job creation going, stabilize our economy, the president laid out his keller's -- pillars both in the kansas speech and the framework in the state of the union. as you'll see in the details as well as the state of the union, we put a strong focus on manufacturing jobs. we believe manufacturing punches above its way economically. beyond employing 11 million people, it has significant effects on multiples of additional jobs the support and are part of manufacturing. because a 70% of all private sector research and development, 90% of all patents, 60% of all exports. we put in detail some of the things we talked about in the state of the union on incentives for bringing jobs

back, removing deductions for shipping jobs overseas. you can see in here today that there is a $6 billion tax incentives over three years to prevent the downward spiral that communities where when there is a massive plant closings, layoffs, or perhaps layoffs that could be related to the military drawdowns, that we are -- have a strategy for those communities to attract new employers, not after they've gone to the downward spiral, the before. this budget will include a $5 manufacturing tax credit, often called 48 see, it is more than doubled.

the demand is so high and this brings together the presidents pillars of both energy and manufacturing. the same is true with the extension of the 16 a three provisions -- 1603 provisions that seem to have been very effective. an expanded and permanent r&d tax credit of 17% to give companies the confidence and security to make those investments. we will talk more about weeks to come. another element that brings together the president's energy and manufacturing pillars are our advanced vehicle strategy. you will see in your newthese are technology neutral. they're worth $10,000. we do not pick between natural gas or electric vehicles. we let the market determine that to buy these cars.

this will come together with the community challenge for infrastructure deployment, and heavy truck natural gas tax credits, the first credit of its kind. you have seen the we also, as part of our jobs manufacturing strategy, put forth an energy trade enforcement center, 50 dass 60 new people, greater coordination kick -- 50-60 new people, greater coordination in the government, and this is designed to bring additional trade cases that will level the playing field against countries around the world including china. the pillar of education and skills i am going to leave largely to cecilia, but make one point. overall, you see a very significant commitment to training at this time of very

high unemployment where we are still coming back from the worst of this recession, still gaining traction, still trying to make sure that more people are able to get the jobs. in this, you are a -- you will see a few principles in terms of community colleges -- >> we will leave this briefing our reliance on community colleges. this is where studies point to us. given the president talked about the values of responsability and shared sacrifice in his state of the union.

that is embodied in his budget as well. one of the items in the budget and have not been out is the fact of the president is calling for dividend income to beat tax at ordinary income for those making over $250,000. good i want to be clear on something. the dividend rate will remain atif you are in the 15% or the 10% bracket, at any income will continue to be at the president's budget. if you are out of 20% rate, it is 15% and will continue to be so. ordinary income was what the

rate was during the clinton administration. it was consistent with a strong and robust economy. the president had sought to keep a rate at 20%, as with capital believes at this time, while we are asking for shared sacrifice across the board in entitlements from house to agriculture to afford to devote $226 billion to -- $206 billion to lower tax rates for the highest income americans. our system for taxing income for the most well-off americans is clearly broken, and the best way to fix that is through hard

choices as part of comprehensive tax reform and not by spending $206 billion on a tax rate that is part of the reason why so many people people are paying lower rates than middle income people. i will turn it over to our partner in crime. >> thanks. just to round out the picture by the president talked about the urgent need to make sure our students and workers are getting the training they need, as our economy continues to expand and grow. the budget has two proposals. the first is his strong view that now a quality education should not be a luxury.

it is an economic imperative that should be available to every family. there is a vital need to make sure that we are providing opportunities for workers. to start with the education and peace, you have heard some of this before. the first part has to do with higher education. he talked about how a student loan debt is outpacing credit cards and everybody has our role to play in making sure colleges more affordable road the budget proposes to do what the federal government can to play its part by making a permanent tax credit and also by making sure a

student loan interest rates do not double as they are expected over this summer. this includes a proposal to make sure that does not happen this shoe live. -- this july. there is also a series of incentives the budget reflects to make sure colleges and states are doing their parts. there is a series of incentives to keep tuition is affordable, to move aid in the direction of colleges but are keeping tuition affordable and providing good value and investing in students, needy students in particular. there is a race to the top program focused on affordability. there is a program to help

states innovate, so it is a reflection of this notion that states have a role to play, colleges have our role to play, and the budget really reflects fiscal incentives to make sure we are making higher education affordable. the second big issue is continued investments in the race to the top program. the budget provides $850 million in driving reforms at the state level. it has been expanded to include an early learning challenge, so race to the top is being applied to make sure students enter kindergarten ready to learn. this year the program also includes sister fashionable program so we are not just driving reforms at the state

level. did you heard the president described in the state of the reforms aimed at elevating the teaching profession. there is a $400 million innovation fund reflected in this budget and a program to to work with teachers to really have a transformative change on the teaching profession, to create more career ladders, to focus on training programs for education. this is something the department of education is working on pure good -- is working on. the president challenged do -- travel to the community college to announce his proposal to provide more americans with the skills they need in this 21st for the jobs coming and who in demand now -- coming in demand now.

we know we are going to need to fill millions of positions in high-growth industries like health care, clean energy, information technology, and this fund is designed to create a partnership that would be implemented by the department of labor and the department of education. also to make sure they are building a partnership tothe idea is to help community colleges become community career center. there is a piece of the same death the colleges themselves. -- there is a piece that is aimed at the colleges themselves. state and local governments can apply for these funds.

there is a piece of this dedicated to entrepreneurship to help make sure we are providing training for folks in small businesses, and this administration has made great investment already in making sure community colleges have the resources and infrastructure available to meet the needs of this economy and students in is build on that record by making sure community colleges are linked with states to make sure they are providing the training for the jobs where even as some americans are looking for work, jobs are looking for going to make the difference with linking workers to jobs that are available, and i will try to go back to can. -- i will turn it over to ken. >> thank you.

>> [inaudible] >> i could go further. and he could add on. when the president came intothe fourth quarter 2008 gdp we thought was - 3% or so. we now realize it was close to -the president inherited a much worse situation.

on top of that, during the previous administration, we had medicare, bush tax cut, so i think the situation was far worse than we had anticipated, started with. actually does cut the deficit in projection, and that is inherited, particularly on the economic front. the sequester is bad policy. just look of the defense side. it would require $500 billion. across-the-board cuts is a bad policy bureau did we believe this requester should be

replaced with a balance -- is bad policy. we believe the requester should be replaced with a balanced we should get rid of it as bad policy and achieved the 1.2 trillion dollars called for. the sequester is a very important function, so this budget is not calling for the sequestered to be taken away. they are calling for the money to be replaced by balancing the deficit reduction. >> in november when you look at first quarter and the third quarter, the average was projected to be 1.65%. it ended up being a 8.9% and 6.7%, so that period we were

averaging 7.8%, so have people down the deficit projections they would have been a bitthere is no question we face when you look of the ultimate goal, is superior to the 2011 budget. has come under 3%, and let me add. it is not just that we think is. the opinion is not ours. the entire rationale was to

designed to be mutually assured force people to come to the reduction. went to andrews air force base, as an action-forcing event to sort of compromise, so i think it is totally appropriate to look at the amount rockaway over -- locked away, over one trillion dollars, and there was an enforcement mechanism that would force us to come together

and agree on amounts that were equal to or more, and that is where our focus should be. >> the difference between your deficit projections in this dollars higher. >> the differences primarily the aotc permanent, so that explains the remainder. >> what about oco?

>> is capped at $450 billion. we use out for transportation. >> which is another policy change. forward a provision that were deficit savings. savings. submission. >> is this a situation where if

trillion dollars? in this budget, or would they just changed? >> obviously, i probably will not negotiate a compromise with you right now. negotiating against yourself. i think we all realize when you effort, if you have a common goal, which is to strengthen our economy. $600 billion in entitlement savings, and we have already agreed to the most significant

budget, 2.5% of gdp. i know that is a little boring. that is the lowest it has beenin other words, we have put savings. have not seen details in the equivalent to $2.50 in interest that puts forward the type of

less see if we ever see a budget house or even of remark about revenues are exclusively put on amount that would be a stepwe will see. >> [inaudible] fairness. the trucks on corporate tax reform, we are going to speak

president has made clear he supports corporate tax reform lower rates for people investing, creating jobs in the u.s., do so further for have the assurance nobody is escaping during their fair share as part 0 of our race to the bottom or having our tax code actually subsidize and funds to tax havens, but we will the end of the month, and in is looking for

shared sacrifice. has savings and medicaid. it has savings for new beneficiaries in 2017. it has agricultural, civilianhow can the president go to the town hall of look at average to do that at the same time they say the most fortunate americans do not have to contribute at all? i think when you looked at what it takes to get the public and general support for a balanced large.

budget? >> in the budget we have, we payers. president had previously was he had not led dividends go all the in this budget he decided that not lay out what the rates would made clear is it needs to

be reform that leads to a tax code you let the bush tax cuts expired. things like the dividend rate is system. you hundreds the a more fair tax occurred.

good and region where you could see a more tax code. we are saying when you do taxth. we have to patch it every year,, and we are essentially saying we should replace it ahoy -- to replace it, but the best off are being asked to pay less than the middle class. corporate jets and tax

expenditures, and those areyou get a net of 1.5 trillion dollars. >> [inaudible] but then not talk>> reform takes time, and the president wants to be very specific about how we are going every dollar of revenue, so we want to have tax reform, but the comes from.

