, formats, concepts that are producing an idea economy and those ideas require investment.

investment in r&d equals jobs. host: ed is a republican from louisville, ky. guest: good morning. caller: yes, we need to set it up and pay the taxes. tax revenues from 401k programs that should be paid in now, in my belief. and there are any number of ways that we have been trying to prop up corporate america. the taxpayers are going to back to pay it. let's just get on with it and make it better. guest: i could not agree more. i think there are loopholes and benefits that are hidden that ought to be cleaned up and i think the tax reform here through all strata of it in, and incorporating the business committee, where we can reduce favorable outcomes, where we can have fairness rule. this is what i hear at home.

my middle class tax payers are saying we want fairness, we want fairness and we don't like to struggle paycheck to paycheck. and we know, too, if we balance the revenant equation with fairness then we can move forward with the investments that are essential. so we can cut where we can so we can invest where we must. i saw the empowerment that came with investment in my congressional district with state dollars and some federal dollars that really grew the innovation economy. host: rich, democratic caller from pennsylvania. caller: i would like to say some comments i like to make quick. i hear the extension of the tax and unemployment -- but what about somebody -- you know, i have been out of work for quite a long time. i put in application after application. then i go to temporary agencies like -- you know, all of these temporary agencies paying 8 -- i saw one $7.50 an hour, $8 an hour. i feel like these companies are

taking advantage of the american worker because jobs are so scarce. they are paying only $8, $9 an hour, which, you know, you are not making any money. how you survive on that? while the temporary agencies are actually making $5-- they are mt they are playing the employees. they are taking advantage of the american workers. unemployment insurance benefits, people get wrong, it is an insurance. it is an insurance benefit. what about people who have exhausted it, and extended to those people. something has to be done for the people who exhausted it. guest: jobs are the highest priority out there. we need to continue to work in a

way that partners with the private sector, cut invest in job creation and job retention. -- co-invest in job creation and job retention. their massive cuts being made to those efforts, community colleges under attack by the majority in the house. the majority would love to reduce some of the investments made in community colleges, which happen to be the go to not only for matriculation but for providing training and retraining. also, when we looked at at the senator talking about the tax burden versus the income, there is no denying again that the top of the income strata sots wealth grow by 275%.

all while the middle income curve was flattened,. 15% increase. that is unsustainable. you need someone to purchase your products. you need someone to be educated and trained well enough to build your product, manufactured products. so there are balancing acts here that are essential. if we can go forward and invest as other nations have done with their private sector to enable us to compete effectively in a global market, where there is a race on innovation in clean energy formats, we can make many things happen. i am part of it -- a group that supports strong efforts for manufacturing in america. it was a sector totally ignored in that decade and have before i arrived in washington. they ignored manufacturing and focused on the service sector. and very narrowly on the financial sector.

the report -- the performance there was dismal. we saw what happened to the american economy. we need to focus on manufacturing and on agriculture and on the all service sector. partnering with the private sector. host: this tweet from john in north carolina. we will let you respond to that, but also eric, an independent in pensacola, florida. caller: i have some critiques for some of your basic tenets. i will say this as respectfully as i can. the statement that you made recently, we are supposed to do what people want. no, you are not. you of solano to the constitution and you treat people equally, not like a

teenage girl complaining about -- not getting what she wants. your need to do not equate to a right. here is another thing you said, we let reach people keep their money. it is not yours. who the heck do you think you are? congress is the one that is the problem produce stand they're acting like it is some sort of organic action. it does not happen organically. you costed. this is the problem. you have such alien believes it is amazing. guest: it is all about tax policy that can inspire a good outcome, if they can get actuated growth of private sector jobs in the economy. in this global growth -- this global network it grows more significance over time, it is important see what happens in

other nations. what you see there are staunch investments in innovations and ideas. we're not making those investments and we are falling further behind. when it comes to the tax situation, i am not looking to tax anyone unfairly. i am asking is to have a sharing the burden in reasonable measure. there is no denying that the middle-class in this country has been suffocating because of poor policy that has really put all the burden upon them. and as we further cut programs here, essential programs like education, higher education, research that equals jobs, health care opportunities, these of the dynamics that need to be addressed. i am asking that we have a balance there, that will restore the vitality of our economy, simply by putting middle-class workers into the employee ranks.

and not settling for an unemployment situation that was impacting our economy and our economic future. the deficit is driven, i believe, even deeper by unemployment and jobs now are the huge priority that ought to reign supreme. how you get those jobs circulating in our nation's economy, through investment, of a certain order, and not an overburdening of governance, but a reasonable use of government in a way that takes the risk out of such a way since in a very difficult economy and absorbs some of their risk in order to inspire progress. host: donna on twitter. guest: i would agree with that totally. by empowering our middle-class, we are enhancing their purchasing power.

purchasing power produces the demand. if we invest in and make it in the american agenda, if we revitalized manufacturing, we have every reason to believe that we can grow our economy. let me share anecdotally with few of is that i made recently in my district. -- a visit that i made recently in my district. this is in the context of a business panel that we have established. our small business panel which does round tables also tours in the district. recently, it toured with someone who said that there are thousands of jobs that could be available across this country in manufacturing, but there is a need for highly trained people as they moved to an automated manufacturing project. that automation is coming -- it was rector fitted to his personal business.

it was ideas coming out the higher campuses in my region. parable the train workers at a community college to fit that need -- they are able to train workers at a community college to fit that need. that really inspires a foundation that is as strong as it can be. as a sophisticated society, we were there in the industrial revolution to move in that -- move manufacturing along. we invested didn't. that challenge to an american society, a sophisticated society like ours, is to continue to build by research and ideas the new products line required by society today. and it is demanded of us and we need to step up to the plate by investing in those appropriate avenues that will get us to that next threshold. host: back to payroll tax debate. here is an e-mail from philadelphia at going economists

who have been critical about whether a payroll tax holiday stimulates the economy. guest: i think the process there is to have fairness and look at the greater picture. the big picture includes property taxes. i have more people telling me they cannot sustain the situation. they may be threatened to continue their hold on the american dream because they cannot afford to live in their home. so by investing, by having the sort of involvement here where we can provide relief to the middle class, and at the same time, utilize this package where

you have the surcharge that enables us to invest in the economy, allows us to invest in programs that will not have to be done locally with a property tax increase. i think we have to balance all of this and weigh the steps along the way in order to keep people to reach out and realize that american dream. that american dream is beyond the grasp of a growing number of people. i think that is the frustration expressed in that comment is about. >> bruised right to back in august, the case against the payroll tax holiday. he made four points for the first being with that person in them. the second is that it helps workers with no need for it and will only pocket the tax savings. we heard that from a few of our viewers this morning, saying that they hardly noticed and saved the money. >> when you look at $1,500 per household on average, that is a

meaningful measure. >> over year. >> i think it is a meaningful measure for years -- for many. an additional relief for the top 1%, i would have to argue that the investments made on small business included in the payroll tax reduction, it enable them to go forward and produce jobs. i see of business in my district making sound business decisions to grow the small businesses in the way that provides a sustainable level compared host: a republican in florida. caller: so much to say in so little time. a couple of callers mentioned the word fairness.

