better, mr. speaker. the president said this samake or break moment for the middle -- this is a make or break moment for the middle class. we can do better and we must. mr. speaker, when i talk about why it is this budget doesn't make tough choices, you can see it here on this chart. this was actually a chart coming from the "wall street journal" just a few days ago. it talks about where the money comes from that pays the american bills burden here, the moneys that we owe. it talks about where those dollars go. on this side where the dollars come from you'll see, mr. speaker, about half of it comes from individual income taxes. about $1 trillion of annual receipts comes from social security medicare, and retirement receipts. we see a little bit down here for corporate income taxes, excise income taxes, duties. this is where the money comes from. look at where the money goes.

this is important, mr. speaker. because when we talk about making tough decisions, when we talk about confronting the mountain of debt that's building when we talk about doing things that will make certain that the lives that our children will lead will be more prosperous than the lives we have led. we have to go after those issues that matter. these aren't just colors here what we call discretionary spending, that's spending we have taken over $1 trillion out of thus far going forward. it's defense spending in this pie piece. nondefense discretionary spending. and then that takes us to this giant red area, mr. speaker. the giant red area has three things in it. the big pie piece is medicare and medicaid. that's where the money goes. money in this country that the federal government spends goes to pay health care costs. medicare and medicaid $1.5 trillion this year.

social security, folks been paying into social security all their life. they dag gum have a rate to get their money back. the bill we passed today begins to redefine that commitment for the first time, i'm concerned about that, but $820 trillion go into social security. then $250 billion $250 billion mr. speaker, goes to pay interest on the debt. now, just to put that in perspective, mr. speaker, we have defense spending, medicare, medicaid spending, social security spending, we have interest on the debt and in this pie piece we have every everything else. everything. our courts our highways, our environment. our homeland security our immigration. our parks. everything else. we spend half as much mr.

speaker, half of that amount that goes to everything else. we spend on interest payments alone. half of the amount that this country spends on everything except social security and medicare, medicaid interest on the national debt, national defense, everything else we spend half that amount on interest payments alone this year when interest rates are at their lowest level in a century. mr. speaker, what do you think's going to happen when interest rates are no longer at their lowest level in a century? this bar is going to eclipse everything else. so what can we do? i'll tell you what we can do. the money is in medicare and medicaid, the money is in social security, mr. speaker. i'm in my 40's. we must, we must come to people in my age bracket and say no

more. you will not get what your parents got. got to say that to me. you will not receive what your parents received. you got to say that to me. will there be a safety net? there will. can we provide certainty to folks that it will be there? we can. but if you talk to anybody in their 40's mr. speaker, they'll tell you they expect those programs to be long bankrupt anyway. why? because they are. so these are the tough decision that is we have to make. what are we going to tell the next generation. how are we going to protect these benefits from the current generation? mr. speaker, this budget does none of that. not a word. not an idea. not a proposal. nothing in the president's 2013

budget that even hints at the direction he would propose that america goes. to confront these financial challenges. you think we dodge these challenges, mr. speaker? do you think we can just put these things out of our head and pretend they don't exist? this is what we are looking at, mr. speaker. i wish you could see this. what we have here is a debt in to country as a% of the g.d.p. we look at places like greece where the debt has grown so large. this is the debt as a percentage of our economy in world war ii. in world war ii, mr. speaker. when things had gotten so tough and we were having to ration rubber and ration steel and ration sugar and ration salt, when the country had come together to fight a common foe around the globe, this was our

debt as a percentage of our economy. here we are today, mr. speaker. we are not rationing rubber. we are not rationing sugar. we are not taking those common steps of sacrifice because we think our economy is about to go over the cliff, but it is. and this red line, mr. speaker if we continue with this blue budget that the president has sent to us, that makes no tough choices about our future this red line is the debt that's coming. this is what the law of the land spends on behalf of your family and mine and every other american family, mr. speaker. and spends our nation into oblivion. the truth is it's never going to get as bad as this chart, the congressional budget office, which does the projections, their computer actually breaks down about half way through that red line and says there is no way the economy can continue to

function under these circumstances. america will no longer exist. the good news is, mr. speaker, it's not really going to get to the end of that line, but that's the challenge that confronts us and that's the challenge that this budget avoids. but that's not why you and i ran for congress, mr. speaker. we ran for congress to make a difference. to a man, woman in this freshman class, republicans and democrats alike, mr. speaker, i have not met one that came here because they thought it was a nifty looking business card. i haven't met one that came here because they couldn't do anything else and they thought why not i'll run for congress. to a man and a woman, every republican and democrat i met in this freshman class came to this body because they want to save america from certain demise. certain demise. it's not possible demise. it's not maybe kind of demise. it is certain demise. so what we did as a body mr.

speaker, when the senate wouldn't act, when the president couldn't act what we did as a body is pass the prosperity budget which is this green line which changes the course of america. mr. speaker, there are two ways to change the correspond of america -- course of america. you can change the america we have always had into something different. that's where current law is taking us. or you can reclaim the america that we have always dreamed of that our parents and our grandparents and our great grandparents passed down to us, sacrificed. we can reclaim that america by making tough decisions. mr. speaker, we have to make those tough decisions and with the american people behind us we will succeed. i thank you for the time. i yield back. the speaker pro tempore: the

chair will entertain a motion to adjourn. mr. woodall: mr. speaker, i mover the house do now adjourn. the speaker pro tempore: the question is on the motion to adjourn. so many as are in favor say aye. those opposed, no. the ayes have it. the motion is adopted. accordingly, the house stands adjourned until noon on tuesday next.

>> u.s. capitol police say their officers arrested the man and a sting operation. a spokesman said the person was monitored by officers and the public was not in danger. coming up in under a half an hour, we will take you live to washington, where the president will be speaking at the boeing plant there. until then we will show you some of the house floor debate ahead of the passage of the payroll conference agreement. conference report. as a result of a lot of long hours, hard work, and determination on both sides of the aisle and both sides of the capitol, this agreement shows the american people that congress can govern and washington can work. first and foremost, this

legislation prevents a tax increase on 160 million americans. as a conservative, i look at the agreement and see some very big wins. chief among them are the most significant reforms to the federal unemployment program since it was created in the 1930's. all designated to promote re-employment and paychecks instead of unemployment and benefit checks. while extending unemployment benefits through the end of the year, this agreement creates a national jobs search standard for the first time. covering benefits from beginning to end and requires every unemployed american to look for a job if they receive unemployment benefits. the agreement allows states to spend unemployment funds on paying people to work instead of just sending them a check while they are out of work. it ensures taxpayer funds are properly spend by -- spent by permitting drug testing under commonsense rules that help people get ready for a job. it expands work sharing programs to help avoid layoffs in the

first place, and it improves fiscal responsibility but not only recovering more overpayments which currently total a staggering $12 billion per year, but also by making sure that this program is fully paid for. the last item something i want to focus on for a moment. all government spending in this agreement is fully paid for and not with one dime of higher taxes. all spending object un-- on unemployment and health care are fully paid for. this is a significant victory for those of us concerned about the national debt. and the culture of deficit spending that has gripped washing for far too long. for example the unemployment program has added nearly $200 billion to our nation's debt over the last four years. no more. we paid for it in december, we are paying for it today, and we set a clear precedent that the congress must live within its means, no more spending unless it's paid for, period. i understand this is a compromise. and not everyone likes everything in here.