>> to answer your question, we do believe in the individual tax reform we would like to see individual tax reform that would also contribute 1.5 trillion part of the overall plan, so if we were just saying we wanted 1.5 trillion dollars of revenues in reform, you might say, you we would get it under the simplicity, making sure we had a tax code that was as a prefer.

for, so i think it is a put out. >> i want to make it clear there or less. taxpayers. did that give you most of the way towards the revenue and you

for upper income taxpayers? expected. optimistic as the met? >> do this first now. do it under the proposal that it will -- under the assumption jean mentioned the congressional budget office has hired a bang bang for the buck.

assumption that the economy will strengthen. >> i do not want to confuse apples and oranges in light of what we are talking about. there are a number of things youthere should be a rule that people are paying an effective rate of 30%. if you were, halving the dividend rate to go higher would mean less people would get higher by having of the offer an alternative minimum tax.

and of getting such a low tax warren buffett and arranging for income and being at a 15% rate, but there is a little bit of ordinary income and the tax smaller percentage, and the idea of the buffer role was not the -- the buffett rule was not the main force of raising revenue. it was to be a minimum tax, and we have said from the beginning we never expected the most well- off people to hit back. many people pay over 30% rate. this is designed for people who

arrange for their money to be in a preferential rate so the combination allows tens of thousands of very well off ordinary or middle income families. >> time for one last question. >> [inaudible] 5 i do not think we take a pass. we have to go back and think billion in its first decade. according to cbo. and we have specific savings on

medicare and medicaid and other billion of mandatory other savings, including federal employee retirement, the pension benefit guaranty, so i think we entitlement side and also the balance package that has $2.50 for every dollar of revenue, and most importantly we have deficits every year. we have reached a point where the debt is stable as a percentage of gdp. >> can i point out that if you look at the ninth or 10th year of our budget and look of the

amount of savings we have on the health care side, is the same in 2021 as the savings in a bull- simpson plan. issue is i should point out entitlements right now, everything in terms of dramatic expansion of people, because of the aging of our population, all of that was known in 2000. and we knew in 2000 that between 2000 and 2020 there would be a large percentage of increase on people on medicaid. we were able to project now balance the budgets, even surpluses. a lot of what has changed is the fact that besides the cost much

of which we support, but all of which was not paid for, and the legacy of that is well over $500 billion per year, so that legacy and of being the difference between us struggling with deficits and having a very low deficit as a percentage of gdp. that just makes the case that you need to deal with revenues on those who are most fortunate and entitlements at the same time. we have never said it is one or the other. we have always said we need a grand compromise and revenue savings, particularly on those who are the most well off.

what you have now, what matters most, external debt that does not include financial assets, things like student loans. you have in around 67%. you have it coming down after around 2014 or 2015. anytime you are looking at a country's economic stability, of all. the president worked very hardhe is putting out entitlement changes that i have never seen in a president's budget before. agriculture subsidies, civilian retirement, even on the military side, medicaid, medicare. i think the president has very much stepped up to the plate

both in the negotiations over the summer and in this budget. all that is holding us back from progress has been, quite many on the republican side, particularly in the house of representatives, to do a balanced package with revenues. there are clearly some republicans who would like to not enough. we'll be happy to answer any more questions you have. please get in touch with us on e-mail and phone all day today and we will be happy to answer your questions. thanks. national captioning institute] cable satellite corp. 2012]

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> obama's budget plan for 2013 totals $3.80 trillion in spending, which is an increase from 2012. the budget request brings in about $2.90 trillion in tax revenue and creates $900 billion federal deficit for 2013. for more information, go to c- span.org. facebook. our latest facebook question for next year's federal budget? response. >> there has been spirited disagreements. but do not let anybody being misled by that. you have given here in this

clause in moving and dramatic show of how americans to honestly differing move forward for the nation's well-being, shoulder to shoulder. >> the campaign for president this year. we look back at 14 and you ran for the office and lost. go to our website to see video of the contenders who had a lasting impact on american politics. >> and what about you? are you now out of that? do you have a comfortable bankroll? are you paying less for the things that you buy or more? do you really think that things cannot be better? of course they can. working together, we can and will make them better. >> c-span.org/thecontenders. >> president's 2013 budget

request. briefing. >> we are here all the time, there we go. the budget submitted by the is more than just a document that has lines in expenditures in it. a budget represents a revision that that president has for the future of america. in this case, it will be 10 years.

mr. bernanke told us a few days ago in the budget committee that we need to be looking beyond the 10-year window, particularly problems' like our economy. are entitled to and must have an honest budget, budget that clearly lays out the challenges we face and how the chief executive would expect to meet those challenges. i cannot imagine governor bentley in alabama not taking out how he is going to meet the challenges we have, where -- or brown in california or governor cuomo in new york. this is the fourth year of this president's term in office, and his final opportunity to let out country ought to meet the challenges that we are facing financially.

that debt is the greatest threat to our national security. just this morning on the msnbc, the chairman of the council on foreign relations said reece could be the united states next year. erskine bowles, testifying last year before the budget debt crisis and it could happen as early as two years. we are in that second year now. this is not something that is just a normal dog and pony show around congress. it reflects the challenges that we would just a couple of things about, under the pronouncement that we are hearing from the white house, this budget reduces our deficit by $4 trillion. that is absolutely untrue. it does not reduce the deficit

at all, virtually. it is just a stunning thing. morning that it would reduce give me a break. it increases spending $1.5 trillion. it increases taxes $1.90 trillion. would increase my $11.2 trillion over 10 years. increase. whereas the budget control act that we passed last year, and the federal deficit.

dollars. it does not save a third of a trillion dollars, according to the best estimates we can come up with. it is under $300 billion that it would save over 10 years. it is deeply troubling thing to is a matter that should be discussed. we have now gone for years without anything occurring that would get us off the dangerous that course we are on, except that this president during his tenure in office has added $6.30 trillion to the gross debt of the united states. who is going to go? >> thanks very much. i believe the president has

abandoned his role as leader of this nation by not being honest with the american people about the significance of the national debt. somebody asked me if this budget was dead on arrival. i said it is not dead on arrival, it is debt on arrival. that is what we are seeing. this is an ambush budget. the president is ambushing the american people by promising to cut the deficit by $4 trillion, by $11 trillion. in the pretext of trying to help everyone, in fact, what his budget does is continue to bury the american people under mounds of debt. the promises will never occur and the spending he demands just cannot occur. were what we are seeing is a

deficit of over a trillion dollars. remember in 2009, the president that in fact he would cut the deficit in half by the last year of his first term in office. in fact, $1.30 trillion is the deficit that is included in this year's budget. we have gone 1000 days without a budget passing the senate. last year his budget came to the senate. harry reid would not bring in, the majority leader. mitch mcconnell roddick and it failed 0-97. the twin tidal waves of social the numbers get so big that it is sometimes hard to realize how much deficit this year alone $1.30 trillion is. the president pretends that if you just raise taxes on a small number of people, you could solve all these problems. this is how much this deficit is. if you took all of the money earned over a million dollars by everyone in the country, took

it took all of the gold in fort that together, that is less than the deficit in this year's budget alone. that is the severity of what we face. and this budget does not help solve the problem. >> i would just say one thing join with me. i would say if the republicans are given the opportunity next year to have a majority in congress, we would use the rule passed by 50 votes, not 60 voteswe will pass a budget. we will have a bicameral budget.

we will alter the debt course of america and put us on a path to growth and prosperity and not to debt and decline. that is a commitment and i am deeply disappointed we have seen such poor leadership of former senate leadership on the question of bringing up the budget. >> i was told alphabetically, soto follow on senator sessions the president intends to exert no effort to get this budget passed. i thought last week the most telling statement that anybody

made is when senator reid said a senate budget. they asked the white house spokesman what he thought about that and he said they have no opinion on that. how could the white house not have an opinion on whether you even have a real budgetyou have to have a budget discussion. you have to have a budgetat some point you have to have a budget fight if we are going to get the priorities of the country decided what they should be decided. when jay carney can stand there and repeatedly be asked, the white house and has no position on whether the senate has a budget or not, and he says no, we have no position on that. what kind of leadership is that? we are apparently going to have -- apparently the third year in a row where the absolute commitment of the senate majority is not to have a budget, even though the law requires that we have one every year. the simpson-bowles commission said this was the most predictable crisis in the history of mankind, and we are just continuing to go further and further down that path.

>> this is a very sad day when the president of the united states fails to keep his promises to the american people once again, and rather than makes things worse. we know the president said he would cut the deficit in half by the end of his first term, and we know that is not going to happen. we know that harry reid is the states senate, the only person who can put a bet to, we did put senate for a vote, and has refused to do so for well over 1000 days and has said he would vote. budgets are where you figure out where your priorities or, where you make the hard decisions and you figure out what you have to have and cannot live without, what you would

like but maybe can put off, and things you cannot afford. that kind of disciplinary process that every family, every small business undertakes in america. harry reid and the president's on political party have simply refuse to do it. i guess the worst part about the debt is not only looking at the television and seeing what is happening over increased now and -- happening in greece now and what is happening in europe, with their unsustainable debt review what is happening over in greece now. it is the impact on jobs, the fact of the matter is this $15 trillion plus debt has kept job creators on the sidelines, because they don't know what the taxes are going to be. they don't know what kind of new regulation is going to be promulgated. they don't have any predictability that allows them to plan for the future. so they do what a rational

person would do, they sit on the sidelines. meantime, unemployment is unacceptably high and apparently the president is going to do nothing about that, except to raise taxes on the very people we are depending on to make the completely unacceptable, and i think the american people understand that. >> i will be brief. all of us to come here are shocked by the lack of fiscal discipline that occurs here, butour state has been blessed for decades in having governors from have run our state well.