i am a guy whose parents never owned a home. my grandparents came over from italy. i quit high school, my parents quit high school, and you're talking about the failed system and education. we can go through so many of these things, but fairness is exactly that. how many dollars can you extract from billionaires' are millionaires above this threshold? you're talking about this to linda thousand dollar figure. it just makes people feel good a bottom of these latter, as opposed to empower and those folks and saying how many americans have come from nothing, many of your colleagues in congress and make yourself have come from a place where you started with nothing. you took an opportunity in a country that is like no other. you are now sitting in congress. i do not know you that well, but i would guess that many of your colleagues have come from a place of know where, if you

will. if that succeeded because of this american opportunity, this is not about a payroll tax cut. that is a political bridge -- that is the wedge, how do i get more votes. that has broken our system. we have this side or that side instead of the american side. host: let me get 10 in who is an independent in california. good morning, tim. caller: i do not think they should extend as payroll tax cut. i think it is just a gimmick. as your previous caller has said, it was engineered for political reasons. it could pit the democrats against the republicans and democrats could see, well, they will not give relief to the middle class. i think what we need to do,

these congressmen need to start looking at the fed. are so security fund needs money, so what do they do? they cut the money. we will do some budget math and put it back from the general fund. well, how much money do they already owe? they owe social security so much money now they can never pay it back. that's why they want to eliminated. guest: when we look back at recent history, with the american recovery and reinvestment act, the dollars that work the quickest the restored faith in the regional economy are those that went to the middle class with a tax cut, and that was light compared to the payroll tax benefits. it was proof positive that it enabled us to see the bottoming out of the economy and began to rise precipitously around march

2009. that recent history ought to inspire us to know that -- look, this is not the cure all. it is to continually invest in the economy, to serve that economy that allows us to grow through a difficult time in our nation's economy, our nation's history. and also make those investments that are and has -- that are important to job creation. host: and this is for a one-year extension. would you be for bringing the payroll tax back to 6.2% after that? guest: we have to see where we are with the economy. might mean a slow and steady climb back up. it could revitalize the economy and allow us to make those investments. people are talking about the burden we are placing on people. let me remind you again that it is the 275% growth of the very top of the pyramid that is

documented. that is real. and the flat lining of the middle class, they are probably the most powerful. we cannot twist those from what they really are. they are straight forward and there is a flat line of the middle-class and the power of that top echelon of income strata, that is unsustainable. you need have demand. -- you need to have demand. the debt was taking private- sector jobs. so there is a comeback here that will take awhile. >> if laura has these thoughts on twitter. a democrat in schenectady, new york.

caller: good morning. i want to talk about the payroll taxes. not very many people address the fact of how regressive in nature these payroll taxes are. the guy who makes $50,000 for married couple that makes $30, they paid a 6.2% on 100% of their wages. but an individual who makes $200,000 pays about the effective rate of half of that, 3.1%. say to extendyone the base that it is computed on? host: there are those of us to believe that would be helpful. thank you for that call because it highlights the egregious nature of this whole tax. when we are offering the benefit to someone below that threshold , artificially placed on the

system, we are empowering those below that cap to a greater measure than go beyond the cap. it adds another voice for progress of outcome that was not discussed here this morning. >> austin, texas, a republican, go ahead. caller: i am ashamed of the republicans. reagan raised taxes 11 times while he was in office. annie gave amnesty to illegal immigrants. by now the republican party is screaming because they want to give a payroll tax to people that are working. why weren't they screaming and saying that this is going to cost money and they cannot afford to do this? when it came to the rich, they said, we can give them a free ride, we can cut their taxes, and never mentioned anything about where that money was

coming from. that is why we are in the debt that we're in right now because of they gave all that money to the rich. guest: an important contrasts. around the turn of the 2000's when we saw the president and congress move forward with billionaire task cuts, the cost of two wars, medicare part d., the pharmaceutical situation, all that was promoted as spending with never having to pay for. in his passion -- in this package, there is a pay for. we do it professionally and honorably, and this is the extension for employers and employees, we just heard how the benefits are much more prevalent for those in the true income

strata. here is my pay for. it is a balancing act that he provided. it is paid for and it is a benefit, unlike recent past history, where we spend like crazy on millionaires and billionaires and war and the pharmaceutical plan without any paid for. the cost of borrowing should have at least provided a reasonable assumption that there would be some sort of lucrative dividend. greta, it did not happen. we lost 2.2 million jobs, and so what was that spending about? what was that ball rolling about for smart host: the bush tax cuts also included lower rates for middle-class americans. are you in favor of making those permanent? or extending those? guest: we have to review the investments that we require an from their bring a balance into the picture.

some of the taxes for this strata of americans are unaffordable. he got us into trouble that we have today. let's be real about our budget. that is what i hear it home. let's be real about the budget and get real about what most troubles this economy. host: 2 cannot afford them permanently but there should be some sort of short-term extension? guest: right, we need to review where our investments threat. when other nations are investing, we need to invest in private sector dollars. we were number one, american number one, we are now down to no. 2 by china. we're ranking third by germany. the evidence is there. if we pay attention to that data, then i think we would be

more resolved in our efforts to respond favorably to some of the things we need to do. host: less than 10 minutes with you. more phone calls. jacksonville, florida, an independent. caller: i may have a solution for some of our problems. i am 62 years old. my whole life i had generations of the same family eating off my same play. when they get their monthly check, what we deduct 10% of what they are paying for? before obama was elected, he said everyone would have scant in the game. i know this will cut into your voting days, but let's have everybody involved. guest: some of the programs are brought about to assist the unemployed. those unable to land work, and it charge them by taking a

benefit away from what was calculated to be their absolute need to list from week to week and month to month. it does not make sense. but what i hear in the cause question is getting people into work. that is the ball now. trading and retraining dollars, education dollars, job growth, incentives that are provided, we want to make sure that everyone is being held. talk fairness here in progress. host: matt smith on twitter has this fear. tim, democrat and virginia, you're next. caller: our biggest problem is structural. we are borrowing 40 cents on every dollar right now.

and the fault of that now is the growth of social security and medicare. when the actuary's put the program back together in the 1930's and 1940's, people were not living much past 9 -- 68 or 69. i have 50 years and i've already passed my social security retirement age from 65 to 67. it will be closer to 70 probably. if everyone was pushed off very slowly, it would make the structural changes slowly over time so it did not disrupt anyone's life. the biggest problem is the payroll tax cut, it is funding social security, and when you take that finding a way, it has to come from the general fund. guest: to repeat myself, the

president offered congress a paid for with the payroll tax extension. that pay for is there. i think also there are ways to be very progressive about strengthening the future of social security and medicare. we were successful with some of the affordable care act measures. and those who want to revisit some of the reforms that could provide balance for these very important programs today and for years to come. we can do that without reducing efforts or benefits for those who qualify. there are ways to strengthen it as we go forward, we have been working on that sort of package, and a sustainable notion of medicare and social security, we need to grow additional security into this

efforts. host: a republican in georgia. caller: i agree with a caller from virginia. a lot like to say that you are wasting money -- i had a mortgage. i had it almost paid off. then the government, i mean, the bank called me and said, we can lower your interest rate. and we will not even inspector house. and so i said great, they came over, i signed the papers, i got my mortgage rates lower, and then fannie mae to cover the loan. oh, fannie mae paid for. and so all of the tax money is being used to buy mortgages. the government should not even be -- why does the government want my mortgage? guest: the mix of public and

private dollars that go toward housing opportunities is important. the scrutiny that was lacking in your situation obviously needs to be responded to. they are needs for us to have sound government insertion if it is overview in what is going on. you won accountability and transparency. so of those improvements need to be made. but you need a good mix of public and private in these economic times. but the american dream of owning a home ought not to be taken away from us and a way to strengthen that is to have a good mix and grow the economy. host: kurt of texas, your last for the congressman. caller: one thing that is a pet peeve of mine is you represent the united states, not america. america is the entire north and

south america. please stop saying main that america. say made in the usa. we do not need things made in mexico. next, we need the first start by asking you how much percentage of your in come to you pay social security on? i'd bet is a tiny part. the cat needs to be removed and everyone pay their fair share. -- cap needs to be removed. guest: i would probably be the highest percentage in the house. you're probably accurate, and you've called for a form that is a progressive reform. i think there things that we can do in order to make a fair and balanced approach. host: before you go, financial times this morning.

