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 treading water, he actually 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 majority leader of the united

states senate, the only person who can put a bet to, we did put a budget on the floor of the senate for a vote, and has refused to do so for well over 1000 days and has said he would not put this budget up for a 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 would like to have but to simply 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 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 investments and create the jobs. completely unacceptable, and i think the american people understand that. >> i will be brief. i know a lot has been said. all of us to come here are

shocked by the lack of fiscal discipline that occurs here, but truly, this budget makes a mockery of the american people. our state has been blessed for decades in having governors from both sides of the aisle that have run our state well. i think -- i know that if a governor of our state presented a budget like this, they would literally be run out of the state. 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-simpson laid out that they put 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 to the american

people what his 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. over 40 cents of every dollar the federal government spends is borrowed money. 100% of gdp is our debt level right now, and that is increasing significantly over 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 real action in washington, because is not sustainable for 10 years.

it may not be sustainable for one or two years. certification, jeff mentioned what we would do as a majority next year, and i agree with that commitment. i 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] to pass the payroll tax. >> 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? 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.

>> you would -- you're saying 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? thisy don't you look at 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] >> for more information on the $3.80 trillion budget, go to c- span.org/budget.

treasury secretary tim geithner will be on capitol hill testifying about the president's proposal this morning. we will have live coverage from the senate finance committee. gets underway at 10:00 a.m. eastern, live on c-span 3. >> there has been honest contention, a serious disagreements, and i believe considerable hot arguments. but don't let anybody be misled by that. you have given here in this call, a moving and dramatic proof of how americans go honestly defer move forward for the nation's well-being shoulder to shoulder. >> we look back at 14 man who ran for the presidential office and lost. go to c-span.org/the contenders to see video of the contenders who had a lasting impact on

american politics. >> and what about you? are you now out of debt? do you have a comfortable backlog in the bank? are you paying less for the things you buy? or more? do you really think things cannot be better? of course they can. working together, we can and will make them better. c-span.org / the contenders. >> we will get a look at today's news plus your calls and e-mails coming up on "washington journal." defense secretary leon began test -- leon panetta and the joint chiefs of staff head will talk about the policies of 2013. live coverage from the senate armed services committee starts at 9:30 eastern. the house is in and noon eastern and they will work on highway and transit programs and the extension of the payroll tax cut. live house coverage is on c-