a budget like this, they would it is almost as if the administration has become flippant about this issue. there is absolutely no focus on the types of things that bowles- in place. lowering marginal rates, driving the economy upward, focusing on medicare, social security, and medicaid. we all know in the case of medicaid are going to be insolvent, yet there is the role leadership on this issue. it is incumbent on the president seeking another term to lay out vision for our country is, as it relates to fiscal issues that are reaching a crisis level. i also think it is incumbent on whoever the republican nominee is to do exactly the same thing. i think this is a huge deficit of leadership. i am highly disappointed, and we all do not realize that not

only is this fiscal issue the biggest issue that our country faces, the biggest enemy of our country is ourselves and our inability to deal with this. as senator cornyn engine, it is the one thing that people who invest are looking for as it relates to helping drive this economy upwards. they are tied together. there is no question that dealing with these issues and having a robust economy are tied together and it is un fortunate for the american people who are out there seeking employment that the president has abdicated leadership. >> i share all these concerns of my colleagues. everyone serious agrees that we are on an unsustainable fiscal path. the federal government spends is borrowed money. right now, and that is time. another $11 trillion in the next 10 years on top of the existing $16 trillion. everyone knows that is

unsustainable and if we do not change past, that will lead to a situation in crisis like we see in some european countries. the president with his budget is saying that is not a problem for at least 10 years. that is completely irresponsible. we need a real discussion and because is not sustainable for 10 years. it may not be sustainable for one or two years. certification, jeff mentionedi am going to be working with these folks and others to have that debate in the senate this year, including by proposing an amendment to multiple bills that legislation on which this amendment would be attached cannot become effective until we have a full budget debate and

a series of budget votes on the u.s. senate floor as intended. >> thanks for coming here. i want to basically confirmed what my colleagues have already stated, the president has failed to lead on the debt issue. as senator sessions said, according to admiral mullen, this is the greatest threat facing the nation. i look to the summary of this, and the fact that this president is not proposing any type of reforms to try and save social security and medicare, i have to ask, why is this president even seeking a second term? the definition of being president is leading, and he is not leading. the deficit risk we are not even addressing. we have a huge risk in terms of

interest rates increases which would dramatically increase our cost of interest. for every one%, at $1.50 trillion to our deficit. simply because of growth, president is going to increase taxes. it will harm economic growth. for every 1% that we reduce growth by, at 3.1% of deficit grow. we sent out a letter last week asking cbo to reassess the number of people who will lose health care coverage. it will add trillions of dollars on to the cost of obamacare and onto our debt and deficits. we need to seriously take a look at this issue and this president's budget does not do that. it is true failure of leadership.

>> at a time of trillion dollar deficits and record debt, at time when we are spending at the federal government more than we have spent since world war ii, the budget presented by the president is irresponsible. it does not address the acute fiscal crisis we face as country and we hope for something better. last year the president's budget was taken to the for the senate and it was indicated earlier, the vote was 97-0 against it. we hope this year there were be more responsible budget document. as a member of the house budget committee and director of the office of management and budget, i see a lot of budgets, and i must say at this point, it is extraordinary in terms of lack of seriousness and responsibility. it starts by proposing a new $350 budget stimulus bill.

the president then claims in the budget document $5.30 trillion in deficit reduction over the decade. in looking at that and breaking it down, 99.9% of the deficit reduction the president claims is the following. $1.90 trillion in tax increases, iraq and afghanistan war savings that have been widely acknowledged are republicans and democrats alike as being a gimmick, the already enacted discretionary cap in the budget control act. the budget actually takes credit for what congress has already enacted. finally, net interest savings from those policies, which is about $800 billion. that is 99.9% of the deficit reduction. that leaves a minuscule $4 million in what could be called savings in this budget. it is amazing, given the

situation we are in. the president hides $4 million in additional spending that is built into the baseline. and for telecom the claimed savings of only $4 billion vanishes as well. there are no savings in this budget. this is a political year, and all of us are up you are talking about this in terms of the fiscal environment. to me, this budget goes beyond the line. it goes beyond just being a political document and goes to being an irresponsible document. given what we are facing in terms of fiscal problems, given our kids and grandkids will be facing, and given the impact on the economy, there is one thing in this budget that i think is relatively honest, and that is the president's projection of

what the economy is going to do. maybe it is in part because of the budget. a budget document is both the spending cuts and revenue side and then an economic forecast. this budget, as i look at it, concedes the unemployment rate will be higher next year than this year, and higher in 2013 and next year. he projects a 8.9% unemployment in 2012, 8.6% in 2013. ultimately, that is the worst part of the budget. there is nothing in this budget to get our economy moving again. neither is taking on the fiscal issues in making sure you have more predictability and avoiding the kind of debt crisis we are seeing in europe, and no policy to address the obvious need to give this economy a shot in the arm. in looking at this document, it looks like more of the same from last year an entirely political document during a year in which we should be making progress on our deficit and

debt. >> as omb director, he knows what he is talking about. he mentioned about interest, interest this year was $230 billion. under the present numbers, interest will go to $840 billion, larger than defense, larger than social security and medicare today and it would be the fastest-growing item in the entire budget. >> if you could talk a little bit more about austerity versus spending and the white house argument that the greater priority now is not austerity, but you have to be able to keep what is already a fragile economy. is that argument hold water for

you? >> europe is deciding that have to get their house in order now. i would just say this. if you share the view that there ought to be changes in the out years, why were they not in the budget? if you say that the immediate challenge does not allow us to cut spending today, why don't you propose something that would cut spending in the future? if you recognize, as all of us do, that medicare, social security, medicaid or programs in dire danger and need to be fixed, why don't you do it today? what mr. bernanke said at the hearing was, you should definitely look for savings in the out years and you should not stop at 10, you should go beyond that. that would give encouragement

to the entire financial world that the united states is on a sound path. it is rather stunning that the president does not propose that. it would help to establish growth and our economy if we had a plan that would not lead to disaster. >> both the cbo and chairman bernanke said that allowing the bush tax cuts to expire would harm economic growth. this president's proposal, increase taxes and it will harm economic growth. even though the president says he wants to grow the economy, his policies are doing the exact opposite and making it worse. >> when you work budget director, the president -- president bush's budget would come up and democrats would point out there is no money for the empty or four were spending more new money for emergency spending.

they would sit as budgets were a bunch of gimmicks and it was dead on arrival. why should we believe this year that this is somehow worse than what we have been seeing for almost a decade? >> it is interesting. the president's budget was taken to the floor last year and you would have expected it would become partisan. you would have had a majority of the senate supporting. the vote was 970 -- 97-0. it looks an awful lot like last year's except i would say more responsible given the fact it does not address any of the long-term challenges. it does not do anything to offset social security. the only thing on medicare is a provision for means testing which occurs after the next term. to this point about austerity. it does not make any of the tough decisions. as i said earlier you would expect in a political year budgets relatively political documents.

it does not have any savings. when you go through the analysis of what is in their it does not have any impact on this long-term or short-term problem. we're talking about the deficit over $1 trillion. a deficit of 900 + trillion dollars. these are historic levels. >> are these comparable? >> these are gimmicks that i do not think have ever perceived to be appropriate to be useful. oco. to say -- you will see the transportation funding has been paid for include -- assuming we will get savings in iraq and afghanistan. the aircraft and republicans look at this as a budget

gimmick to be used in the context of the super committee for payroll tax and determined it was not appropriate. you have the president putting it out there. hundreds of billions of dollars. the troops are coming home from iraq and afghanistan. i think these are at a new level. you also have to look at what this budget does in terms of long-term debt. instead of reducing the debt, it increases it. not just by a few trillion. sometimes between $14.12 dollars trillion. the historic numbers of dead we have seen and are not fair to future generations are increase dramatically to the point that the debt will be over $25 trillion 10 years from now. >> we did acknowledge that the war was not an emergency. it was funded with borrowed money. most -- some complain but both

voted for that. it was open decision. with regard -- it was not be -- much smaller. it is growing and searching out there. with regard to the war, the gimmick is that when you cease borrowing money to pay for the war, the president assumes the money is still there. and you could spend it. you are borrowing money to fund a new spending program. we do not have a source of money to pay for the war that when the cost drops you have money. you do not. >> republicans offered an unpaid for peril tax. i wonder if he would elaborate. how does this square with the concerns that you are telling us today?

>> there have been no meetings in the last couple of days other than between the chairmen and senator baucus. they have been discussing things over the weekend. i have not gotten a report yet today. what i do here is any proposal they seem to be having some solutions on gets taken back to harry reid. he seems to be trying to pull the rug out of any successful completion of this effort. and seems to be a cheerleader for failure. i want to extend the payroll tax holiday and unemployment soared -- insurance and make sure seniors can continue to see their doctors. harry reid is a big roadblock in preventing that from happening. >> should that be paid for? >> we're looking for ways to pay for all parts of this and there are blocks for paying for every component of the things we

need to do. the democrats are not willing to pay for this. i want to make sure we're looking for things are paid for. republicans have come forward with proposals in terms of a pay freeze on federal workers and things that have already passed the house. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> more now about the president's 2013 budget request from two democrats. kent conrad is the chairman of the senate budget committee and chris van hollen is the ranking member of the house budget committee. they spoke to reporters about the white house pose a $3.80 trillion budget. this is about 35 minutes.