if i had my way, the bill passed by the house in december would be the law. that was the only bill that extended these programs through the end of the year. it was the only bill that was fully paid for. and it was the only bill that ensured seniors and their doctors were protect interested dramatic cuts for at least two years. but we don't control washington. democrats still control washington. they control the senate and they control the white house. utilizing a process that dates back to our founding fathers, house republicans have scored significant victories in this conference committee. our founding fathers recognize that washington would not always be united. in their wisdom they knew even divided government must still govern. and that's what we are doing here today. governing and providing a solution to the very real problems americans are facing in their daily lives. i urge my colleagues on both sides of the aisle to join me in supporting this legislation which pays for new spending with spending cuts, prevents working americans from getting hit with a tax increase next month, reforms our unemployment programs, and ensures seniors

continue to have access to their doctors. i reserve the balance of my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from michigan. mr. levin: i yield such time as i shall consume. the speaker pro tempore: the gentleman is recognized for such time he may consume. mr. levin: the basic fact is that this legislation is very different from the december house republican bill, very different. and any efforts to mask that are false. and that house bill was the main bill before the conference committee. the basic fact is the conference committee made major changes to the house bill that passed in december essentially on a partisan basis. and therefore this legislation is much better for the american people. the speaker said this about this bill, let's be honest, this is

an economic relief package not a bill that's going to grow the economy and create jobs. that's not an honest statement. it's wrong. this is a bill that relates to the economic growth of the united states of america. we are recovering. and this bill will provide a boost to continue that recovery. it continues the 2% payroll tax through the calendar year. and it is not offset as was true of the house republican bill in december. it had massive harmful cuts that would have been counter cyclical and would have undermined further economic growth. so in that respect this is very

very different. it's also very different in terms of unemployment insurance. let's be clear about that. the bill that the republicans passed through the house that was the main bill before the conference committee would have slashed 40 weeks of unemployment insurance for millions of americans in every state regardless of the unemployment rate in that state. and this bill essentially changes what was in the house bill. it extends unemployment insurance through the rest of the year up to, this is the maximum, up to 89 of 99 weeks through may, up to 79 weeks through august and up to 73 weeks through december, depending on the level of unemployment.

let me just say our chairman has talked about job search and now a requirement of people be looking for work. that's already in the law of every state. that isn't a meaningful reform. in terms of job search, everybody not only registers but also, as i said, is requiring to look for work. and you know, i find it an insult to the unemployed of this country to say essentially what we're simply giving them a check instead of a paycheck. you know if you talk to the unemployed through no fault of their own, they are looking for work. they had a paycheck, in most cases, year after year after

year. they work for their unemployment insurance, and to simply label this an effort to get people off of unemployment insurance, unemployment insurance is not a welfare program. people work for it and they need that assistance as they look for work. the bill that passed through the house had a g.e.d. requirement. that's out. to say to people, you don't get a check if you're not in a g.e.d. program when there are 160000 people in this country who are on waiting lists for education, that's out of here because it deserved to be out of here. and in terms of the drug programs, the effort to test people for drugs it is so limited so it is really masking the reality to call this major

reform. it freezes in terms of the reimbursement for physicians through december. and let me just close by saying a few words about the limits on this bill because there are limits. it would have been much better to treat unemployment insurance as an emergency as we have for 20 years. this is the highest level of long-term unemployed on record in this country, which is another reason not to blame the unemployed for their unemployment as the house bill in december did and some of the rhetoric on this floor continues to do. we were not able to obtain this and i want to say this in terms of a precedent. in my judgment, it should not serve as a precedent. the precedent is 20 years

treating it as an emergency, and let me also say it's deeply unfortunate that some on the other side insisted that federal workers carry a disproportionate share in the cost of this bill. even if there were put forward bipartisan pay-fors that would have cost -- covered the cost of u.i. in a bill that was brought in a bipartisan basis, there would have been an impact on federal employees of $67 billion. this bill has a provision that will apply to pension programs $15 billion over 10 years, compared to the $67 billion that was in the bill that the house republicans passed. so let me just say in closing, this argument provides tax relief to working families, a

framework is in place for the year for the unemployed workers, and a real commitment -- and i emphasize this -- but -- by us democrats to pursue efforts to strengthen the economy and boost job growth so that those hardest hit by the recession can return to work as they desperately want to. and i just want to reiterate how wrong the speaker was when he said, let's be honest, this is an economic relief package, not a bill that's going to grow the economy and create jobs. the opposite is true. the provisions in this bill will help to continue economic growth. the payroll tax, most economists say that. unemployment insurance, people spend it, and that is not only good for their subcystens but

good for the economy of our country. for all those reasons i urge support of this conference committee, and i reserve the balance of my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from maryland. mr. hoyer: madam speaker, i yield myself five minutes. the speaker pro tempore: the gentleman is recognized for five minutes. mr. hoyer: thank you madam speaker. i've taken the unusual process of claiming time in opposition to this bill. i have done so so i could place in context the bill we are considering. i do not rise to necessarily defeat this bill. i'm going to vote against this bill. i am for almost all of this bill. what we are funding this bill with was unnecessary unfair and ought to be rejected. i want to say at the outset

that my friend mr. camp, and i had a very positive discussion. i believe that mr. camp and i could have reached an agreement which would have put me in support of this legislation. we didn't get there. we tried late in the game and we didn't get there. i regret that. i think mr. camp tried. i know that everybody on my side would have supported the agreement that mr. van hollen and i put forward. that agreement would, as the current agreement would say that the only individuals paying for this bill out of 315 million americans are the two million civilian workers who work for us, who work for all of us, who day after day, week after week, month after month make sure we give the services to the people of the united states, protect the united states, ensure that our food is

safe, ensure that we have amphibious agents on the job, -- make sure we have f.b.i. agents on the job, these are all civilian employees. highly skilled. highly trained. highly educated and, yes highly motivated. and every day they give outstanding service to the people of the united states. we talk here and we pass laws here but none of those -- none of that talk and none of those laws makes a difference unless somebody implements what we say and the policies that we set. this congress is on the path to be the most anti-federal worker congress that i have served in. and i'm going to place that in context for you which is why i wanted the time.