the sequestration cuts, do you think they will go forward? guest: there was a package on that deficit reduction deal. i voted against that plan. but the concept is there, it was approved by both houses of congress, signed by the president. they created this and the failure of the super committee now require a sequestration in the future. hopefully fine tuning will ease this scenario. it might be possible but all in all, the general concept was that it was the third step in the process. host: paul tonko of new york, thank you for joining us here. the conversation continues. up next, senator johnny isakson , a republican of georgia. we will be right back.

>> word that standard and poor's is looking at the credit rating of 15 eurozone countries for possible downgrade. getting reaction from churn and chancellor angela merkel speaking to reporters what the rating agency does is the responsibility of the rating agency. but the leaders will plot a course to regain confidence when they meet later this week. as the eu leaders are working on the eurozone financial troubles, tim geithner is visiting the eurozone individually with officials there. he is speaking in washington, u.s. officials say that the secretary will bring encouragement rather than money in a time of severe budget constraints back home. the secretary will urge eu leaders to act decisively to control the crisis. turning to the war in afghanistan, officials said 40 people have been killed in a suicide bombing targeting shiite worshipers in kabul.

he blew himself had a shrine to commemorate the seventh century debt of the prophet mohammad's son. as some of the latest headlines. >> it is so convenient to listen to c-span what the three radio added. if it streaming audio of c-span radio as well as all three television networks. you can listen to all of our signature programs. c-span, it is available wherever you are. find out more at c-span.org. >> part of the point of the book is to change the way we think about change and to make as much more aware than i think we are instinctively of the potential suddenness of the disintegration or collapse. to make us realize that what happens in the soviet union and financial systems in 2007, what is currently happening to the

european union, is the kind of thing that can happen to any complex system. it can suddenly malfunctioned. >> this weekend, niall ferguson on the hunt -- on how all western civilization came to dominate the world and how we can decline. also, craig shirley looks at the attack on pearl harbor and the subsequent reaction by the american government and public. also, journalists on why partisan politics are hurting the country. her new book is "patriot acts -- what americans must do to save the republic." watch book tv every weekend on c-span2. >> "washington journal" continues. host: we are back with senator johnny isakson of georgia

joining us from the rotunda on capitol hill. let me begin with the latest compromise put forward yesterday. they are calling it a compromise -- by senate democrats. senator casey of pennsylvania said that this latest proposal on extending the payroll tax holiday would be paid for by these on freddie mac and fannie mae and a surtax on millionaires. what do you think? guest: it also takes away the lowering of the payroll tax on employers. that is another compromise. fannie and freddie need the money to pay the money back and putting a surtax on small business owners, many of those are incorporated, so it still has some of the fundamental problems with the previous bill but it is an improvement. i congratulate senator casey on

the improvement. host: could you possibly vote yes on this? guest: i will be studying it. it was released early this morning and added do not do so well and the morning. host: are you willing to let the payroll tax holiday expire? guest: it was a temporary benefit to bring the economy back, just like that $300 per person payment that george bush passed in 2007, an attempt to bring the economy back. neither one of those works. i think it is obvious the payroll tax holiday has not worked to change the economy. our economic figures are about the same. when you get into extending things, they go from being extended to being permanent. the social security trust fund

is going broke and 2034. when you lower the payments into the trust fund, you are lowering the time it goes broke. we have to be very careful as policy makers and as lawmakers. host: yesterday president obama pushed for a extension of the payroll tax holiday. here is what he said about republicans like yourself who ever accused of vote for it so far. >> i know many republicans have sworn an oath never to raise taxes as long as they live. how could be that the only time there is a catch is when it comes to raising taxes on middle-class families? how can you fight tooth and nail to protect high in tax rates for the wealthiest americans and yet barely let the figure -- the finger tip prevent taxes going up for 160 million americans who really need the help?

guest: this is the grover norquist game that both sides are playing very heavily now. he is on the node tax increase pledge. this was a temporary reduction of the payroll tax, not a permanent reduction. i do not consider it a tax increase of all, just like i do not consider reforming the tax code and doing well with loopholes to be an increase. i think we have gotten ourselves to lock in. i would be the first to set a one of the problems that we politicians have, we make pages and -- pledges and promises and now we are in different times. we are on a process that we could fall off of. we have to wipe the slate clean and to what is right for the american people. we need to get our spending down and reform our entitlement program. we have to belly up to the bar and do what is right for the

american people. our country is too great to be allowed to dissipate. host: you signed the grover norquist pledge to not raise taxes. you do not see this as a violation of the pledge? guest: no, no more than i considered it a tax increase when i voted to repeal the ethanol tax credit, which grover norquist considered an increase. we need to of all the constitution of the united states of america, that a supreme for me. host: he was quoted that he does not see this extension as necessarily a tax increase. guest: everyone must be looking more thoughtful in terms of the interpretation of what that is or is not. host: the national review wrote in an editorial that they think that paxton -- the payroll tax holiday should be extended.

they say this about your arguments. guest: was that of that argument? i did not hear the last part. host: the cost of social security is not a valid argument against the payroll tax holiday. guest: i respect everyone's judgment. the trust fund is followed iou's. -- is full of the iou's. host: the third objection is

that it is been ineffective at creating jobs. guest: that is a little bit of an unfair comparison. i respect where they're coming from, but the payroll tax is passed in 2001 and 2002 in the bush administration was a comprehensive reform. in its infancy and during its teenage years and adolescence, worked fine, and then we got into recession. it was driven by external forces. that is why i said in the beginning with regard to grover norquist, when you make a pledge or a change in one economic environment where it looks good, and then the economic environment changes, and it does not look good, we are not in a static world. we're in a world where things change and we have to respond to it. host: randa is our first phone

call for you, a democrat from new jersey. caller: i would like to ask you, senator, why do republicans hate poor people and the middle class? in no, i truly feel that their persistence to overthrow president obama has led you guys to believe that society does not matter. i know a lot of republicans and they are all feeling this. --feels like you're putting your thoughts are whatever you are trying to do before the betterment of this country. it is awful. it is absolutely awful. people are struggling. host: we have got your point.