>> i personally believe this is moving the country in the right direction. i think we need to put in context the circumstances we have faced. first of all the president inherited a fiscal disaster. that was not of his making. that was of the previous administration policy-making and he has had to cope with it ever since. i am encouraged by the trajectory of the deficit under the president's proposal from 8.5% of gdp down to 2.8% of gdp at the end of the budget period. it is important to remember the context within which the president is operating. in 2008 and 2009, we experienced the worst recession since the great depression. economy contracted at a rate of almost 9% in the fourth quarter

of 2008. barack obama was not the president of the united states. we lost 800,000 private sector jobs in january of 2009. that was not the result of the policies of barack obama. unemployment was surging. the housing market crisis was rippling through the economy with home building and home sales plummeting. we faced a financial market crisis that threatened to set off a global economic collapse. i will never forget crisping called to the capital on a full day and told by the secretary of the treasury zero the previous administration and the chairman of the federal reserve if action was not taken immediately there would be a global financial collapse. barack obama was not the president. we have come a long way since then. the federal response has pulled

the coming back from the brink. i believe president obama deserves considerable credit for the part he played in that success. as i noted in the fourth quarter of 2008, the economy contracted at a rate of almost 9%. positive economic growth returned in the third quarter of 2009. we have had 10 consecutive quarters of positive growth. we see a similar picture with respect to private sector job growth. in january 2009 the economy lost more than 800,000 private sector jobs. private sector job growth returned in march 2010 and we have now had 23 consecutive months of growth. this is a result of a fiscal policy that got america back on track. it is the policy of president obama. he can be proud of it. he deserves a good deal of

credit for this recovery. we would like to see stronger growth and more job creation. although unemployment has come down is still too high. the slow pace of this recovery is not unexpected. -- the economists have found that following recessions, accompanied by a severe financial crisis, recoveries tend to be shallower and take much longer. looking forward we need to remember that we have two major problems facing our country. one shorter-term and one longer-term. short-term we're still recovering from the worst recession since the great depression. the economy is improving. we still have relatively weak demand for goods and services which is holding back economic growth. longer-term, we face the death threat. job one is to improve economic growth with steps to strengthen demand. simultaneously, we need to

enact a credible plan to bring down our debt. our republican colleagues have completely overlooked the first problem. of weak demand. and would actively make that problem worse by imposing fiscal austerity right now. they have focused on the longer-term threat. their policy proposals of imposing fiscal austerity now would only further weaken demand which would lower economic growth, kill job creation, and choke off recovery. the republican economic approach suggested the economic recovery is being held back by rising interest rates. and immediate austerity would address that problem. we do not have rising economic or interest rates. interest rates are at a record low. often our republican friends say we have to listen to the

markets. let's do that. let's listen to the markets. what are the market's telling us? we have record low interest rates. we have weak demand. that tells us we need to take steps to strengthen demand. to get back on track in terms of dealing with their debt. the problem we have right now want to emphasize is weak demand. another leading economist describe the problem in recent testimony before the senate budget committee. he stated the number one problem with small businesses -- that small businesses deal with is lack of demand. they do not say access to capital. they do not say the burden of regulation. they say their order books are slim.

let's pretension to what the markets are telling us. that is why companies are not hiring as fast as they could be even though they have record profit levels and $2 trillion sitting on their balance sheets. wilson need to address the second problem of rising debt. we should not wait to respond to that challenge either. but not by imposing fiscal austerity right now but by adopting a plan that phases i and fiscal discipline as the economy strengthens. that has been the testimony of virtually every economic expert before the senate budget committee. the head of the congressional budget office. the chairman of the federal reserve. custis -- distinguished economists warning us do not impose fiscal austerity right now as the republicans would or you will kill job creation. it will hurt economic growth. at the same time they say, we do have the longer-term problem

of lay-ups threat and that has to be addressed as well. we do need an economic two-step. we need short-term strengthening of demand by investments in infrastructure. that would help -- put people to work and improve our competitive position as a country. second and simultaneously, we should adopt a credible plan that puts us back on track, the long term fiscal condition of the country. we need to do that by tax reform, by reforming our entitlement programs and by attacking wasteful spending. in his testimony before the senate budget committee, ben bernanke addressed the need for this kind of two-step approach. he said this. even as fiscal policy makers address the urgent issue of fiscal sustainability, they should take care not to unnecessarily impede the

current economic recovery. fortunately, the two goals of achieving long-term fiscal sustainability and avoiding additional fiscal headwinds for current recovery are fully compatible. indeed, they are mutually reinforcing. i believe that is precisely the balance that the president has struck in this budget proposal. to address the short-term lack of demand, the president's budget includes a number of important proposals. these include extending the payroll tax cut, unemployment insurance benefits through 2012. providing $50 billion in of front infrastructure investment. in roads, bridges, rail, and airports. extending the 100% business depreciation deduction for new investments. providing $30 billion for school modernization. providing $30 billion to help states and localities retain and hire teachers in -- and

first responders. -- establishing project rebuild to restore distressed activities. adding jobs and increasing wages. now i want to address one other kinard that i hear repeatedly from our colleagues on the other side. they have said it has been more than 1000 days since the democratic senate passed a budget. that is flatly wrong. the budget control act that was passed in august of last year contained the essential elements of the budget from 201222013. it was passed by the senate. it was passed by the house. it was signed into law by the president of the united states. it is now the law of the land. in many respects, it is stronger than any budget resolution. a budget resolution never goes to the president for his

signature. let me repeat that. a budget resolution never goes to the president for his signature. it is not the law. the budget control act not only passed the house and the senate's, it was signed by the president. it is the law. in many ways, it is more extensive than a traditional budget. not only doesn't have the force of law, it is sitting discretionary caps for 10 years, sitting over $900 billion. typically, budget caps are put in place for only one year. it provided enforcement mechanisms including a two-year deeming resolution which improves the enforcement of budget points of order and it created a reconciliation-like super committee process to address entitlements and tax reforms.

unfortunately that super committee did not come to conclusion. it had the opportunity. at -- it back that process with a $1.20 trillion sequestered that is now the law of the land. fact is we have a budget for this year, we have a budget for next year and pass in the budget control act was an overwhelming bipartisan vote in the u.s. senate with a strong vote in the house of representatives and signed into law by the president of the united states. we all know this is the beginning. this budget proposal of the president. we know more has to be done. it will for choir a bipartisan effort. to do more than what the president has proposed, will require both sides to come together. we hope that can occur in this budget process. i think we understand this is an election year.

and so try to come together is difficult in that context. i retain hope. i retain the belief that working together in a good-faith basis that we did in the fiscal commission as we did in the group of six, we can reach agreement across the aisle. with that, i will turn over to my colleague, congressman van hollen koy very much appreciate is coming to be with me here today. >> thank you. thank all of you for joining us today. the president's budget is a budget that is good for the country. it is good for jobs. it is good in terms of nurturing a fragile economy. it is good in tar -- terms of making long-term investments in education, science, research, innovation in things that we will need for a strong foundation for the economy for years to come.

it is good because it takes a balanced approach to deficit reduction. this chart here tells an important story. let me pick up what the story is. as you can see, in january 2009, the very month the president put his hand on the bible and was sworn in, the economy was in total freefall. - 7% gdp, losing 840,000 jobs every month. so the bottom was falling out of the economy. what you see is as a result of the actions taken by the president and the congress in passing the recovery act and actions taken by other players in the economy, we began to stop the freefall, turn the corner, and the reality is that since march 2010, we have seen over

3.5 million private sector jobs created. the most recent good news being 257,000 private-sector jobs added last month. what is the president's -- what does the president's budget do? we have to be careful not to mess up a very fragile recovery. and that is why he calls for immediate additional investments in the economy. we have got to get the payroll tax cut passed. we have to extend unemployment insurance for millions of americans who are out of work through no fault of their own. we have to take another -- a number of immediate steps. a good part of that budget was with the president submitted to congress last of timber. when he came before a joint session in the house chamber. at that time he called for a payroll tax cut attention -- extension. he called for an extension of

unemployment insurance, but he also called for another out -- some -- of a number of other extensions. let's invest $30 million in schools. let's make sure state and local governments have enough resources to prevent layoffs of teachers and firefighters. this is a good news story. as many of you know if you were looking at the public sector, job performance over the last many months, we have seen layoffs in that sector. that is in large part because the recovery money was invested in the first two years is no longer there and it is because republicans in the house have refused to take action on the president's job bill. this budget says pass my jobs bill. pass the jobs bill that has been sitting in front of the house of representatives since last september. we're pleased that -- we're

hoping we will be able to move forward on that small piece of it and unemployment insurance. as many of you who have been listening in on the conference committee, republicans want to talk about extraneous issues when we talk about extending the payroll tax cut. they want to clamp down on clean air. regulations, mercury regulations. debate those on their own merits. that is one thing the president's budget does. the other important thing it does is put us on a balanced path toward long-term deficit reduction. senator conrad pointed out at the end of this 10 years, you will reduce the deficit to 2.8% of gdp under the president's plan. you will stabilize the dead as a percentage of gdp. it begins to take it on a downward project 3 -- trajectory.

he does it in a balanced way. he does it through a combination of cuts. we have made substantial cuts already. we already cut the $1 trillion of the discretionary budget through caps that have been set. that takes the discretionary budget down to the lowest percentage as a function of gp since the eisenhower administration. the president's budget also makes cuts in the mandatory spending categories. the president also says rightly that we need a balanced approach. we have got to ask the folks who have been taking in a bandage of these tax loopholes to share a greater responsibility for reducing the deficit. we should ask the folks at the top 2% to go back to the same tax rates that were paying during the clinton administration. when we saw very rapid job growth. the president takes a balanced approach.