first of all, what is the context we find ourselves in? first of all we have a very struggling economy. the good news is the economy is coming back but not fast enough. we need to create more jobs, expand opportunities and make sure that the american dream is alive for all working americans. working americans like our federal employees, working americans like the folks at g.m. who have done just very well, working americans who work in the hardware store, the grocery store, the gasoline station, hardworking americans. and we don't have enough jobs for them. as a result we have high unemployment, and i congratulate my friend mr. levin, for his leadership in making sure that the unemployment provision in this bill is sufficient to try to reach those folks and make sure they don't fall off the ledge. we walked away from them in

december. i'm glad we are not walking away from them today. now, we also have, as all of us know, a struggling economy and therefore we put into effect giving $1,000 more to each and every worker. now, many of your leaders did not support this 2% reduction, and i understand that. i won't go into their names. some are in the chamber, but the fact of the matter is it puts $1,000 of additional pockets into average working americans' pockets. people paying fica. that is people making less than $6,000. that is an important thing to do for us to keep this economy growing. i'm for that. i was for it in december. i'm for it in february. i'm glad we are going to have consensus on that today. but what i am not for -- let me

go on because in addition to that, we are playing a silly little game. with the doctors and with medicare patients, and this silly little games pretends we are going to extend s.g.r. for 10 months. that's balo nmbs ey and everybody knows it -- baloney and everybody knows it. we are going to extend s.g.r. over and over and over again. we should have done it permanently in this bill. we should have done it permanently in the congress which i was the majority leader. we should have done that. i yield myself two additional minutes. the speaker pro tempore: the gentleman is recognized for two minutes. mr. hoyer: so with respect to s.g.r. ladies and gentlemen, we are playing a game and the doctors all over this country and the medicare recipients all over this country know we're playing a game. we're giving them no certainty, no confidence that come this september, october november, we won't have another one of

these silly little debates. now, we also in the context have a deep deficit and debt that confronts this nation that we have to deal with, and we had two commissions that said we had to deal with it. one was bowles-simpson. my friend, mr. becerra sat on that my friend who sits in the chamber. the other was domenici and rivlin and we had others, including the gang of six in the united states senate, and all of them had a premise that we needed to deal with the fiscal problem that confronts us and the other premise was all of us need to contribute to that solution. all of us. now, what do we see that's being proposed in this congress , partially in this bill but only partially in this bill? we have either on the floor proposed on passed over the last two years -- listen to this ladies and gentlemen --

we are about to cut or propose to cut $134 billion out of our federal employees over the next 10 years. nobody else in this bill, not a millionaire, not a billionaire, not a carried interest beneficiary, not an oil company, nobody in this bill other than federal employees is asked to pay. i understand we have hospital cuts. by the way, we have $5 billion to that because we just increased by one year the cut that they know they got. the same for some other things. no individual other than a federal employee's asked to take a cut in this bill. now, you will say to me, no, it's future federal employees. two more minutes. the speaker pro tempore: the gentleman is recognized for two minutes. mr. hoyer: you say it's future federal employees so it doesn't matter.

that's $15 billion of the $134 billion that's been proposed. they've already paid $60 billion $60 billion, and by the way, your side of the aisle is not going to give them that half percent the president asked for so that will be an additional $30 billion. so in three years, mr. and mrs. america, madam speaker $90 billion in contribution to help bring this deficit down, federal employees are paying. and by the way, federal employees is a percentage of our population are down by a third over the last 20 years. it's not that the bureaucracy is growing. yes, our population is growing. we're trying to serve them. down by a third in numbers. now, i know something about federal employee pay. i represent about 60,000 federal employees. you say hoyer is up there defending his people. you'd be right. you'd be very right.

. but most of the federal employees don't live in the washington metropolitan area. they live in your districts all over this country, serving your farmers. serving your drug stores. serving everything that you do. do i think it's the private sector that makes this country great? absolutely. do i believe they need an energized high morale, highly educated federal work force as their partner? i do. and you will not have that ladies and gentlemen, if we keep along this path of every time we come to a bill that's a little bit of trouble the pay for is to reach in the federal employees' pockets. they pretty much are going to say i'm not with you any longer. i want to tell you in terms of recruiting and retaining you will not do it. 40% of the federal work force, ladies and gentlemen, can retire in the next five years.

one more minute. the speaker pro tempore: the gentleman is recognized for an additional minute. mr. hoyer: ladies and gentlemen, you are going to be able to recruit those folks only if you have a competitive work force. let me give you a figure that you might find interesting. there are 33,000 -- 33,300 employees at goldman sachs. average salary, ladies and gentlemen, $367,057. average calorie. -- salary. of 33,300 people. you won't be able to compete. you won't be able to get n.s.a. employees as opposed to semans or microsoft or some of those other corporation, many of which

are in ms. eshoo's district, you won't be able to recruit them and retain them to have the best and brightest defending america and making america the strongest and greatest country on earth. you want america to be an exceptional country, you better best have the best civil service on earth? . as well as the best private sector. one more minute. ladies and gentlemen, i don't know whether most of you know this i saw the gentleman from florida who has been here for a couple months pontificate i didn't know anything outside the beltway. i was the sponsor of the federal employee pay comparability act. and george bush the first signed that october. we worked with his o.m.b. to get it. what does it say? federal employees cannot get a raise unless the private sector gets a raise. we are precluded from getting a raise unless the private sector gets a raise. what does it further say? that the private sector which is the economic cost index, by the way, in case you want to know exactly what the statistic

is says we are going to take a half a point less. so what have you done? in this bill. unnecessarily. because you are going to freeze their salary for the third year in a row. and simpson-bowles said do it for three. but they said everybody ought to share. we only get $1 trillion in revenues. $1 trillion in cuts. everybody. one more minute, but nobody but federal employees. nobody. is targeted in this bill other than federal employees. you can tell i'm angry about that because that's not fair. and that's not how you want to treat our employees, america's employees. america's public servants we call them. we ought to stop dissing them. we ought to stop demagoguing

them. we ought to stop using bureaucrat as an epithet. america needs them. i'll have some other things to say in a few minutes, madam speaker. but we ought not to walk away from our federal employees any more than we ought to walk away from those 160 million people who need this tax cut or walk away from those 2.4 million who need that unemployment insurance. or walk away as we have from the doctors who need certainty, long-term, not for 10 months, but long term. i reserve the balance of my time. the speaker pro tempore: >> the compromise pass in the house and passed in the senate. next we will take a live to everett, washington, at the

boeing facility. this is where they build the new 787 dreamliners. president washington is here to talk about jobs in this manufacturing plant. the president is expected shortly. he is the first president since clinton to visit the area and visit the boeing facility. this is live on c-span. >> you know the president has been very supportive of u.s. manufacturing's and the boeing company. there is one branch of the government that we cannot do business without, and that is the xm bank. fred i think you are here somewhere. 85% of our backlog is made up of international orders, and what wm bank does is it provides

financing so we have a level playing field around the world and they have helped us win. there is tremendous demand for airplanes, and there is a tremendous demand because of the market but moreover because we do build the most capable airplanes in the world. right now our backlog is 4000 airplanes, and at current rates that is seven years' worth of production, and we will increase our production by 40% over the next three years. here at the boeing co. we have hired 13,000 new employees over the last year, and our supply chain supports 250,000 jobs. [applause] i think the reason we win is because we are building

tomorrow's airplanes today. that is something competition cannot say, and it is because of american technology, innovation, and determination. i know this team in front of me knows how hard this airplane was to build, but i think this effort is worth the wait. this is truly the first new airplane of the 21st century. that dreamliners has changed how people travel. this is the first departure since first707 50 years ago. innovation and hard work does not guarantee success. is about having a skilled workforce, and we have the best engineers, machinists, and mechanics and the world. [applause] we also need very good and strong partners in government, business, and education to help