senator. guest: i do not hate anyone and i do not know any body that hates. i have the greatest respect for the american people. i was in business, my father was a greyhound bus driver, i certainly understand it is the strength of the united states of america. and we're all in this together. corporate america has to do its fair share and people with higher incomes need to do their fair share. we have a progressive income tax right now and we have programs like earned income tax credit where you pay people who are in the low-income earning area is subsidy where they pay no tax and get an end earned income tax credit. it reflects a positive outcome on the middle-class. i do not think it is a matter of hate. it is what is best for the united states of america. we need businesses and business

owners to produce the jobs for the middle class. and we need the middle class and we need the right to represent itself. it is that fabrics that we have blended together and we are under difficult stress because of economic conditions. some are under our control and some not. we're not a country of eight. we ultimately come together in the worst of times. i think we're going to come together. host: on the politics of this, this headline. obama sees an advantage on the tax cut. do you see that the politics of this are in the favor of the democrats and the president? guest: let me answer that another way. when i voted against the democratic and republican proposals, i thought that politics was driving the decision and not the best

interest of the american people. if the president and our leadership play that game, then i will not support either one. it is time we do what is right for the american people. host: what you make of mitch mcconnell tester day saying there is a lot of sentiment in our conference. clearly a majority sentiment for continuing the payroll tax relief in these tough times. guest: i think he is correct. i do not know if it is clearly a majority but everyone wants to do the right thing economically for the country and for the middle class, for small businesses, and i think mitch is right in terms of that representation of our caucus. host: will there be a compromise on extending the payroll tax holiday? guest: i will make a guess and say that there probably will but i have not had a chance to talk to my colleagues since the offer came out last night from senator reid and senator casey.

i can only tell you that it would be my guess that we are getting closer to an agreement could be passed by both sides. i do not know that to be the case. host: you might be a yes vote on that? guest: as i said, i have not had my second cup of coffee. a look and all the ramifications. but it is probably the case that we're moving closer to a settlement. host: shirley, a republican in new hampshire, you are next. caller: i am saying to myself that if i had a budget problem in my home, which i do not have very much money, i would cut back at least a little on everything that i had to buy. why is it that we cannot just take one% of everything that we have committed to cut social security, money going to africa, china, every place by 1

%. what would it do to our indebtedness? guest: you are a very insightful a degree there has been a proposal out for the last 18 months call the 1% solution. every year, for seven years, it gets you to attend% reduction in spending over 10 years and movement toward a balanced budget. that is another form of sequestration like what was done in the -- in last august. i think the caller had an excellent suggestion and i want to complement her on one other thing. i use a line in all of my speeches that is really true. my family, my children, everyone i know has had to sit down at their kitchen tables and real prioritize their spending because of the economy and what

has happened. it is about time that the government of the united states did what every american citizen has been forced to do. we need the inspiration and desperation and find the money and reduce the spending and reform our tax code and get our itself back in fiscal health. host: ron in indiana. caller: i have three questions. first, the pledge to grover norquist. to use where to grover norquist or the american people? guest: i swore my allegiance to the american people when i was sworn into the u.s. senate. caller: so how does that come into play? guest: that is why we have an oath of office for the senate. it forces you to be respected in

the time that your government, not retrospective to sometime in the past. it is important to keep taxes low. i think it is also important to save the republic. if we are at a situation where we need to reform the tax code, so be it. caller: you mentioned that you had to sit down with your family and reassess your budget. how much money did you receive from corporate lobbyists this year? guest: i did not receive any money from corporate lobbyist for my family. host: here is a tweet. guest: i was a part of those negotiations. we had a balanced divided congress between republicans and democrats, and the president proposed a permanent change to our tax code. i would enter into this debate

as the last german comedy, we do not do anything permanently in the congress of the united states of america except those things that we swear our allegiance to. times change, circumstances are different. what happened in those negotiations in 2003 is some of those people who thought we went too far, said that we needed a benchmark to see if this was right for the american people. so they put in a sunset. president obama made a recommendation to extend them for two years and have a payroll tax holiday for one year. i'm glad that he decouple those so that we can have that debate. but it is appropriate to have our readjustment of taxes and these expenditures. we should not lock them in forever. host: tallahassee, florida. caller: i was wondering why my property tax is the highest in

the area. what if we stopped paying property taxes? what with the taxing, the if that churches would be paying property taxes? they pay in, and schools, if they have incomes there, and they did not have to pay taxes. host: property taxes is more of a state issue but if you want to comment. guest: they are livid by states and in that this -- in municipalities and counties. as far as churches, you have a number of organizations that are tax-exempt. they also have to meet a litmus test of not being politically

active. that has been historic in our country for a long time. host: a republican in tennessee. caller: they keep calling it the bush tax cuts. it was a democratic house and democratic senate and barack obama that extended these. the department of education were kids are dumber than they ever been, we can that epa, we can cut the agricultural department handing out $50,000 checks like candy at the back door. it makes people angry out here when we are doing without and cutting back and we see you playing games with our money up there like it is just nothing. the more that you get in, the more that you will spend. people to understand they are getting this payroll tax cut. it is hard enough to live on social security and they are cutting what they will give when they retire.

guest: the lady is exactly right. cutting spending is first and foremost what we need to do. we need to have all level playing field in terms of regulation. if you have a combination of fair and equitable cuts in spending and tough cuts in some cases, if you have some type of regular environment in terms of regulation, if you look at reforms of the entitlements in terms of future costs, you can begin to raise the prosperity of america not just because you raise the tax rates but the opportunity to make money in the private sector and businesses and corporate america. we need your raise the expectations of american business and free enterprise and small-business people. therefore raising the revenues -- are rising tide lifts all boats. that is what we need to do in washington. host: here is the tweet.

guest: once again the payroll tax is a tax that goes into a trust fund to pay a benefit. it is not a tax upon the general revenues of the united states of america. it is just like your retirement. if you have a retirement plan in your company or you bought an annuity, and you pay money into that, and you receive money in the future. it is a different ballgame than general tax revenues to fund these expenditures. caller: yesterday's mr. kyle was on the floor talking about the amount that the rich and wealthy pay. at no time did he mention their effective tax rates. their effective tax rate at bay -- after their deductions, according to the irs, in 2006 the 400 richest taxpayers on average $345 million each and

paid an effective rate of 16.6%. in 2008, that percentage was 18%. the real point is not that gross amount that they paid in but the point is the effective tax rate. most of the rich people in this country, the top one-tenth of 1% earn 50% of their earnings from capital gains and dividends. i have a problem -- what we should start doing is paying for earned income on capitol gains and dividends, especially for these top taxpayers. all of their money is paid in that way. and they are and if that half -- they are in effect half of that flat rate. guest: on income tax rates, i want to go back to what i said

earlier. if president obama and the republicans had not abandoned the simpson-bowles report last december, it would never raise the effective tax rate on the upper end to 24% and corporate america included by reducing the number of attacks treatments for productions -- of tax expenditures. all of those types of things which lower the effective rate. if you had a rate where you had a simple rate, you would raise their rates and american business would be for it. fred smith of fedex said give me a straight tax with no gimmicks and i will pay and a heartbeat. in terms of capital gains and dividends, think twice about one thing. dividends are the second bite of the apple, it is taxed twice and

then a third time on the estate tax. the capital gains tax says that you will invest your money in a business you hope will make the return and employed people and will be successful, and if it does, you pay a tax rate commensurate to that. and if it does not, you lose all of your money. it is a risk that you take. you have to be very careful without understanding why they are where they are. dividends are taxed twice said les, and capital gains is a risk investment. host: ruth in mobile, alabama. caller: i do not have a question but i want to say that grover norquist, the issue has accomplished its needs. it has made everyone more aware

of the need to stand with -- to spend less, and the main way to spend less is to limit how much money comes in. guest: anybody who proposes something that helps us to come -- caller: to treat cancer on our economy and it has been that way for decades now his crony capitalism. capitalism works just fine but it needs complication in regulation or against each its own. that is what we have seen here. we have seen 147 multinational corporations that own the world. it is an insane tax code that we have, a regressive tax cut at this point, and also -- the