republicans have been bashing the president budget. i am looking for to seen bears. if there's this year looks like there's last year, here is how they deal with the deficit. they got investments in education. -- gut investments in education, science, and research and the drivers of innovation and they get our investment in infrastructure. they gut all that and they shred the social safety net. the weapon out. they cut medicaid by one third, over $70 billion. these are funds that help vulnerable seniors in nursing homes and many others. they of course and the medicare

guarantee. alesci to seniors, you know what? we're projecting rising health- care costs. you're on your own. you have to eat them. yourselves. and so the question is not whether we reduce the deficit. the president's budget does that. takes the deficit down and begins to stabilize the dead as a percentage of gdp. it does that. it does not do it the way the republicans do it. the president asked for everyone to share in the responsibility for getting that job done. he insists on closing some of these special interest tax breaks. he insists on getting rid of some of the incentives to shift american jobs overseas. we want to ship products and services overseas. we do not want to ship jobs overseas. they do not want one penny to go to deficit reduction if it involves closing a corporate

loophole. not one penny. a lot of them signed a pledge. we will protect those loopholes if it comes to closing them for the purposes of deficit reduction. the president focuses on the immediate term in making sure we get the economy going and do not jeopardize this very positive but very fragile trajectory we're seeing when it comes to jobs. thank you for joining us and we're happy to answer questions. >> why we do not use reconciliation in a budget this year to try to help get some of these things through? that is the main reason why these budgets are useful. and could you comment on the house leadership's backup plans

they announced [inaudible] >> with respect to the house leadership and i have not seen the full statement. i saw some of their comments. first of all we should have with this -- what this committee work its will and focus on the priority. extending the payroll tax cut for 160 million americans. extending unemployment insurance. and making sure that seniors on medicare have doctors who will participate in the program. we should be able to get that done. and i would hope the house republican leadership instead of issuing threats would make sure the conference committee moves forward to get the job done for the american people. frankly, we saw what happened

last time the house republican leadership decided to go alone. their proposal crashed and burned and it put 160 million american taxpayers at risk. i hope they do not want to repeat the same kind of story we saw last december where the almost allowed time to totally run out on 160 million taxpayers. >> [inaudible] if that comes to the floor. >> i support a straight payroll tax cut. i believe there would be. we will have to see exactly what our republican colleagues are saying. we have been making the point that when it came to tax cuts for folks at the top, the house republicans went to great lengths to change their rules that say you do not have to pay for those. and yet they have been saying

when it comes to a short-term, a 10-month payroll tax cut, all of a sudden for middle income people, all the sudden, you have to pay for it. we have been making the argument we should move forward on this temporary payroll tax cut. our republican colleagues have proposed instead lots of offsets. for example, increasing medicare premiums, that was part of a package. i hope we can get it done. we're ready. >> is there worry that if you separated out the tax cuts from the lighter packages could jeopardize unemployment benefits? >> let me be clear. i have not seen what the republican proposal is. we should move forward on the three pieces together. if what they're saying is with respect to the payroll tax cut, there are no longer demanding it be offset with things like premium increases for seniors on medicare and that kind of

thing. that may be a positive development. it is still important the three pieces travel together. i have not seen their exact proposal. if they change their position with respect to offsetting the payroll tax cut the way they have proposed, that would be a positive development. i say that with the qualification i have not heard their proposal. >> he did not have a chance to get his question answered. you might want to use reconciliation. i have not ruled that out. >> just a point on that. we would welcome any opportunity, just to put it in context. we have seen this ever before to get a balanced approach.

if you are going to use reconciliation, you would hope then the republicans are prepared finally to take a balanced approach to deficit reduction. the president was talking to speaker john boehner, the speaker could not get his caucus to go along with the balanced approach because it required asking folks at the top to pay more in revenue. in the by the negotiations when it came time to close corporate tax loopholes, you saw the republican majority leader walk away from the table. this has been a continuing issue. reconciliation is important. it is a solution to the extent people are willing to solve these problems. that means dealing with it in a balanced way. >> you said there is a responsible way to address the second problem. you want to offer a budget that includes deeper cuts in the out years. how do those go together?

in long term? >> put forward -- we will have a chance to talk about that at a later point. i have obviously been part of two other efforts, fiscal commission and the group of six. it is interesting to look at what the president has proposed. he has borrowed heavily from what the fiscal commission proposed. fiscal commission proposed $400 billion of savings in the health care accounts over 10 years. the president's has had close to that, $364 billion. the fiscal commission proposed through ongoing tax reform, not through raising tax rates but by broadening the tax base to improve the efficiency of the economy but also to reduce the deficit. the president has a revenue,

total revenue number that is close to what the fiscal commission proposed. i am looking at the president's budget, you will see he gets to revenue level of 20.1% of gdp in the 10th year. that is a little short of the target we had in the fiscal commission. he is not raising quite as much revenue as we thought was important in the fiscal commission. nonetheless, he does move in that direction. there are many places here where the president has borrowed heavily from the work of the fiscal commission. i commend him for a period >> there's a lot of talk about shared sacrifice and all that. you are on the budget committee and education. agriculture is important. what can they look forward to on this budget? >> the president has called for net savings out of agriculture of $32 billion.

that is above where we were at the end of last year. the bipartisan agreement between the republicans and democrats and the agriculture committee, senate and house. we agreed there to $23 billion of net savings. the president is asking for somewhat more. i prefer the number that we came up with last year. it is in the ballpark. >> [inaudible] >> the savings will come from a reduction in direct payments. >> both of you guys -- the white house states that want to replace the sequester to $1.20 trillion. a lot of republicans on the house side have talked about that. this sequester was agreed upon as a backup mechanism in case the committee failed last year. to what extent does the fact that both sides are backing away from the sequester, does it give credence to the public's

concern that you guys are fiscally cowardly when it comes to the hard decisions? >> the president's budget would more than replace the savings of the sequester. the deficit savings are greater than you would get with the sequestered. number two, if you look at terms of shared sacrifice which this gentleman raised, the problem with the direction we're going is all the savings come out of discretionary spending. there is nothing on the revenue side. there is nothing on the entitlement side. under the sequestered. it is on discretionary savings that have already been cut and we're headed already as congressman dan hollen indicated, to the lowest discretionary spending as a share of our national income in

60 years. >> will agree to the process in the first place? >> the hope was the special committee would come up with a better idea. on both the revenue side and on reform and entitlements. unfortunately, they did not. we're left with the sequestered. the president is saying we should secure the savings, we should have greater savings. we should do it in a balanced way. that is an entirely rational response, i think. >> i agree with what the senator said. i just got a note saying that what the speaker proposed was moving only on the payroll tax cut peace. that would leave millions of americans who are out of work hanging. it would leave millions of seniors who need to see their doctors as part of the medicare

program potentially in the lurch. that is why these things were dealt as one package together the first time around and they should stay together on the next round. i am glad the republicans are finally wanting to move payroll tax cut without other extraneous provisions like blocking clean-air regulation. other than that, things need to travel together. the three of them. sayingwould -- you're you would vote against? >> it is important to keep these three things together. and as i read the statement, he is talking about something he may bring up later this week. i think the conference committee can work its will. i am hopeful we will be able to get to a solution.

they're having discussions over the weekend. >> what are the state of talks right now? some of the talks breaking down over the weekend were pinned to link the time. what can you tell us? >> i do not want to go into a lot of activity. the democrats had proposed a permanent document fix. we have proposed after part of that that you use some of the war savings. it is not clear whether our republican colleagues will go along with that. some of the senate republicans have been supportive of that idea. house republicans did not take kindly to it in the public meetings. we're looking for other alternatives. you can have anything from a one-year fixed to a permanent fix. >> a lot of people said this is not -- [inaudible] money that was not going to be spent anyway.

how do you respond? >> why don't you look at this year's budget and see what is happening? the were savings budget, that has been put aside for the war has been used for other things that may not be directly related to afghanistan. if you do not cap that, what you do is you create a slush fund that exists for years and years. i think part of our hope is to make sure that the defense department, just like every other federal agency, is budgeting on a regular annual basis. you do not have a separate fund that is created. that can dramatically increase the cost to the taxpayer. the reality has been used as a part as a supplemental fund for

things he may not -- that may not be related to the war. by capping it, you make sure that we are on a regular budget for the defense department. >> what other things should be said. the republicans in the house had in their budget the use of these funds in total as offsets. in total. now they come along and complain about capping them. it is a little disingenuous. beyond that, the fact is we're out of iraq. we are winding down the effort in afghanistan. that is going to create certain savings and we ought to make certain those savings go to an intended purpose, not become as congress bent man -- van hollen has indicated, a slush fund that can be used to spend money in other places never intended by the congress.

>> back to agriculture. is there anything in rural development and programs that will not be popular? >> we have to have savings from every part of the budget. our present north dakota. -- i represent north dakota. i worked very hard on the last two farm bills. we're working hard on a new one. we can accommodate $23 billion of savings and provide a safety net. when you go beyond that, it becomes real challenging. the president has asked us to go further. he has asked for spending reductions and savings in virtually every area of the budget. we understand that has to be done. >> thank you. [captioning performed by national captioning institute] [captions copyright national

cable satellite corp. 2012] >> we will continue our look at the president's budget requests next on c-span. pentagon officials talked about the defense department post a budget blueprint. then, a briefing on the state department's budget proposal which includes $4 billion for afghanistan and over two billion dollars for pakistan. we would get a closer look at president obama's budget amara. leon panetta and martin dempsey will testify about the pentagon's $673 billion budget

request for 2013. live coverage from the senate services committee starts at 9:30 a.m. eastern time here on c-span. then, at timothy geithner air will also be on capitol hill testifying. he will be at the senate finance committee. that it started at 10:00 a.m. eastern, live on c-span 3. >> there has been contention, spirited disagreements, and i believe, considerable argument. but do not let anybody be misled by that. you have given here in this hall a moving and dramatic proof of how americans who honestly defer close ranks and move forward for the nation's well- being, shoulder to shoulder. >> as candidates campaign, we

look back at 14 men who ran for the office and lost. contendersan.org/the to see video. >> are you out of that thing? you have a comfortable backlog in the bank? are you paying less for the things you buy? the things -- do you think things cannot be better? of course they can. working together, we can and will make them better. >> c-span.org/thecontenders. >> president obama request is almost six mid-70s $3 billion and includes $525 billion in discretionary spending. unless an agreement is reached between congress and the white house, $500 billion in cuts will be taken from the pentagon's

budget over the next 10 years. this briefing is about 50 minutes. >> good afternoon. it is my pleasure to welcome back to our briefing department the comptroller and airforce lieutenant-general spencer. he serves as the director of assessment on the joint staff. there will have a brief opening remarks as it will take your questions and i will be fielding the questions. we put this request together in the face of considerable change that congress passed an act last year significantly reducing our resources.