us compete, and we get that here in the state of washington. i cannot think of a more exciting time to be in this business or a better time for america to lead this industry into the second century of flight. i am pleased to introduce my boss jim mcnerny. jim took over this job in 2005 and he has been relentless tried to push for profitable growth. our exports have doubled under his leadership. he is a great leader, and that was recognized by the president in 2010 when he was asked to be the chairman of the export council. jim and the company were doing everything we can to help double those exports which your support. it is my pleasure to introduce

now the leader of the best and largest aerospace company in the world, and also america's largest exporter, jim mcnerny. [applause] >> thanks, jim. good to see everybody. governor nice to see you too and if i start naming names -- tom, i will -- i see jerry. great to see you again. it is great to be here with all the employees. a gracious introduction. i have not given him his personnel review for the year yet. [laughter] lots of special guests from business government, and labor, to show our president a flagship example of american

innovation in a factory that exports 8 out of every 10 airplanes it builds, and a talented team of engineers and other workers responsible for the $26 billion in u.s. exports in 2011 and the hundreds of thousands of american jobs those exports create. innovation and productivity of the american worker has long been our country's and our company's competitive advantage in global markets. in aerospace and in particular, it is one of america's great strategic assets and most globally competitive industries. as all of you know, it takes a huge talented team to bring an extraordinary innovation like the 878 dreamliner to live, and

i salute you for your accomplishments. [applause] and while their bosses in the building, i would like to recognize some other teams who contributed to our success. u.s. government agencies that support how we develop test, build, the liver and sell great boeing airplanes, and that includes the faa for enabling production systems and aircraft certification, the commerce and state departments for supporting international sales and export control process these, the office of the u.s. trade representative for ensuring a level international playing field, free of market distortions like government.

we all know how are our competitors find their new airplanes. and the u.s. export-import bank. the chairman is with us today for helping valued customers purchase are u.s.-built airplanes rather than our competitors' airplanes built somewhere else. [applause] would all be joined me in a round of applause and thanking these agencies for their contributions in supporting the innovation that is bowling. now i am going to stop because we have a main yvette, and it is about start. without further ado, let's get on to the main e event. [applause]

>> we are waiting for president obama. he is here at the boeing plant in everett washington, the location of the manufacturing of the boeing 787 dreamliner. >> please welcome 787 quality inspector kathleen eubank. [applause]

>> hello. i would like to welcome everybody to the boeing assembly plant here in everett, washington. my name is cass thkathleen eubank and i am a mechanic on the 787 dreamliner. i was born in seattle and had been married to my husband and have raised our daughters. i have been working at the boeing for five years and has been a dream and a wonderful reality. i'm proud to work for boeing and feel fortunate to build the safest and highest quality commercial aircraft here in washington. as you can see the dream liner is a top-of-the-line aircraft,

and soon you will see them taking off and touching down all around the world. i am honored president obama came to boeing to discuss the importance of american manufacturing, and it has been a dream to work in a manufacturing company with the president who supports the technological and economic contributions we make to this country. and the reality is this is the most exciting introduction ever made -- i will ever make. please join me in welcoming the president of the united states, barack obama. ["hail to the cheief" plays]

♪ >> thank you everybody. thank you. hello, everett.

it is great to be in washington -- not washington, d.c. -- in washington state and it is great to be here at boeing. i want to begin by first of all thinking kathleen for that wonderful introduction. we were talking a little bit and she is a pretty good representative of boeing workers. kathleen told me i had a motto every day -- nobody will outwork me, and that is a pretty good model for polling, but it is a pretty good model for america so give kathleen a pretty big round of applause. [applause] i have been told we are standing in the biggest building in the world so big you could

fit disneyland inside. your heating bills must be crazy. [laughter] i want to thank jim and jim for hosting us here today. given a big round of applause. -- give them a big round of applause. your machine this leadership, tom. rich tom and tom are here. one of the finest governors in the country is in the house. and i want to thank the mayor of

everett for having us here today. i want to thank all of you for also giving me a pretty smooth ride. some of you may know air force one was built right here in everett 25 years ago. in fact i met one of my guys that i met during the two were -- tour worked on the plane. i told him he did a pretty good job. it is flying smith. i get to see your handiwork in action every single day. but as wonderful as it is to fly air force one and in this wonderful, it is hard not to be amazed by it dreamliner.

i noticed this one is going to united, one of our outstanding carriers, and i have to mention that because i'm from chicago so i have to give a few extra props. this is the first commercial airplane to be made with 50% composite materials. it is lighter, faster, it is more fuel efficient than any airplane in its class. and it looks cool. [laughter] -- [applause] the dreamliner is the plan of the future. and by building it here bowling is taking advantage of a huge opportunity -- -- boein taking advantage of a huge opportunity to bring manufacturing back to the united states of america.

[applause] we know the last few decades have not been easy for manufacturing. new tock -- new technologies have made businesses more efficient and productive, and that is a good thing. that is what raises our standards of living. it means we can get better products for less. that also means that companies need fewer workers to make the same amount of products than they used to, and technology makes it easier for companies to set up shop and hire workers anywhere where there is an internet connection. so the result has been this transition process that has been incredibly painful for a lot of families and a lot of communities. a lot of communities that used to rely on factory jobs -- they saw those shrink and get shipped off overseas. too many factories where they

thought they had retired left home. to many jobs that provided a steady stable life, a middle- class life for people got shipped overseas. the hard truth is a lot of those jobs are not going to come back because of these increased efficiencies. in a global economy some companies are always gone to find it more profitable to pick up a new business in another part of the world. that is just the nature of the global economy. but that does not mean that we have got to just sit there and settle for a lesser future. i do not accept that idea, you do not accept that idea, america is a place where we can always do something to create new jobs and new opportunities and new manufacturing and new security for the middle-class, and that is why i am here today. that is our job. that is what we're going to do together. [applause]

just today we took an important short-term step to strengthen our economy. just before we got here, congress did the right thing and voted to make sure that taxes would not go on middle-class families at the end of this month. [applause] connors also agreed to extend unemployment insurance -- congress also agreed to extend unemployment insurance for millions of americans. i am going to signed this bill right away when i get home. you guys may remember this middle-class tax cut is of the proposed in my jobs bill back in september, and because you kept the pressure on congress, because you reminded people what it means to have 40 bucks taken out of your paycheck every week, it got done. this is a big deal, and i want

to thank the members of congress for listening to the voices of the american people. it is amazing when congress focuses on the right thing in stead of plankolitics. this is a good example, and congress should take pride in it. the payroll tax cut is just a start. if we want middle-class families to get ahead have got to deal with a set of economic challenges that have existed before this recession hit, and we have a choice for now. we can either settle for a country where a few people do really well and everybody else is struggling, or we can restore an economy where everybody gets a fair shot and everybody does their fair share, and everybody plays by the same set of roles, from washington to wall street to main street. everybody is doing their part. [applause]

we are still recovering from one of the worst economic crises in three generations, the worst in our lifetimes, for most of us, and we have a long way to go to make sure everybody who wants a job can find one and everybody -- and every family can retain that sense of the security that was slipping away before the recession hit. but the tide is turning. the tide is beginning to turn our way. over the last 23 months, businesses have created a 3.7 million new jobs, and american manufacturers, are hiring since thfirst1990 and the american odyssey -- auto industry is coming back, and that is what we can look for a promising future, and boeing is an example of that.