outcome is that the disparity of wealth and our nation -- in our nation puts us on a level of rwanda. this trickle-down economics is not working. host: let's get a response from the senator. guest: i do not want to demonize any one. i appreciate those making investments with their money, selling their products to us, and making our lives better. there are a lot of corporations that do so much for our country. yes, there are bad actors, and there are good examples of people who have gone the wrong way. each of them want to pay the consequences. but i do not categorically demonize corporate america any more than i would any part of our society. that is not the way to play the

game. you ought to reward those who are doing right and hold those who are doing wrong accountable. host: pennsylvania. caller: following up on the last comment, and good morning. you said that you believe that those people that do certain things should be held accountable, like with the financing. i am a working class guy and the payroll tax got me an extra coffee and danish. not a $16 muffin at the white house. but should we focus our energy on the banks, getting the attorney general to send them some roommates? guest: no question that a lot of things have gone wrong and get to the root of the problem. they made the decision to do what they did to bring those companies tempered the financial

meltdown we have was a terrible situation. it was an accumulation of a number of bad decisions for people that should be held accountable. both in the government and the private sector. host: the financial times has this had line. -- this headline. because they did not get to a deal, the automatic cuts will go forward. the support that? should that happen? guest: the automatic sequestration? if we do not make the cuts in the congress, they will have to happen. there have to be consequences too bad action and good action. i'm one of the five republicans who voted for the simpson-bowles commission to be created. we need to put those on the table. it is the only comprehensive proposal that has been made. the group of six made a good

one. we need to put those on the table rather than reject a responsibility. if we do not, thenhost: donna, go ahead. caller: your co-sponsored dealing with excess interest on fha mortgages. do you remember that? guest: i do. yes, sir. the senator seems to a drop in the interest in this, even though there is an article in " the washington post" about this. i have a feeling the lobbyists have got hold of him on this. they are paying off the mortgages. if there were real money in people's pockets, who in your office can i talk to to get this revitalized and maybe attached

to one of the bill's going through? your talking to the right guy. i know of no lobbyists against the proposal. host: next phone call. lyell an independent in minnesota. caller: good morning. i would respectfully disagree with the statement the senator made when he said the capital gains tax is from investments. back in the 1980's and 1990's, high-paid executive started receiving bonuses in the form of stock options. they would get $4 million per year in salary, but they would probably take $80 million in capital gains and those bonuses that they were cashing in in the

form of stock options. of brown -- bonus is something in addition to your income, and they should have been taxed and should be taxed at the total tax rate of that income. why has this not been talked about, and why hasn't something been done about this? this is why the super high earners are being paid 16 percent signed affected tax rates. guest: first of all, i have a little cough and cannot get rid of it. i apologize. secondly, the gentleman is absolutely right. it was carried to the full conclusion. they were given stock options that they have to exercise by buying the stock. if the stock goes down, they allude -- lose the money to pay taxes on. there are consequences to that as well, but the general and makes a good point. take a democratic calller in chicago. -- host: democratic calller in

chicago. caller: good morning. i wanted the center to address the loophole that corporations are using by shipping jobs overseas, is keeping some of the taxes that they have to address estate side. could you please answer that? . guest: i do not know what loophole attracts people to move jobs overseas. i know there are jobs that have gone overseas because of the effective regulation, but i do not know of any tax loophole, except for the fact that profits made offshore are not taxed until they are brought into the country. right now we have a punitive tax rate at 35% on repatriated money.

if both john kennedy and george w. bush or right, and they were when they had a tax benefit to bring them in, we would have a lot more capital coming into our country. the gentleman makes a good point on that end. host: we will go to another phone call and let you get a good cop in. go ahead. i heard what you made in terms of the bush tax cuts. your statement was absolutely incorrect. the bush tax cut started in 2001, and it was for 3.5 trillion dollars. and there was no money given as for how they would pay for the tax cuts, on top of that you have the majority in the senate and house that was bending their way through the surplus we had gained during the clinton years.

i am floored by your statement that you believe it was an external forces of some sort that mysteriously -- mysteriously cause the spending to somehow make the surplus disappear. think that was a statement rather than question. host: if i could ask you a question about 2012 politics, this is a piece this morning in "the wall street journal." the house divided on the former speaker, newt gingrich. some colleagues are split on the backing of his presidential campaign. it shows congressional

endorsements for republican candidates. mayor ronnie had the most, 49. -- mitt romney at the most, 49. guest: newt is a good friend of mine. i know mitt romney " you're dead the decision is ultimately the people who vote in the primaries come in my job is to make sure they are exposed to everyone. they're both great americans in both deserve the consideration of the people of georgia and people of the united states. host: does that mean you will not endorse at all in this competition? guest: there may be a time to make an endorsement, but right now it is time for me to be a catalyst for people to come to my state, and that is what i am trying to do. host: any concerns with the former speaker and how he led

the house? >guest: i believe you not -- do not say anything bad about a fellow republican. host: ray, republican and tennessee. your on with johnny isaacson of georgia. -- isakson. caller: [inaudible] it seems to me they should take the money out of their own pockets --[inaudible] what about the people they are supposed to be representing? i have been a republican for years. guest: the gentleman is right, it is a shared responsibility. i do not think i have tried to cast blame on either side one way or another, but i would caution the gentleman to do this. at 75 years of age he has a lot

of accumulated wisdom of lot of americans do not have. i hope he will go to the polls and vote, because that is what is most important. is anotherost: there proposal in the senate. one is from clear the casco of missouri -- claire mccaskill of missouri. it would provide additional money for highways, bridges, and other jobs-creating transportation projects. it would be offset with an excess of 1 million per year. could you support that? guest: that is something that is new to me, so i will not say anything but to say it makes a lot of sense. highways and infrastructures to create jobs, and that is ultimately what we're trying to do. guest caller: i am calling about the

social security tax. if you will go back to remember senator monaghan from new york wanted to cut the social security, what you pay to 3.5%, because he said the government was just spending it on other things, and no one is going to inform us about that. he was a senator from new york. thank you. take of the gentleman is exactly right. he called to the conscious of the congress to the fact that if you take money out of the social security trust fund and spend it on the general obligations input and i know you back in the trust fund, you are doing a disservice to the american people. -- and put an iou back in the trust fund, you're doing a

disservice to the american people. you are exactly right. that is why i have said it is a compound in deficit to the social security system and a threat to the benefit in the future. host: i want to get your thoughts on insider trading as the ranking member on the senate ethics committee, there is a hearing we're covering today. we covered the hearing last week on the senate side. is the ethics committee working on this, are you working on something when it comes to insider trading and letting your members know about the rules? guest: i want everyone to be perfectly clear, insider trading is against the law. there has been their representation made in this piece that went out that congress was exempt from the crime of insider trading, and that is not correct. every member of congress is required to report whenever

their assets are during the course of the year, and if it was ever done by a member of congress and proven in court, they could go to jail. it is important we make sure the rules of the senate -- and that is where my responsibility is, are clear on the consequences of insider trading, and also the parameters of which it is considered by the committee. no one should take any knowledge they gain in the congress of the united states, use it to their personal benefit without everyone in the country knowing that information, and that is what insider trading really is. host: there are two bills out there that would make it explicit that this is illegal. is there one you support? guest: there are pieces of all of them i support. as a member of the ethics committee we're not supposed to talk about deliberations that are taking place in committee until they are circulated on the internet, so i will not violate that, except to say the american people need to understand they

should be absolutely be protected against any member of congress using inside information and using it for their personal gain whatsoever. host: should there be a vote on this issue? guest: there probably will. it may be a ratification of a role of the ethics committee, it may be a statue. -- of a rule of the ethics committee, it may be a statute. the law applies to everyone in the country without exception. host: if the last phone call is jeff and port charlotte, florida. and caller: think you for taking my call. the answer, in my opinion, to the taxes and national debt is at jobs, and america is overlooking an opportunity to achieve energy independence and put millions of people back to work where they can pay taxes by

not using a new nuclear fuel that has been introduced to the market and spent 30 years proving it is safe and usable. thorium, thator y america has the third largest deposits of. you cannot make a bomb out of it. it is 90% safer than uranium. if the united states was to go into debate to see if the country wants it, if they do, you could put everyone back to work in six months. guest: i always learn a lot by engaging with my constituents, and i just learned a lot. i would really appreciate if you would contact my office, i would like to get all of the information possible. i am not aware of the benefit or the resources in the united states. it would be very helpful.