we are winding down troop levels in afghanistan. and yet we face a complex array of taluses. you put this into a budget -- next slide, please. we were guided by a commitment by the president to make sure our art forces are the best trained, best lead, best equipped fighting force in history. to do that if i could get the next slide, we followed guiding principles and i will ask general spencer if he would brief the is. >> this is the first installment in a series of budget submissions to shape the force the country needs in fiscal year 20/20. everything was on the table during this process. we continued the quest for more disciplined use of funding. reductions through the lens of

strategic guidance and kept faith with our troops and supported deployed war fighters. you have heard this before but i will say this again. regarded by the principles of our new defense strategy. >> i will use these categories to describe what we did. first, a few words on the budget numbers themselves, starting with our total defense budget, not just our base budget, but everything we spend on wartime spending. what you see is fighting back to 1950 -- funding back to 1950, in constant dollars, so we have factored out inflation. the cure, 2010, compared to 2016. using the budget placeholder, it could be in the mid-20's. only two general points. they're not that different from past wartime and drawdowns, and the total budget is coming down.

we will have resources for other priorities. most of the focus is on our base budget. that is what is primarily controlled by the budget control act. what you see at the top line is what we had anticipated as the base budget last year. we were going to request a special budget authority. it is down $43.5 billion, $50 billion to $55 billion beyond 2015. that is a number i will keep coming back to, the target we were shooting at to accommodate title one of the budget control act. the budget control act actually goes out 10 years. when we make these cuts we work asking congress, or we will ask them to appropriate to a private $524.2 billion for 2013, adjusted for inflation that is down 2.5%.

in the years beyond 2013, the budget rose slightly, and have to keep up with inflation or perhaps a bit more. one more word before i go on, and that is that this budget does not accommodate the sequestered in title 3 of the budget control act. we are following normal fiscal guidance, which did not anticipate the sequestered. with those in mind, how we get there? the four principles we outlined before -- i will go through each of them, starting with more disciplined use of our defense dollars. next slide. we made a number of proposals for more disciplined use, adding up to about $60 billion of the savings. five-year savings against last year's plan. these will add to the $259 billion i mentioned. we made a number of proposals reducing expenses for the sector of defense and defense agencies by terminating a lower priority programs.

we rephased military construction and i will talk about structure cuts that in some cases left us on sure about where we needed to make investments. our buying practices, in number of things in our area. more use of should costs as well as the will costs. better management of service contracts, a major area where we can do better. finally, we will try to improve financial information and readiness. the same situation we were in last year when i stood at this podium and tell you we had $150 billion in efficiencies. over that last year, we have turned to the general plans into specific plans, especially for 20 top-2013 -- 2012-2013. we will do the same thing with

the fiscal '13 plants over the next year. we understand that we need to make more disciplined use of our defense dollars. it will not get us all the way to 259. we need to make reductions in our force structure and investment. those will be guided by our strategy. if we have that slide, let me ask jim spencer if he could tell the goals we will be using. >> it is a goal that is adaptable, ready, and technologically advanced. it will be a globally in the aged. our strategy is built towards the asia-pacific and middle east and is built on innovative partnerships and strategic alliance. we have heeded the lessons of 10 years of war and prioritized areas in cyber, intelligence,

surveillance, and reconnaissance assets. this will be man and led by the highest quality professionals that can be funded to defeat aggression anywhere, anytime. >> next slide. we know that we need a force that is smaller and leaner. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

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this is good for business. it is good for the middle class, and it is good for america. let me now turn it over to jean. -- gene. >> thank you. the ultimate end of any budget is not any particular number or ratio. if this -- it is an economic strategy that is designed to make the middle class stronger, more secure, and more inclusive. to meet at end, to meet that goal, you need a plan that returns us to medium to long-

term fiscal sustainability to give companies the confidence to make the united states still the place to do long-term investment and job creation. secondly, you need to have more momentum to the recovery and job creation at this moment. we are still digging out of the largest hole and worst recession since the great depression. third, we need to have the investments that lay a foundation for the private sector to grow and become more competitive. these three goals are not contradictory. they are as complementary as good hitting, good pitching and good fielding is for a baseball team, or to seasonally adjust, a good shooting, a good rebound in in good playmaking. if you contract too quickly, as

we have seen in other parts of the world, it not only hurts your growth and job creation, it can be counterproductive to your fiscal goals. there is widespread agreement, widespread, ranging from the federal reserve chairman to the congressional budget office to top economists, that this type of balanced approach of ensuring strong demand and more momentum for recovery at the same time that you're laying out a framework for medium-long term fiscal discipline is exactly the right recipe to give confidence and growth in this recovery and expansion. there is equally that outside independence -- independent validation for the fundamental fiscal approach the jeff discussed and the president has called for since he has come here, which is that you

ultimately need a grand compromise that includes a combination of entitlement reform savings and revenues. that is what you have seen called for from goals-samson -- bowles-simpson and other commissions. whether or not you agree with every measure in this budget, there is no question it achieves this type of balance between revenue and spending cuts. the only question is whether the house republican budget that will come forward soon will, for the first time, include any semblance of that balance in their budget. now this plan, as jeff said, does include immediate efforts to strengthen the pace of recovery and job creation. there is little question that the payroll tax cut, the unemployment extension and the 100% expensing were critical for the resilience of our

economy in 2011 when it faced several hits, both external and unfortunately from the debt crisis and downgrade internally. one economist said that deal probably saves us from another recession. the extension that we just did this december for another two months gave the possibility, the opportunity for us to have the type of strong january that we saw. imagine that instead of the payroll tax cut being extended and unemployment insurance being extended, we had story after story about a hundred and 60 million americans taxes going up, a million people losing unemployment insurance. it is unlikely we would have seen the momentum and job

creation that we did this january. so, the payroll tax cut and the unemployment insurance are seen as having some of the strongest bang for the buck by independent forecasters in the congressional budget office. these outside economists have said the full extension would mean a half percentage of growth this year and well over 500,000 jobs. if we fail to extend unemployment insurance right now, two 0.5 million americans would lose their unemployment benefits in the next two months alone, and the payroll tax cut, as we have said, would go up. payroll taxes would go up for 160 million people with the typical family losing $40 per paycheck. this is obviously a critical part of our short-term, immediate job creation strategy. but we also include more aspects that we think are

critical. as alan krueger would tell you, about the only thing that was negative in the january jobs numbers was that 9600 teaching jobs were lost. 105,000 teaching jobs were lost to read the last 12 months, and to under 54,000 teaching jobs have been lost since -- 254,000 teaching jobs a been lost since the recession. this is a self-inflicted wound. this did not have to happen. had the congress passed the president's initiatives regarding teachers and first responders, we could be gaining in these areas instead of losing in them. so the president includes $30 billion for teacher layoff prevention and to help first responders in this budget as well. on school modernization, we know that the unemployment rate among construction workers is up 13%. we know there will never be a better time to, with lower

interest rates and more available workers, to rebuild our schools and our infrastructure than there is today. the president include, as he has before, $30 billion for school modernization, $50 billion for infrastructure investments, and $10 billion for an infrastructure bank. again, there is nothing fiscally responsible about infrastructure delay. you get no points for that. what better time than right now when it would strengthen our recovery and help unemployed workers who are better -- who are desperate to get back to work? beyond the immediate efforts that we need to do to get job

creation going, stabilize our economy, the president laid out his keller's -- pillars both in the kansas speech and the framework in the state of the union. as you'll see in the details as well as the state of the union, we put a strong focus on manufacturing jobs. we believe manufacturing punches above its way economically. beyond employing 11 million people, it has significant effects on multiples of additional jobs the support and are part of manufacturing. because a 70% of all private sector research and development, 90% of all patents, 60% of all exports. we put in detail some of the things we talked about in the state of the union on incentives for bringing jobs back, removing deductions for shipping jobs overseas. you can see in here today that

there is a $6 billion tax incentives over three years to prevent the downward spiral that happens too often in our communities where when there is a massive plant closings, layoffs, or perhaps layoffs that could be related to the military drawdowns, that we are -- have a strategy for those communities to attract new employers, not after they've gone to the downward spiral, the before. this budget will include a $5 billion clean energy manufacturing tax credit, often called 48 see, it is more than doubled. the demand is so high and this brings together the presidents pillars of both energy and manufacturing. the same is true with the extension of the 16 a three

provisions -- 1603 provisions that seem to have been very effective. an expanded and permanent r&d tax credit of 17% to give companies the confidence and security to make those investments. we will talk more about manufacturing innovations in weeks to come. another element that brings together the president's energy and manufacturing pillars are our advanced vehicle strategy. you will see in your new consumer tax incentive for buying advanced vehicles. these are technology neutral. there at the point of sale. they're worth $10,000. we do not pick between natural gas or electric vehicles. we let the market determine that and give consumers the incentive to buy these cars. this will come together with the community challenge for

infrastructure deployment, and the first-ever tax credit for heavy truck natural gas tax credits, the first credit of its kind. you have seen the we also, as part of our jobs manufacturing strategy, put forth an energy trade enforcement center, 50 dass 60 new people, greater coordination kick -- 50-60 new people, greater coordination in the government, and this is designed to bring additional trade cases that will level the playing field against countries around the world including china. the pillar of education and skills i am going to leave largely to cecilia, but make one point. overall, you see a very significant commitment to training at this time of very high unemployment where we are still coming back from the worst of this recession, still

gaining traction, still trying to make sure that more people are able to get the jobs. in this, you are a -- you will see a few principles in terms of community colleges -- this is where studies and evidence points us to go. the president talked about responsibilities and shared sacrifice in the state of the union. that is embodied in the budget

as well. one of the items that is in this budget that had not been out was the fact that the president is calling, in this budget, for dividend income to be taxed at ordinary income for those making over $250,000. for dividend income to beat tax at ordinary income for those making over $250,000. good i want to be clear on something. for those in the 15% bracket, the dividend rate will remain at zero. if you are in the 15% or the 10% bracket, at any income will continue to be at the president's budget. if you are out of 20% rate, it is 15% and will continue to be so. ordinary income was what the rate was during the clinton administration.