to keep it going to last thing we can afford is go back to that very same policies that got us into this mess in the first place. [applause] we cannot go backwards. we got to go fords. we cannot go back to an economy that was weakened by outsourcing and phony financial profits. i want us to make something, i want us to sell stuff. in the state of the union i outlined a blueprint for an economy that is built last that has a strong foundation, an economy based on the american manufacturing, american know- how, american-made energy, and that values that made america great, the values that kathleen talked-about -- hard work and fair play and shared responsibility. that is what america is about. that blueprint starts with

american manufacturing. it starts with companies like this one. a lot of people say well, there are going to be fewer manufacturing jobs than there were in the past. i already said we are more efficient now. wheeze to take at thousand people -- we used to take a thousand people to make something that only to hundred now. we want to make sure we are promoting service industries as well but manufacturing has a special place in america. when we make stuff, we are selling stuff. that creates jobs beyond just this plant. it raises standards of living for everybody. here at boeing, business is booming. booming. last year, orders for commercial aircraft rose by more than 50%. and to meet that demand, boeing

hired 13,000 workers all across america, including 5000 right here in everett. [applause] now the biggest challenge is how to turn out planes fast enough. that is a high-class problem to have. this company is a great example of what american manufacturing can do in a way that nobody else in the world can do it. and the impact of your success, as i said, goes beyond the walls of this plant. every dreamliners rolls off the assembly line here supports thousands of jobs in different industries all across the country. parts of the fuselage are america -- are manufactured in south carolina. wing edges come from oklahoma. engines assembled in ohio.

tail fins come from right down the road. the people in every one of these communities, some of whom are here today, are benefiting from the work that you do. all thoseall those workers -- they spend money at the local store. they go to restaurants, so the service economy does better because you are doing well. what is happening here in everett can happen in other industries. it can happen not just here but in cleveland and pittsburgh and raleigh. we cannot bring every job that. anybody who says we can -- they are not telling you the truth. but right now, it is getting more expensive to do business in places like china. meanwhile, american workers have never been more productive, and

companies like boeing are finding out that even when we cannot make things faster or cheaper than china, we can make them better. our quality can be higher, and that is what america is about. that is how we are going to compete. [applause] during the state of the union, it issued a challenge to americans. i said -- ask yourselves what you can do to bring and create jobs here in this country, and your country will do everything we can to help you succeed. i'm encouraged we are actually seeing a number of companies large and small, domestic, but even some foreign companies recognizing that we will open new facilities and create new jobs in america. this is a good place to work. this is a good place to be. our job as a nation is to make it easier for more of these

companies to do the right thing. that starts with our tax code. right now, companies get tax breaks for moving jobs and companies overseas. meanwhile, companies that choose to stay in america get hit with one of the highest tax rates in the world. that does not make any sense. my message to congress is -- what are we waiting for? let's get this done right now. let's make some changes to the tax code. [applause] and let's follow some simple rules. first, if you are a business that wants to outsource jobs, that is your choice, but you should not get a tax deduction for doing it. that money should be used to cover moving expenses for companies that are deciding to bring jobs back home. that is who should be getting tax breaks. [applause]

second, no american company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. my attitude is every multinational company should have to pay a basic minimum tax. you should not have an advantage by building a plant over there over somebody who is investing here at hiring american workers. and every penny of that minimum tax should go towards lowering taxes for companies like boeing that choose to stay and higher here in the united states of america -- that choose to stay and hire here. 3, if you are an american manufacturer, you should get a tax cut, and if you are high- tech, we should double what you get for making your product year. finally, if you want to relocate in a community that has been hard hit by factories leaving town then you should get help financing that new plant or

financing that equipment or training for new workers. it is time to stop rewarding companies that ship jobs overseas. reward companies that are creating jobs right here in the united states of america. congress needs to send me these tax reforms. i will sign them right away. [applause] another thing we are doing to support american jobs is making it easier for businesses like boeing to sell their products all over the world. two years ago, i set a goal of doubling u.s. exports in five years. we are on track to meet that goal. we are actually ahead of schedule. last november when i was in indonesia, boeing announced a deal with the help of the export/import bank to sell more than 200 planes to one of the fastest growing airlines in the world. boeing is one of the largest

exporters in america. this was one of the biggest deals boeing had ever done. over the years, it will help support thousands of american jobs, including jobs here in everett. i will go anywhere in the world to open up new markets for american products, and, by the way, i will not stand by when our competitors do not play by the rules. [applause] that is why i directed my administration to create and enforcement unit that just has one job -- investigating unfair trade practices with customers like china or places like europe. that is why it is so important

for congress to reauthorize the export/import bank. this bank is led by burton, who is right here, out here working with j to help companies like this one sell products. it also helps small businesses. today, the bank will be helping a new program help small businesses get the financing they need to sell more products overseas. american workers, you guys folks like kathleen -- you are the most productive on earth. you can compete with anybody.

you will outwork anybody as long as the playing field is level. you can compete with any worker anywhere, anytime in china, europe, it does not matter. if we have a level playing field, america will always win because we have the best workers. [applause] it is also because we have always believed in the power of innovation. innovation requires basic research. look at this plane. this plane was first designed virtually using the same technology that was developed by nasa. government research helped create this plane. i was in there fooling around with those windows where you press them and made them on their own -- and they dimm on

their own. i kept pressing the button. and the displays in the cockpit. they are projected on the windshield so pilots do not have to look down at their instruments. they can maintain their line of sight even as they are getting all these readings. some of the most advanced work was done by engineers down in huntsville, alabama, who used to work on the international space station. their expertise, a lot of those ideas, came out of government research. we have got to support this kind of cutting edge research. we need to maintain our innovative edge so that jobs and industries take root right here in the united states, not some place else. [applause] so everett, if we want to build an economy that lasts that is

strong, that has a strong foundation, that helps families get into the middle class and stay in the middle class, we have got to do everything we can to strengthen american manufacturing. we have to make sure we are making it easier for companies like boeing to create jobs here at home and sell our products abroad. we have to keep on investing in american-made energy and keep training american workers. above all, we have got to renew the ballot -- redo the values that have always made this country great -- hard work, fair play, shared responsibility. these are not democratic values or republican values. these are american values. [applause] they have seen us through some tough challenges but we have always emerged stronger because of these american values. we're going to come out stronger than before this time as well,

and i know it because of the people who are here. in december 2009 the first dreamliner took off on its maiden flight right here in everett. some of you were probably out there seeing it. it was a cold, windy day. that did not stop 13,000 employees from coming out and seeing what they had built seeing the product of all their hard work suddenly filling the skies. one of these people was sharon o'hara. there is sharon right there. [applause] sharon works as an executive office administrator for the leaders of the dreamliner team. executive assistant means basically you are doing all the work. [laughter]

some of you may know that sharon has been undergoing treatment for cancer recently. she has got her own battle, but her doctors recently told her she is healthy enough to come back to work. that is worth applauding. [applause] sharon, there are a lot of people who are happy to see you back at work. [applause] and i was hearing about this. as sharon tells the story about watching the first plane lift gently off the runway just the way it was designed to do, she thought about everything that had gone into making this day possible -- all the challenges, all the setbacks, the thousands of hours of brain power and manpower and womanpower.