just ask for my energy expert or energy staffer come and get that information to them. i would be very appreciative. host: thank you for hanging with us the full 45 minutes. we know you're suffering from a cold, so we hope you feel better. thank you, sir. coming next, we will turn our attention to yesterday's announcement by the u.s. postal service of major cuts in that service. >> republican presidential bachmann,, the shomichelle said she still thinks she has a good chance of winning the iowa republican caucuses and that newt gingrich and mitt romney have significant loss. this comes at a time when polls continue to show her in the earlier -- what were tear up

candidates. -- the lower tier of candidates. in south carolina, a poll shows the former house speaker leading mitt romney i 17 percentage points. as they continue on the campaign trail, president obama travels to kansas where theodore roosevelt in 1910 delivered his new nationalism speech on giving regular americans a square deal. president obama plans to help predict about helping middle- class workers by extending the payroll tax cut. you could hear his remarks at 2:00 eastern time on c-span. those are some of your latest headlines. >> it is so convenient to listen to c-span anywhere, anytime with a freak c-span application. you can also listen to our interview programs, including q&a, newsmakers some of the

communicators. c-span is available wherever you are. find out more at c- span.org/radioapp. >> part of the point of the book is to change the way we think about change and make us much more aware did we are in stigma the plea over the disintegration or collapse, to make us realize that what happens with the soviet union, what happens to the financial system in 2007, what is currently happening to the european movement -- union is the kind of thing that can happen to any complex system. it can suddenly malfunction. >> this weekend, niall ferguson, on how western civilization came to dominate the world. but a sunday at 9:00 and saturday at 10:00. also, a look at the attack on pearl harbor -- pearl harbor. saturday at 1:00 and again at

9:00. also, catherine crier on why partisan politics are hurting the country. cts,new book is "patriot a what americans must do to save the republic." host: we are back with bernie becker, a reporter for "the hill" newspaper here to talk about the postal reforms. let's begin with what they said they're going to do. guest: essentially what they said is there going to continue a plan they came up with in september is essentially if you put a stamped envelope into a mailbox, there is a 40% chance it would get there the next day now. they will basically take that away. it will be 2-3 days. they want to close half of the

processing operations. what that will do is make the mail travel a lot further and take a lot of dirt to get there. with that in mind, that will be 28,000 jobs lost. it is all part of the postal service plan to downsize operations. this is the way they will do it. host: estimated annual savings is 2 billion? guest: they're trying to save 15 billion, which is a large cost of its annual operating cost. host: this reduction likely to eliminate the next day delivery of first-class letters, and beginning january 1, there is an increase of first-class mail to 45 cents. guest: yes. essentially they are losing billions and billions of dollars each year, and this is in large part due to an internet age, and they're trying to adopt.

a lot of the conversation now is, what is the best way forward? there is a lot of views about the best way forward. host: if you look at the budget numbers for fiscal year 2011, they had a total revenue of 67.7 billion. total expense of 71.4 billion. is that projected to get worse? guest: the net loss decrease this year, but that is in large part because they are required by law to pre fund health care for retirees come in congress push that came about. -- and congress pushed that up bback. host: you are touching on a debate we heard about recently that they have this revenue loss and wanted congress to act

to do something. why are we to the point now where the postal service made this announcement yesterday, and was it a surprise? guest: it was not a surprise. broadly speaking, they are in this weird place where they are in agency, but they're also run like a business. that puts them in a weird place where they want the flexibility to do things like ups, but they cannot. but there is broader talk about should we treat them as an agency or ups? that is where a lot of folks -- were the talk is. host: where is the inflexibility? guest: 80% of across our labor. they have a lot of retired- eligible folks, and they want to move them off into retirement.

this is where they're processing center stuff is going. they want to close a lot of the local offices and branches. they are trying to downsize employees everywhere they can. host: what happened next? guest: in the house and senate there have been bills that have passed the committee stage but have not reached the floor. they are very different bills, but both sides have said they want to work on this. hopefully folks would like to pass the bill by the end of the year, and then you can try to meld those, but there is a lot going on this year, so we will see if they can do that. host: if you live in the eastern central part of the country dial the number on your screen. another number for the mountains/pacific area. i want to show you yesterday

what the oregon democrat to say about this by the u.s. postal service. >> this guy, the so-called post mostar general -- postmaster general should be fired because his lack of initiative. 100,000 people laid off. that is just what we need in america today. let's lay off 100,000 people. great idea. then he is going to close local post offices. the white house continues to be totally silent, absent from this debate as they are so many. we will no longer have a united states postal service in this country. host: what did you hear from the congressman? guest: there are few things. when we have this idea of closing local branches coming use all immediately west virginia and montana, every state was worried about this.

when they go home, they hear about this. when they meet with folks they are saying i am worried about my local branch closing. from the liberals perspective -- you talk to government employees that are trying to have jobs that are no longer there, i think that would worry someone like him. host: do you think congress will not allow this to go through? to the rural representatives out number the urban ones? -- do the rural representatives out number the urban ones? guest: i think they can move forward with some of these branch closures, but they will hear about it the whole way. host: let me give you the phone numbers again. i inverted them. if you lived in easton --

eastern/central part of the country -- gloria and philadelphia. caller: my comment is the postmaster general, areas supervisors that it big bonuses every year in july, my problem is they do not have the money and they have to close the facilities, why are they still getting the high bonuses? for what? host: is that part of the debate? guest: good question. that has not been a large part of the talks. some lawmakers have said the postmaster general makes too much money, and argument against that he is running a competition against ups, and those places are playing -- paying their see is a lot more than he is getting. that it's the broader talks of should we she -- treat this as an agency or a regular ups-type

place? host: here is "the chicago tribune" -- phoenix, ariz., you are up next. caller: i do have a question for your guest. the naming of the post office that the u.s. house that so much time doing. who actually pays for that? is that something the government pays for? how much is spent and why? guest: that is a good question. i honestly do not know how much it costs. i know that lawmakers view that

is a non-controversial way to get things moving. my assumption is that is that it is a nominal cost, but a question that i wish i had more answers 4. >> how is the post office funded? guest: they do not get any taxpayer money. they are supposed to fund themselves solely through rates, what they sell. it is part of the way they are cause i agency. the employees are government employees, but they're supposed to fund themselves solely through what they sell and how they act as a business. host: we of seen what they sell go down over the past few years. here is "the baltimore sun" page this morning --

they will drop down from 104 down to 39 billion over 19 years. guest: i think what you saw in the drop in the past few years is we have an economy, and that played a role in it -- a bad economy, and that play our role in it, but there are so many ways you can talk electronically, and it is a different world, and that is part of why we're having this talk. it is a different world. lawmakers are trying to figure out how we survive in a very electronic world. host: is there a doubling to figure this out? g-- deadline to figure this out/ guest: they say they will run out of money by next year. this is not something where they will drop a hard line.