it was consistent with a strong and robust economy. the president had sought to keep a rate at 20%, as with capital gains, but the president believes at this time, while we are asking for shared sacrifice across the board in entitlements from house to agriculture to civilian retirement, we cannot afford to devote $226 billion to lower tax rates for the highest income americans. our system for taxing income for the most well-off americans is clearly broken, and the best way to fix that is through hard choices as part of comprehensive tax reform and not by spending $206 billion on a

tax rate that is part of the reason why so many people people are paying lower rates than middle income people. i will turn it over to our partner in crime. >> thanks. just to round out the picture by my colleagues, you have heard the president talked about the urgent need to make sure our students and workers are getting the training they need, as our economy continues to expand and grow. the budget has two proposals. the first is his strong view that now a quality education

should not be a luxury. it is an economic imperative that should be available to every family. there is a vital need to make sure that we are providing opportunities for workers. to start with the education and peace, you have heard some of this before. the first part has to do with higher education. he talked about how a student loan debt is outpacing credit cards and everybody has our role to play in making sure colleges more affordable road the budget proposes to do what the federal government can to play its part by making a permanent tax credit and also by making sure a student loan interest rates do not double as

they are expected over this summer. this includes a proposal to make sure that does not happen this shoe live. there is also a series of incentives the budget reflects to make sure colleges and states are doing their parts. there is a series of incentives to keep tuition is affordable, to move aid in the direction of colleges but are keeping tuition affordable and providing good value and investing in students, needy students in particular. there is a race to the top program focused on affordability. there is a program to help states innovate, so it is a reflection of this notion that states have a role to play, colleges have our role to play,

and the budget really reflects fiscal incentives to make sure we are making higher education affordable. the second big issue is continued investments in the race to the top program. the budget provides $850 million in driving reforms at the state level. it has been expanded to include an early learning challenge, so race to the top is being applied to make sure students enter kindergarten ready to learn. this year the program also includes sister fashionable program so we are not just driving reforms at the state level. did you heard the president described in the state of the union address a series of reforms aimed at elevating the teaching profession. there is a $400 million innovation fund reflected in this budget and a program to

challenge states and districts to work with teachers to really have a transformative change on the teaching profession, to create more career ladders, to focus on training programs for education. this is something the department of education is working on pure good -- is working on. the president challenged do -- travel to the community college to announce his proposal to provide more americans with the skills they need in this 21st century the economy. this is a career fund designed

i've training 2 million workers for the jobs coming and who in demand now -- coming in demand now. we know we are going to need to fill millions of positions in high-growth industries like health care, clean energy, information technology, and this fund is designed to create a partnership that would be implemented by the department of labor and the department of education. also to make sure they are building a partnership to provide for their communities. the idea is to help community colleges become community career center. there is a piece of the same death the colleges themselves. -- there is a piece that is aimed at the colleges themselves. state and local governments can apply for these funds.

there is a piece of this dedicated to entrepreneurship to help make sure we are providing training for folks in small businesses, and this administration has made great investment already in making sure community colleges have the resources and infrastructure available to meet the needs of this economy and students in this economy, and what this does is build on that record by making sure community colleges are linked with states to make sure they are providing the training for the jobs where even as some americans are looking for work, jobs are looking for workers, and training is really going to make the difference with linking workers to jobs that are available, and i will try to go back to can. -- i will turn it over to ken. >> thank you. >> [inaudible]

>> i could go further. and he could add on. when the president came into office we knew things cannot in good shape, but we did not know how bad they were. the fourth quarter 2008 gdp we thought was - 3% or so. we now realize it was close to - 8%. the president inherited a much worse situation. on top of that, during the previous administration, we had

medicare, bush tax cut, so i think the situation was far worse than we had anticipated, given the economic news i started with. now the president's budget actually does cut the deficit in half by 2014, so that is one year later than the original projection, and that is explained by the situation we inherited, particularly on the economic front. just look of the defense side. it would require $500 billion. across-the-board cuts is a bad policy bureau did we believe this requester should be replaced with a balance -- is

bad policy. we believe the requester should be replaced with a balanced we should get rid of it as bad policy and achieved the 1.2 trillion dollars called for. the sequester is a very important function, so this budget is not calling for the sequestered to be taken away. they are calling for the money to be replaced by balancing the deficit reduction. >> in november when you look at first quarter and the third quarter, the average was projected to be 1.65%. it ended up being a 8.9% and

6.7%, so that period we were averaging 7.8%, so have people down the deficit projections they would have been a bit darker. there is no question we face some external shocks. we do want to say this budget, when you look of the ultimate goal, is superior to the 2011 budget. now 2017 and after, the deficit has come under 3%, and let me add. it is not just that we think is. the opinion is not ours. the entire rationale was to create an enforcement mechanism designed to be mutually assured destruction on both sides to

force people to come to the table to come up with an appropriate balance of deficit reduction. that is what happened when they went to andrews air force base, so the whole design of this was as an action-forcing event to make us come forward with some sort of compromise, so i think it is totally appropriate to look at the amount rockaway over one trillion dollars, and there was an enforcement mechanism that would force us to come together and agree on amounts that were equal to or more, and we have come up with those assets are equal to that, and that is where our focus should be.

>> the difference between your deficit projections in this document and the september document, because the policy seems to be the same, but the debt in 2021 is one trillion dollars higher. >> the differences primarily economic assumptions. we also have proposed now taking the aotc permanent, so that explains the remainder. good >> what about oco? >> is capped at $450 billion. that saves $800 billion.

we use out for transportation. >> which is another policy change. >> the super committee was meeting, and we wanted to put forward a provision that were deficit savings. the president thought that would be helpful to the process to have savings people could agree to, knowing they had the blessing of the president, so we tried to put in all the deficit savings. we did not put in all our aspirations, so there is also a different purpose to that submission. >> is this a situation where if you have a compromise you would be going above and beyond 4

trillion dollars? would you go beyond the numbers in this budget, or would they just changed? >> obviously, i probably will not negotiate a compromise with you right now. i think that is called negotiating against yourself. i think we all realize when you engage in a good face bipartisan effort, if you have a common goal, which is to strengthen our economy. when we put out a budget, it has $600 billion in entitlement savings, and we have already agreed to the most significant discretionary spending cuts in decades. the discretionary number in this budget, 2.5% of gdp.

that is the lowest it has been since 1964. in other words, we have put forward significant entitlement savings. the president has taken on sacred cows on our side and put forward entitlement savings you have not seen details in the president's budget before, and he puts out a budget that is equivalent to $2.50 in interest cuts for every dollar. that puts forward the type of problems that offers the opportunity for compromise. less see if we ever see a budget coming from the republican leadership of the

senate or the house or even of remark about has that type of balance, where revenues are exclusively put on the table in a significant amount that would be a step forward. we will see. >> [inaudible] second, your overall thing about fairness. the trucks on corporate tax reform, we are going to speak further on that before the end -- >> on corporate tax reform, we are going to speak further at the end of the month, but the president has made clear he supports corporate tax reform

that would reduce loopholes, lower rates for people investing, creating jobs in the u.s., do so further for manufacturing, and that we need a global minimum tax so people have the assurance nobody is escaping during their fair share as part 0 of our race to the bottom or having our tax code actually subsidize and facilitating people moving their funds to tax havens, but we will say more in more detail before the end of the month, and in terms of revenues, the president is looking for shared sacrifice. this is a democratic budget but

has savings and medicaid. it has savings for new beneficiaries in 2017. it has agricultural, civilian retirement savings. it has tough choices. how can the president go to the town hall of look at average americans who are being affected, how can they be asked to do that at the same time they say the most fortunate americans do not have to contribute at all? i think when you looked at what it takes to get the public and general support for a balanced budget agreement, you have to have that type of shared sacrifice for this to be in acceptable to the public at large.

>> you talk about getting rid of the bush tax cuts. is there a reflection in the budget? >> in the budget we have, we returned to the pre-bush tax payers. for the people above 250. the only exception to the president had previously was he had not led dividends go all the way back to the clinton era, but in this budget he decided that was something he could not afford. in terms of tax reform, he could not lay out what the rates would be, because that was something he would have to work out, but i think what the president has made clear is it needs to be reform that leads to a tax code as progressive if not

more progressive than it would be if you let the bush tax cuts expired. this is a fair point. in both the corporate and individual side, lead to reforms to the current system as we noted -- as we know it, so things like the dividend rate is a proposal under our current tax system. then we have other things where you hundreds the a more fair tax occurred. good and region where you could see a more tax code. this as opposed to an explicit provision. we are saying when you do tax reform we ought to get rid of

the alternative minimum tax. we have to patch it every year,, and we are essentially saying we should replace it ahoy -- to replace it, but the best off are being asked to pay less than the middle class. >> then you have corporate reform common sense stuff like corporate jets and tax

expenditures, and those are offset by tax cuts for the middle class and small businesses. you get a net of 1.5 trillion dollars. at the same time, the president is favorite to -- is in favor of corporate and individual taxes. >> [inaudible] but then not talk about your revenue assumptions? >> reform takes time, and the president wants to be very specific about how we are going to raise the money to have a balanced approach. there is $2.50 of spending for every dollar of revenue, so we want to have tax reform, but the president's budget is very specific about where the revenue comes from.