[applause] and what sharon says is "i had goose bumps and tears. we said we would do it, and we did. that is a pretty good model. -- and we did." that is a pretty good model. you said you would do it and you did. that is the spirit we need right now. in this country, we do not give up, even when times are tough. we look out for one another. we reached for new opportunities. we pull each other up. we stay focused on the horizon. that is who we are. that is who we have always been. if we work together right now with common purpose and common effort, i have no doubt we will build an economy that lasts, and we will remind the world just why it is the united states of

america is the greatest country on earth. we said it. we will do it. god bless you. god bless the united states. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> president obama also has three fund-raising events in the seattle area before heading back to washington. the president's campaign raised $29 million in january. back in washington today, congress finished up work. the house and senate both passing the conference report which extends the payroll tax cut and long-term unemployment benefits through the end of the year passed the house and senate, and they are out for the presidents' day recess. meanwhile, a 29-year-old man was arrested by the fbi knew the u.s. capitol today while reportedly planning to detonate what police said he thought were live explosives. the justice department's spokesman said the suspect has been closely monitored by law enforcement and the public was not in danger. >> live saturday from the savannah book festival. coverage starts at 9:30 easton tom clavin, followed by carl --

karl marlantes on what it is like to go to war. at 1:30, the changing israeli- palestinian conflict. and at 5:15, the rise and fall of the comanches. part of a three-day presidents' day weekend on c-span2. in 1966, julian bond was prevented from taking his elected seat after state representatives boded 184-12 not to see him do to his stance against the vietnam war. his appeal went to the u.s. supreme court. >> i went to the court to hear the argument. i was sitting in the court just behind the bar with the lawyers in front of me, and i was sitting next to my lawyers

partner, and the attorney general of georgia was making arguments that georgia had a right to throw me out because i had said things that were treasonous and seditious, and i think it was judge white said tim, "is this all you have? you came all the way up here and this is all you have?" >> discover more about african- american history during black history month on american history tv and online at the c- span video library. search and share from over 25 years of c-span programming. >> we have a country where millions of innocent people have had to go to prison. they have put bars on their own windows and bars on their own doors because we have abandoned their neighborhoods to crime.

i cannot live with that. are neighborhoods should be safe. children should be able to play in the streets, and you and i can fix that together. >> as candidates campaigned for president this year, we look back up 14 men who ran for office and lost. go to our website to see video of the contenders who had a lasting impact on american politics. >> i believe that the destiny of america is always savor in the hands of the people than in the conference rooms of any leak. [applause] -- of any elite. so let us give our country the chance to elect a government that will speak the truth, for this is a time for the truth in the life of this country. c-span.org/thecontenders. >> the president introduced his fiscal year 2012-2013 budget at the beginning of the week.

congress passed the payroll tax cut agreement in both the house and senate. we talked about the u.s. fiscal situation this morning with the president's former co-chair of the simpson-bowles commission. >> this is the book. people do not keep diaries now because lawyers tell them that it opens them up to all sorts of litigation possibilities. did you ever worry about that? >> i never worry about anything when i was in public office. never a word about the aarp or grover norquist or anybody. if you cannot be who you are and do what you need to do, you should not be in congress. the gentleman who just left, i have to admire him because there are a lot of senior staff who will not let their people, a program like this because they cannot last for an hour because they run out of brains. >> we have a lot of big issues to talk about, and we will do that.

let me ask you let me ask you about one aspect of your biography. before you became a of standing citizen, as a young man, you had some serious problems here there are some folks here who have either had similar situations in their own families or have kids that they worry about. . you believe in the redemption is power of life. talk about how you move from a troubled teenager could and young manhood into being the person you are today. guest: i think i was rebellious. i came from a great loving family and mother and father at that live to be 95 and 93 and a brother who is as close as kenbei. i did not like authority.

-- who is as close as can be. i was involved in what they would call arson today. there was an old shack with booze bottles and we torched it. host: and it was on federal property. guest: i was on a federal probation for shooting mailboxes. then i did get sloshed on night in laramie. my mother would always cry and i knew that meant i did something importunes. when the old man cried and gave the old lament, "where have we failed?" it is stupid.

it is dumb, savage, out-of- body stupidity. i wrote the amicus brief in the sentencing of a juvenile to life at the a job14 16 for a felong -- at the age of 14, 16. i get letters from guys saying, thanks i think i have a chance to get out. i am 40 now. i killed a guy. when you're 50 and you're working in the pen or take ged or what, you have to have a chance. host: one other story. this is a photograph with you

and your two have the most interesting chance meeting as a young man and became good friends. guest: that was quite a story. norman mineta was transported to a pile of sagebrush in wyoming in the relocation senate. there were 10 of them. his family was sent there. the scoutmaster said will co-op to the jap camp -- that's what it was called -- the scoutmaster said we will go out to the jap camp. they got barbwire all around it and guard towersr and machine

guns in the tower. this, said these are embarrassing citizens -- the scoutmaster said these are embarrassing. host: how old was he? guest: 12. we were both 12. we read the same books. we did tied the knot send merit badges -- we tied the knot and did merit badges. we dug a trench. he said i kept him up. he is one of the dearest of my friends. he's a democrat. i watched him. we came to congress together.

he and his wife and my wife, they have given up on us. we break our glasses and kiss each other on the head. he is a special guy. host: he was in an internment camp and went on to be a public servant. guest: he didn't have any bitterness at all. he was like nelson mandela. he came out and there was no bitterness. when i was teaching at harvard oni had norm come up. he said, get in the game. he's an inspiration for his people, the japanese americans. we both help to setup a learning and interpreting the center. $5.2 million.

host: federal dollars? guest: no. the gave all tent camps $35 million and split up to restore the camps to show the american people how that happened and how to avoid it happening again. host: this is the book. it is called "shooting from the lip." a lifetime of public service and as early roots in wyoming. we'll turn to issues. guest: i do not get a nickel from the book. it is a great book. it was the author who made the contract. all the royalties go to him. i ain't making a nickle. host: we been talking about the

compromise that congress seems to have struck, the extension of unemployment benefits and to continue the payroll tax cuts. the republicans said the $100,000 did not have to be paid for and would contribute to the deficit. what do you think? guest: you cannot keep doing this. when will a congress is something with guts. erskine bowles and i go around the country. give us an hour. we do not do bs. we take any question on any subject and we get a standing ovation. people are thirsting for

somebody to tell that a truth. where is the aarp in this baby? i had a hearing when i was in congress. i dragged the mam in. i said, what do you do with the money? they said all their existence of their money, and never touched the precious life stream of social security. the precious life stream of social security is the payroll tax cuts. i have said, are there any pictures in here or just marketers? if you're out there today, tell us what you think when you watch the sacred flow of money to the system, the payroll tax getting off balance from 6-2 to 4.2.