i do not think anyone wants that to be part of the legacy going forward. you would imagine there would be more working together and there has been on other issues. host: gordon has this tweet -- yes, i think that is referring to the $5.5 billion that the u.s. has to pay for retiree health care. their point is that no other agency has to do that. it came right as the recession was hitting h and totally busted their model. host: dennis says this has been a mandate that a pre-pay the retirement fund for 75 years in advance. is that true? guest: 75 years in advance.

they have to pay it over a 10 year span. that was part of a 2006 law. i guess i came right as the recession hit, and this has been a troublesome part. host: becky is next in kentucky. caller: good morning. i have a couple of things to say. a lot of people are really going to be upset about that with the post office. i just wonder why they cannot figure out some way to compromise or something, because there are so many people that do not want to electronically pay their bills on line or whatever, and a lot of people do not want to cut it down to five days a week. talking about the post office,

we only have one in our area, and unless you get there when they opened, it is all the way back. you just get discouraged when you go there. i cannot understand -- host: are there in of employees working? have they cut down on the employees as well? caller: you might have three, sometimes four, but there is people working in the back. i have seen around the holidays or whatever, they might have to have someone come out to the line to see if it is a regular letter or something like that. first-class the lady will take it or whenever, depending on what it is. i will not do it electronically, and i have a computer, but a lot of people do not trust during it electronically. they are used to doing it that

way, and they do not want the changes in the post office. host: here is the proposed delivery standards. let's go to pat next in georgia. caller: good morning. this looks like another attempt to me to privatize the american service people have been enjoying for a long time. no matter how rural, i am or anybody is, if you have a mailbox, you are going to get

mail, and i wonder what will happen. guest: there have been some that say that is the way we should go. what is interesting is ups does not rigidly want u.s. ps to close. -- usps to close. they are the one agency that delivers anywhere in the world. it is not particularly in their interest to have them not be around or to have them be private and direct competitor that way. so i think that is something to remember in this argument, there is a lot in the private sector who does not want to see them move over that way. host: what about the business is lighes like netflix? guest: that gets into the argument of how you save money?

you can save money by grow into more or do it by less? that seems to weigh the way they are leaning right now. i think you will see folks like that not be happy with that sort of idea. host: john in georgia. caller: good morning. i am of postal service employee. [inaudible] when i went to the post office, they have it run late delivery of mail. they would have the supervisors and and postmasters into your office, and the government pays for them to put them in a hotel for a week or more. now the postmaster's get that

rate of pay. they have a lot to do with the position. [inaudible] supervisors are walking around and harassing people. i can step over to congress -- [inaudible] host: can i ask you, are you retired postal worker? caller: yes, ma'am. and host: would you mind telling us how much he made at the end of your work? are you still there? caller: at the end, i made about 46,000 per year after 24 years. host: what is your pension like? caller: right now about 1300 per month. host: what age were you able to retire? caller: 60.

1. host: what do you think about making cuts to the pension system and how it works? caller: as far as the way it worked, and do not know how it works if they make the cuts, but i do not know how will it affect my pension. i really do not know. i would think they need to start from the top. they're all trying to privatize the post office. host: any talk about how the post office retiree system works? >> i think better is part of an amenity. there are too many employees, the postmaster general things. that is why he is trying to roll it back. what people make after they

retire will be a part of this. i think this will not miss this as well. host: maverick says with delivery standards being change, we need to send important things via priority? let's go to rich. caller: i was wondering if you thought the 2006 pre-funding wall was a push to privatize and basically eliminate the postal service, and if so, could the postal service broadcasts that to the country and get that repealed? guest: i have to admit i was not covering this in 2006, but my sense is that every lawmaker does not have a vested interest in privatizing. this is been around for hundreds of years, and not something

everyone wants in the history books about them. it is always possible, but i would tend to doubt it. caller: first of all, i believe the constitution mandates the post office, and ben franklin was the first postmaster. when you do a transaction over the phone, and you ask them to do -- send a copy in writing, you already have consumer protection the at the ftc. they are also in conjunction with the post office to eliminate a lot of fraud, direct marketing fraud. consumers did not realize it, but when they use the united states post office over phone or

electronic transmission, they get some very valuable protections. i think that should be discussed further before we put too big of a hatch in the post office. guest: it is a fair point. the constitution says that there can be a post office. i do not think there is a mandate of the has to be one. it is a good point. i am not sure folks in a young girl generation understand that. i am not sure that will be the sort of thing that will really drive that it back up. and there is an easy to internet transactions that folks are willing to take a chance with or historically that has been what it has been that past few years. caller: i was thinking the post office should invest in electric vehicles, that would save some much money on fuel. i have no idea how much money they spend on fuel. i know it would be a big investment, but what did it

back?k -- wouldn't it pay guest: there is no doubt they have been enormously large fleets of vehicles in gas bills will be a very high. i am not sure if they have looked at that. as we move forward into the 21st century, there will have to be some changes on some level and that way, but i do not know if that is part of the top right now. host: why would reject what would have the chance of eliminating next-day service for class -- for first-class mail? what is the logistics? guest: when you close to hundred 50 processing places, the mail will have to travel further to a processing center and travel from their. what is interesting is yesterday officials were saying when they

talk to folks, their sense is that people are ready believe there is a very limited next day but the idea to get from one side of the state to the other, they did not believe that this the mail wills make it long distances next day, which it does right now. host: brian in queens, new york. caller: since 1971 the post office has turned out billions of dollars in surpluses. it has only been the past couple of years they have lost money. where did the billions of dollars in surpluses go? did they go out to help the other federal agencies in the red or to bonuses? and another thing, congress has the bill that has to co-

sponsors. him and congressman ross. meanwhile, he has a built over 220 code-sponsors. i guess it cannot come to the floor. that would help the post office because it would help them in terms of how they recalculate the return of funds -- retirement funds. right now the postal service has been overpaying for 30 or 40 years. host: two points. the revenue loss, what happened? guest: i would say the losses are billions and billions of dollars. i am not sure what happened in the 1980's, but right now it is pretty steep, and i am not sure even with the best -- best words if they would have been up to make up for that. host: this issue of legislation, who has what bill? guest: the issah bill as the head of the house oversight committee.