>> to answer your question, we do believe in the individual tax reform we would like to see individual tax reform that would also contribute 1.5 trillion dollars to deficit reduction as part of the overall plan, so if we were just saying we wanted 1.5 trillion dollars of revenues in reform, you might say, you are just putting out a number. how would you get it? we are showing you in detail how we would get it under the current system. the same values in terms of simplicity, making sure we had a tax code that was as a progressive as if the bush tax cuts expired.

that gives some sense of what our standard would be, and that no 1.5 trillion dollars is more than the republicans would prefer. it is a bit less than called for, so i think it is a reasonable bipartisan measure to put out. >> i want to make it clear there are no tax increases for families to larger $50,000 or less. there are tax cuts, so no increases for families $250,000 or less. >> in the budget you tax the evidence for upper income taxpayers. it rolled back a little bit from the campaign promise to maintain the 20% rate on capital gains. did that give you most of the way towards the revenue and you wanted, limiting the dividends

for upper income taxpayers? i take your point that the upper income is lower than you expected. do you still have a relatively optimistic as the met? >> do this first now. when we make our projection we do it under the proposal that it will -- under the assumption that it will become law, and jean mentioned the congressional budget office has hired a bang for the buck region -- has high bang for the buck. our forecasts are based on the assumption that the economy will strengthen.

>> i do not want to confuse everybody, because there are apples and oranges in light of what we are talking about. there are a number of things you can do about so rates. there should be a rule that people are paying an effective rate of 30%. if you were, halving the dividend rate to go higher would mean less people would get higher by having of the offer an alternative minimum tax. that is how most famous people and of getting such a low tax

cuts. warren buffett and arranging for himself to get in, as dividend income and being at a 15% rate, but there is a little bit of apples and oranges. if you are putting the buffer rule on our current system and the dividend rate was back to ordinary income and the tax rates were going towards the clinton era, you would have a smaller percentage, and the idea of the buffer role was not the main force of raising revenue. it was to be a minimum tax, and we have said from the beginning we never expected the most well-off people to hit back. many people pay over 30% rate. this is designed for people who park their money somewhere or arrange for their money to be in a preferential rate so the combination allows tens of

thousands of very well off people to pay less taxes than ordinary or middle income families. >> time for one last question. >> [inaudible] 5 i do not think we take a pass. we have to go back and think about the act of save $100 billion in its first decade. and we have specific savings on medicare and medicaid and other programs in this budget and $270 billion of mandatory other savings, including federal employee retirement, the pension benefit guaranty, so i

think we are taking a serious task at deficit reduction on the entitlement side and also the balance package that has $2.50 for every dollar of revenue, and most importantly we have deficits every year. we have reached a point where the debt is stable as a percentage of gdp. >> can i point out that if you look at the ninth or 10th year of our budget and look of the amount of savings we have on the health care side, is the same in 2021 as the savings in a bull-simpson plan. we do start beneficiary changes for 2017 and beyond, so the real issue is i should point out everything that is happening

in entitlements right now, everything in terms of dramatic expansion of people, because of the aging of our population, all of that was known in 2000. and we knew in 2000 that between 2000 and 2020 there would be a large percentage of increase on people on medicaid. we were able to project now balance the budgets, even surpluses. a lot of what has changed is the fact that besides the cost stabilize 8% of gdp, which is important to make america a

place to invest. that legacy and the being the difference between us struggling. that just makes the case that you need to deal with revenues on those who are most fortunate and entitlements at the same time. we've never said it was one or the other. we have always said we needed a grand compromise of spending savings and revenue savings, particularly on those who are the most well off. that is what we have been trying to achieve. that is what the president has been trying to achieve. that is what he tried so hard to do over the summer. that is what he has put in this budget.

>> barb [inaudible] >> what matters is what our external debt is as a percentage, whether it is rising or coming down. what you have now, when you do what matters most, you have external that does not include a ban assets like student loans. you have it coming down after a round of 2014 or 2015. aytime you're looking at country's economic stability, that is what to look for most of all. the president works very hard to get a grand compromise over the summer. he is putting out entitlement changes that have never seen in a budget before. even on the military side. medicaid, medicare.

i think this president has very much stepped up to the plate, both in the negotiations over the summer and in this budget. i think all that is holding us back from progress but has been, quite honestly, a resistance from too many on the republican side, particularly in the house of representatives to do a balanced package with revenues. i think there are clearly some republicans who would like to engage in that kind of grand compromise. but unfortunately, not enough. >> unfortunately, we are out of time. our office, as was at the white house, any questions you have, please get in touch with us through e-mail or phone all day today. we'll be happy to answer your question. thank you.

but del >> now online at the c- span video library, speeches from last weekend's conservative political action conference. >> we must out start -- we must outsmart the liberals. off we must outsmart the stupid people who are trying to ruin america. >> it is about one country united under god. we are not read americans. we are not blue american spirit we are red white and blue. if president obama, we are through with you. >> they can come along and, at our throat as long as we are foolish enough to raise taxes and throw money at the center of the table. and in making dull lot like the scene at the movie at the end of the bank robbery, one for you, one for you. > on "washington journal" ths

morning, we will examine the bank is -- our guest is martha coakley. also, kevin brady. "washington journal" is live every day on c-span at 7:00 a.m. eastern. now we get reaction from some republicans to the president's 2013 budget request. >> come on in. we are on time, are we?

there we go. the budget submitted by the president of the united states is more than just a document that has lines in expenditures in it. a budget represents a revision that that president has for the future of america. in this case, it will be 10 years. mr. bernanke told us a few days ago in the budget committee that we need to be looking beyond the 10-year window, particularly when dealing with systemic problems' like our economy. i believe the american people are entitled to and must have an honest budget, budget that clearly lays out the challenges we face and how the chief executive would expect to meet those challenges. i cannot imagine governor bentley in alabama not taking the opportunity to produce a budget that allows him to lay

out how he is going to meet the challenges we have, where governor christie are governor brown in california or governor cuomo in new york. this is the fourth year of this president's term in office, and his final opportunity to let out a coherent vision for how this country ought to meet the challenges that we are facing financially. remember, is chairman of joint chiefs, admiral mullen, said that debt is the greatest threat to our national security. just this morning on the msnbc, the chairman of the council on foreign relations said reece could be the united states next year. erskine bowles, testifying last year before the budget committee, said we are facing a debt crisis and it could happen as early as two years. we are in that second year now. this is not something that is

just a normal dog and pony show around congress. it reflects the challenges that we would just a couple of things about, under the pronouncement that we are hearing from the white house, this budget reduces our deficit by $4 trillion. that is absolutely untrue. it does not reduce the deficit at all, virtually. it is just a stunning thing. i saw what tagline on cnn this morning that it would reduce spending by $4 trillion. give me a break. it increases spending $1.5 trillion. it increases taxes $1.90 trillion. in his own budget, the total debt he projects in the documents he has given to us would increase my $11.2 trillion

over 10 years. that is how much the debt would increase. whereas the budget control act that we passed last year, and the president basically agreed to, that is $11.5 trillion in the federal deficit. it does not save one trillion dollars. it does not save a third of a trillion dollars, according to the best estimates we can come up with. it is under $300 billion that it would save over 10 years. it is deeply troubling thing to me and i deeply believe that it is a matter that should be discussed. we have now gone for years without anything occurring that would get us off the dangerous

that course we are on, except that this president during his tenure in office has added $6.30 trillion to the gross debt of the united states. i have a group of folks behind me and i will yield to them. who is going to go? >> thanks very much. i believe the president has abandoned his role as leader of this nation by not being honest with the american people about the significance of the national debt. somebody asked me if this budget was dead on arrival. i said it is not dead on arrival, it is debt on arrival. that is what we are seeing. this is an ambush budget. the president is ambushing the american people by promising to cut the deficit by $4 trillion, when in fact he adds to the

debt by $11 trillion. in the pretext of trying to help everyone, in fact, what his budget does is continue to bury the american people under mounds of debt. the promises will never occur and the spending he demands just cannot occur. this is the fourth year in a row were what we are seeing is a deficit of over a trillion dollars. remember in 2009, the president promised the american people that in fact he would cut the deficit in half by the last year of his first term in office. in fact, $1.30 trillion is the deficit that is included in this year's budget. we have gone 1000 days without a budget passing the senate. last year his budget came to the senate. harry reid would not bring in, the majority leader. mitch mcconnell roddick and it failed 0-97.

the twin tidal waves of social and security and medicare, and the numbers get so big that it is sometimes hard to realize how much deficit this year alone $1.30 trillion is. the president pretends that if you just raise taxes on a small number of people, you could solve all these problems. this is how much this deficit is. if you took all of the money earned over a million dollars by everyone in the country, took it all, and then on top of that, took all of the gold in fort knox and sold it and add it all that together, that is less than the deficit in this year's budget alone. that is the severity of what we face. and this budget does not help solve the problem.

>> i would just say one thing before we go forward. i think our colleagues would join with me. i would say if the republicans are given the opportunity next year to have a majority in congress, we would use the rule that allows the budget to be passed by 50 votes, not 60 votes required to pass the budget. we will pass a budget. we will have a bicameral budget. we will alter the debt course of america and put us on a path to growth and prosperity and not to debt and decline. that is a commitment and i am deeply disappointed we have seen such poor leadership of former senate leadership on the question of bringing up the budget. >> i was told alphabetically, so i will assume that is right. to follow on senator sessions points, this is not a serious

proposal. the president intends to exert no effort to get this budget passed. i thought last week the most telling statement that anybody made is when senator reid said he did not think there would be a senate budget. they asked the white house spokesman what he thought about that and he said they have no opinion on that. how could the white house not have an opinion on whether you even have a real budget discussion or not? you have to have a budget discussion. you have to have a budget debate. at some point you have to have a budget fight if we are going to get the priorities of the country decided what they should be decided. when jay carney can stand there and repeatedly be asked, the white house and has no position on whether the senate has a budget or not, and he says no, we have no position on that. what kind of leadership is that? we are apparently going to have we are apparently going to have -- apparently the third year in