eventually it will be put back. you have to borrow the money from the feds to do it. when you put it back, it will be called a tax increase and grover norquist will call it a tax increase and 95% of the republicans will be terrified. what can grover norquist do to you? he can defeat for reelection or play a primary opponent against you. if that means more to the your country and patriotism, you should not be in congress. host: first call is from montana. this is gerald, a democrat. caller: good morning. what a unique opportunity. god bless you.

you have in your in box a 2.5% solution. this has to do with the gse. congressional members and committees were distributed this week and the rest of the folks are being distributed next week because of a difference in mailing. can i get you to say read the one-page letter? host: he has a solution for how to address this. you probably get a lot of these. guest: i do not hear well. i did not ascribe to those kinds of things. i'm a guy that's never signs a petition. host: do you read suggestions from people? guest: i never throw anything away.

i read them all. we don't have a staff. we have some moment of truth projects and people that help and the research. if you'll send me that, i will read that. host: next call is from wyoming. this is ray a republican. caller: hello. guest: ray is an old pal. what are you up to? caller: not much. i was pleased to see that you are going to be on c-span this morning. i want to tell the listeners what a great guy you are. we crossed swords in one campaign and you were my honoring german in 2008.

it wasn't a good year for republicans but we -fun- you were my honor chairman. guest: you have guts. you are a real conservative. people hear you and they enjoy you. it was just one of those years. you laid yourself on the line. i did put my foot in my mouth. i think of the many times i got my foot in my mouth. i have a 16 shoe. host: he tell the story about the energy on the debate which led to a bill that has your name, since in-mazzolmpson-missoli. we didn't have much material

from 1986, but we have a clip from ron reagan's 1984 debate we talked about that. [video clip] >> we supported the bill strongly and the bill that came out of the senate. it is truitt our borders are out of control -- it is true our borders are under control. i supported this bill. i believe in the idea of amnesty for those who have put down roots even though they may have entered illegally. host: we're having this same debate in this country. guest: you talk about my diary. the reagan diary is a great book and a great thrill for me to see how many times i was

mentioned in his diary, because i love that guy. all through the work there were guys trying to kill it both parties. i would go right to ronald reagan. he would say, i'm still with you. the bill did not work like it should because the right and left said, wait a minute. they have a more secure identifier and that is in national id card. when you get that object rising in the eastern sky, you are in deep trouble. the lefties are calling it a national id card. it did not work. but we did not duck the word " and the statemnesty."

i haven't seen a single article about a national id. you couldn't put the burden on the employer unless you have a more secure identifier. about 3 million people came out of the dark. host: what about right now? guest: you want to be part of a country that is going on the hunt for 12 million people? i came from a county in 1963 where they went after people working in the beet fields and they called it operation weback. you either -- wetback. you either give people a legal status, pick their pocket for some scratch say they will be

in temporary status and then be a temporary resident or permanent resident. you have to give them a pathway. host: this comment from a viewer on twitter. guest: fine. do whatever you do down there. arizona is doing what they have to do in their mind. i do not have a single argument about that. the government has failed to do woit. so if they want to do something about illegal immigration in their own way, be my guest. i would not challenge that at all. host: pittsburg brendan. caller: thank you for taking my call. guest: i didn't.

she did. caller: i have two comments and a question. if that is okay. my first comment is if the democrats and republicans both take the oath of office to follow the document -- the constitution, then why is there such problems in the congress and the white house? my second comment, why is that everybody is talking about how good of a job president obama is doing when it just not too long ago he signed away our rights? thank you and i would like to hear your answer. guest: the constitution means many things. the language is beautiful and real. those have talked about the

strict construction of the constitution and those who talk about the fact that things have changed since those years. the supreme court has a different view of the constitution. every time there's a new supreme court there is a new view of the constitution. people say we need the constitutional amendment for a balanced budget. if they start that, there will open it up to other things. people have been waiting to change its constitution. when you say it is a living document, you are in trouble. it is living documents. i believe that. if we cannot stop saturday mail delivery without breaking down the country -- it is in the constitution mail. your second part about the president was what?

host: mdaa -- the ability to stacks' citizens without charges -- the ability to snatch citizen without charges. guest: lincoln the era of habeas corpus -- got rid of. host: presidential politics. mitt romney and the federal money. he sought aid for the olympics and massachusetts. he led an aggressive efforts to win federal aid for the struggling games. he requested millions for projects. he once boasted about his prowess for winning taxpayer

money. what do you think about the gop candidates? guest: republicans have a curious history. i voted for eisenhower when i was 21 years old. the people who represented taft thought ike was a pink-hole. i have been called everything. there isn't a single person in this campaign or sitting in the congress that did not pride themselves in bringing home the bacon. so what is new about that? "the washington post" wouldlike like to drill romney anyway. look at obama.

people say, how did we get here? you send people to congress to bring home the bacon. "go get me the highway. get me the stuff." he took a person with you that said, write it down. let me tell you, there ain't no more back to bring home. this country owes $6.2 trillion. people do not know what a trillion is. the big bang theory of the universe happens 13 billion, 600 million years ago. this is where we are. we're on a true victory of debt

and interest which is like greece and ireland and portugal and we were sitting your winning for the markets and up goes inflation and interest. host: i want to circle back to the caller whose questions we did not understand. the president signed that into law. this is a note from wikipedia. it does hearken to our question about norm mineta. this is what wikipedia says. "counterterrorism which deals with detention of persons the government expects with involvement in terrorism." that was what was on his mind. guest: i apologize to the

gentleman. i've lost track of the acronyms. i remember what gdp means. even though the wars in afghanistan and iraq are gone, there will keep people in guantanamo and the president said he did not want to do that. but in that circumstance, they feel if people are released they will go back and get back in their groups that were picked out of. they all have legal representation. there are many layers they go there on a pro bono basis to release them. do not know-- those things happen and they will continue to happen if you see a guy go back and make more bombs and do some tricks.

host: a republican is next. caller: i was so happy to hear mr. simpson say some things that i agree with that so many people did not anymore. people here more bad news than i hear good coming from the government. obama is doing is taking away our freedom. he also -- i heard last night over c-span that he has wanted to now take our nuclear weapons away. 80% of them and put them in jeopardy -- should other countries try to attack us. i did not like anything he is doing. he is not an american and i'm

very upset about it. if i could, i would have him impeached. host: do you believe the president is not an american? caller: no. host: you do not believe that? caller: he was born in indonesia. guest: i respectfully -- i was asked to be the co-chair of this national commission with erskine bowles. i've been accused of being a republican toadie covering president obama's fanny. he is an american. i think these birthers are way off the wall. give it up. give it a rest. turn off your television and just rest without watching 24/7

junk. there is notions thing as a 24/7 riot. people get all steamed up. it is absurd. i did not think we of ever elected a president who came into office to destroy this country. we should have a lighter hand about that because it makes no sense. host: we hear reference to the simpson-bowles commission work. the treasury secretary was on capitol yesterday and were several exchanges with reference to simpson-bowles. guest: we call it bowles- simpson. host: we went online and we saw