-- tehe issa bill. basically one republican voted against it and no democrats voted for it. it is going to the floor. it will likely pass because the house is gop. the bill mr. lynch has that he referred to has pretty large overlap with what is happening on the other side right now. what you might see is when they try to melt those, you will see one few verses another, and we will see how they're able to merge those. host: here is another tweet -- tony, good morning. what is your question or comment? caller: i know the post office is saying since the rise of the

internet they have lost first- class mail in revenue, because with the rise of the internet you of a lot more purchases being made. there is a lot more packages being shipped now than ever. the problem is the packages are being given to ups and fedex. my question is why are we allowing these private companies to compete in the united states with our federal institution and they have effectively driven the post office out of business? guest: it is a good question. private market system is how things go. i think this speaks to the fact that they are in this weird place. they are not the business, not quite an agency. they have to compete against private sector folks. these are the areas they see lawmakers really struggling with 50 years from now. there are some things that have to deal with that not a lot of other agencies do.

host: part of a broader plan to cut 20,000 in costs by 2015. what is coming next and when? guest: one of the things that is interesting is these changes they announced yesterday were probably not going into effect until april, which would show because i status. ups can probably get that in works a lot sooner. but they have asked for is they ask congress -- they approach the idea with lawmakers of letting them play around with union contracts. that did not go over well with unions. we will have to see how that works in congress, but they want to cut a lot of jobs, and there are a lot of previous union deals out there. that could be the debate. host: david in loss angeles. caller: good morning.

with all due respect to the reporter, he seems to be highly ignorance -- ignorant to the lobbying powers of fedex and ups and the private industries on our congress. it appears to me that if the postmaster general, as you said before, is in competition in salary with people from the private sector, but if he was terminated, he would shift right over into that industry. host: let's talk about the lobbying muscle of these companies. guest: there is no doubt that fortune 500 companies have a lot of lobbying juice. i respect the point. certainly ups wants usps to

survive, but i am sure they do not want them to overtake it. i am not trying to suggest these private places are being magnanimous in this. they want to compete and win, but they have a vested interest in keeping them afloat. host: because they pay them to go the extra mile that does not make business sense for them to do? and it is cheaper for them to do that? guest: yes. there are rural places in maine, alaska -- places that have post offices that otherwise would you want to ship one thing there or would you rather the usps to do it? caller: hello. good morning. i first just want to say i am of former postal employee of 16 years, and i know first-class

mail only consists of maybe 20% of the volume that goes through the post office, and the post office gives major price cuts to bolt mailerulk mailers. can that be changed? can the price cuts for bulk mailers be cut instead of always the first-class going up? host: before bernie answers the question, you used to work there -- why don't you any more? caller: i retired under disability. guest: it is another good question, and i think it makes business sense to give people who are going to mail a lot -- their accord to keep mailing.

what we called junk mail is pretty profitable. folks to send that seem to think it works. they will do what they will can -- what they can. host: leery in california. cal-- larry. caller: our facility in redding is said to be one of the closures. the postal service is holding these public input meetings. basically they do not have any answers. they cannot respond to any questions that the public is asking them. what they're not telling everyone is that in sacramento the mail is being delayed anywhere from two-five days already. there is a local plant they closed down in california that is only one hour away from sacramento, and that is being delayed three-five days.

on top of that they are looking out for more closures going into sacramento -- four more closures going into sacramento. it will affect senior citizens and veterans to receive their medication. to say it will take you three- five days to get these issues is incredibly stupid. guest: becketts to the heart of the issue. they have to decide what the best way forward is. as a business tried to act as a business, whether it makes sense to do that. they will be trucking things along way and then maybe trucking them back. whether it makes sense to have processing plants going not as fast as they could -- as we just saw, the argument is to cut waste there. the argument from people is wendy weeks -- why you expect

people to come back to you when you're going to do less and less? host: rate in clinton, ohio. clinton, iowa. i have a couple point i would like to clear up first. first, you talked about the mailers.foremas mass they farmed out that out to private business about the discount of 3 cents or whatever. it has changed many times. that could up in west -- left the post office. what they do the mass mailings for them, because they would have kept the 3 cents and still get the discount. that is just one thing. you said something about mr. issa's bill, and look to see who

the top to campaign contributors are. there are the people you're talking about, fedex and ups. host: clarification. guest: mike is the chairman of the house transportation panel. he is a senior member of house oversight. to be honest, i do not know his campaign cash looks like. i did not doubt it. i think it is a fair point. i think you have to consider when you look at ups who they are lobbying and what they are lobbying for. totally fair. host: talking about the announcement by the united states postal service about reform. our next guest says they could happen as early as april. here is what the postal service announced yesterday as we listen to joe in arkansas.

caller: this really has me upset. can you give me a little bit of time? the post office department was set up by our government, like the lady said, ben franklin was the first postmaster general. he was a member of the cabinet. it was set up so we could communicate with each other. we could send a letter next door for 3 cents. we could send a letter to cram all in california for 3 cents. now all the sudden our congress is the one that screwed it up. -- we could send a letter to grandma in california for 3 cents. what does the education department give back to the people? now we are going to screw with the post office. it really has me upset. host: here is max rosenblum with

this tweet -- christine in pennsylvania. caller: in 2007 the bush administration, congress wrote legislation that was passed that required the post office to fully fund a retirement for the next 75 years within the standard of the tenure. it has cost the post office 5 billion + dollars every year since the legislation was put into place, and it is at the post office. constitutionally we should have a public post office, and congress has got into our post office, and no one talks about the legislation during the bush

administration while all the privatization was started and is continuing. host: why have you been following this issue so closely? caller: we watch free-speech tv, which is not subsidized by fedex or ups or any of those things. free-speech tv on direct tv, 348, channel 348 actually has a news. it has honest tax on it. if you -- host: we got it. joyce in texas. caller: the two former speakers hit the nail on the head. the lady just speaking of the man ahead of her. there are only two avenues.

communication and transportation. it is either one of these -- if either one of these are monopolized, and that is what we have, then we will lose the constitutional right. the freedom of speech. the united states of america has not been awakened to the fact. if we did not fight for the postal service and our right to the postal service, we are going to be gone in in new york minute. this is my contribution. i am sorry to be so and emotional, but it is something that should evoke emotions from all of our united states citizens. host: let's talk to john in texas city, texas. caller: i retired from the post e two days ago.

i am 65 years old. i have seen the huge change in the postal service. they really should call it the postal department, because the service has been taken out of it for quite some time. host: what do you mean by that? caller: when they started with the letter sequencing, all of the male that those in the carrier could not touch the mail until he leaves for the street. where he gets to an address where someone has moved, he has all of that forwardable mail in his hands. it is set back to a processing plant, so that is already delayed by another two days. there is already built in 25% this sequencing -- miss

sequencing. they simply cannot read a lot of the addresses on the letter. i came from a town where they have a lot of addresses that were alphabetical. they would have and o as the street address. the machines cannot accurately read that. was the's male sequence. all of that -- also, when they started automation of the malil, it was on the premise that it was going to keep rolling. now the volume is just not there. it is actually about the same price to let the clerks manually sequence the mail that it is for

the machines by the time you ship around. we are so mismanaged that there is still implementing the flats, the magazines. there are still implementing the flats when it is cheaper and more productive to let the carriers and clerks go ahead and sort their own mail rather than ship it through a processing center. i cannot tell you how many hours that you have to wait in the morning if you are on the outer perimeter of the apo for the truck to get there. whether it makes a difference, going through the houston traffic in the morning makes a difference. host: we will leave it there. we heard from three and a row that are quite passionate about this. what do they watch for on capitol hill? hearings, is there something central to debate this? guest: that proves what

lawmakers have to deal with. this is an issue that goes beyond parties. this is something folks are very passionate about making sure it survives. what i would love for now is we have one month in this before next year. i think both sides would like to pass the bill out of the chamber before the end of the year. whether that could happen with all of the other stuff going on, i think that is up in the air. i think house republicans and the senate have chosen their way forward. it will hopefully past those, and you will see whether they pass those, and whether it will make the long-term changes that are needed. host: where is the administration on this? guest: they included ideas in there that is a plant back in september, but i would not say they have been