both ways. guest: intaglio what it is -- let me tell you hwatwhat it is. it was voted on after a year of work nearly and five democrats and five republicans and one independent voted for this package. 60% of the 1788 members. it stumbled to the weeds -- before the weeds because it was very specific. before they left, they said, do not tie our. grover norquist wonder did and he said ronald reagan is my hero. i said i know ronald reagan and

you know robbery in. i said ronald reagan raised taxes 11 times it is eight years. grover said, i know, i did not like that. i said, why do you think he did? he did it to make the country run. we never have less revenue to run this country since the korean war. 15.2% of gdp. you don't need to do a tax increase. cohen and dig into the pile of tax expenditures and jerk some of those babies out of there and go to any tax system. caller: you are one of my heroes. what do you consider to be full

employment in the united states? guest: i cannot play the game. think of the young people coming into the workforce. host: what percentage would you be comfortable with? guest: you can do the figures all day long, bounce them back and forth. pick a figure during reagan's time 4%. i was in congress 18 years and never saw a statistic that was correct about growth or unemployment. it is like health care. 10,000 people a day or turning 65. if you say the present unemployment is this and forget how many hundreds of thousands come into the employee circle because of their age and their skill, so i guess you would say

go back and look get a good year was it3% or 4% and grab it. caller: let's say 90% of the american people are employed. what the consumer would be the right thing for the social security tax to be. 14%? half and half? 15%? guest:if the 12 8%, would that help secure it -- if it went to 8% would that help social security? guest: please read our report as to what we do with social security. we're not balancing the budget

on the back of seniors. make a baby solvent for 75 years. raise the retirement age to 68. there are two ways -- reduced the benefits or increase the payroll tax. that was too simple. we give the aged, a kick up every year. raise the cost of -- change cpi. but you can't let what is going to happen in 2 the year036 yuou 2035 you will get a check for less and no one will challenge

what i just said. that's why it is going debate and i think that is cruel. host: there is a statement about the president's budget. here is what they have to say officially. "it focuses on deficit reduction." "it would achieve less deficit reduction would briefly save at a level that is already too high." what is the bottom line? guest: the president is using the figures. quit fiddling around with the baseline. the engine trick in washington -- we had a millionbucks bucks last

year and a cut us. this is notuts. he has used the war as savings -- overseas contingency operation -- we already did that. he cannot use that gimmick. it is a big gimmick. he cannot say that is a savings. it was already figured in. we knew the war was coming down. he can just keep using the gimmicks. the war was in there. you have to go big or go home. this is where we are right now. there are plenty of americans who say, get at it.

host: we have a question on twitter from jim. guest: a study who kept asking that on the commission -- urbdick durban. he is a gutsy guy. imagine how tough the was for him to support our proposal. harry reid said, you cannot vote for this because it talks about in reform and that's how we'll get power back. we will cite the never me -- we will say to not ever mess with the entitlement of medicare. host: will be the catastrophe that sets off -- guest: the money guys would get

tired. they care about money and they always take care of themselves. erskine bowles knows those people and he knows what they do. he says the market will call the shots. "we want more money for interest." at that point you will have a rise in the interest rates. forget ben bernanke. he is trying his best and he get crucified. when the market's response and inflation kicks in, guess who gets hers to worurt the worst? the little guy. that will be the chain -- the market will call the shots. host: don from oklahoma city.

caller: what would it take for him and erskine bowles to decide to run for president and vice president? we don't care which one gets first. just to get someone with some common sense. guest: i tell you, i want to be king. erskine bowles is one of the great guys. host: not going to happen? guest: king of the. a curmudgeon. host: this will be our last call from indiana. caller: good morning. i have a question on medicare. congress wants to cut medicare by 27%. i just kind of wonder about

this. when the insurance companies follow suit? medical cost has gone so high. wouldn't they cut their payments to the medical field by 27% also? host: that is the doc-fix. guest: they will never get rid of that. the biggest driver of this debt, is medicare. we said to take $400 billion. it doesn't matter if the call obamacare or else presleyvis presley-care. it doesn't matter. we take care of pre-existing conditions was somebody three years old, when a guy can get a heart operation and doesn't get

a bill. who's kidding who? you have to do tort reform. you have to tell hospitals to keep one set of books instead of two. host: the house is about to come and. do think our country's best days are ahead of us? guest: i think they are ahead of us. the american people are smarter than the politicians. the cd stupidity -- they see the stupidity. if you spend -- will borrow money to more and through the year. who is getting new/ who? host: that will be the last

word. this is all available on c- span's video library, c- span.org. lots more in the book, "shooting from the lip -- the life of senator al simpson." thank you for being at our table this morning. >> tomorrow on "washington journal." kim dixon said the tax proposals that the $3.80 trillion budget the president obama released earlier this week. and lawrence yun and discussing the current state of the housing market in light of the news that home builder confidence increased for the fifth consecutive month. then dennis cauchon on the recent analysis, examining a drop in spending, employee compensation, and infrastructure

upkeep. plus your e-mail and phone calls every day at 7:00 a.m. eastern. the house and senate are done for the week ended done through next week for the presidents' day recess after today. in both bodies pass in the conference report that extends the payroll tax cuts and long- term unemployment benefits through the end of this year. in the senate, 60-36. we will show you the floor debate this evening at 8:00 p.m. eastern. >> book tv live on saturday from the savannah book festival with tom clavin. followed at 10:45 by carl marlantes and scotty smiley on the first blind active-duty officer. greg mirey and jennifer

griffin on the palestinian conflict. who's afraid of post-blackness at 4:00, and the rise and fall of the comanche is part of a three-day presidents' day weekend on c-span's book tv. >> hi there i'm mark head of the lcv project. the local content vehicle we have three of them. the point is to collect programming outside of washington d.c.. we staff each one with one person a camera and a lap top editors that they can produce from the road. i want to get outside of washington d.c. and collect programming for all of our networks. the lcv's cities tour. what will do history programming

and historic sites, the other one will do book tv programming. the third one is community relations events. they are reported to us with the help of cable partners. all of this not only goes on the air, but its archived on the web site. what we are also doing is extensive social media. you will see us and partners on facebook foursquare, location based, telling people where we are going. you will see us on twitter as well. on the air on line, and social media as well. that is why it is important to get out of washington d.c.. we are making the commitment to getting outside the beltway. >> watch the local content vehicle's next stop in shreveport louisiana for book tv and american history tv.

>> earlier this week, president obama as budget director peter orszag gave comments on the future of the u.s. economy at the executives club of chicago. he serves as head of global banking for city group and talks about -- citigroup at talks about the economic downturn. this is about an hour. >> good afternoon, the was a flattering introduction. it is a huge pleasure to be back in chicago that happens to be my favorite american city. [applause] a round of applause for the. at. it is linked to very much to the financial times. thank you very much for having

me. it is my great honor to introduce the man that president barack obama called his propeller haead. -- head. it was a funny kind of complement. i am sure that you all agree that it is not an aspersion on his good looks. instead, it all makes sense when you realize that the propeller is inside his agile and compendious brain. it spins around very fast indeed. this man matched equations with larry summers and the white house. he has the regimesume -- the fantastic hamilton project at the brookings institution. director of the congressional budget office. president obama's budget director and the head of global banking data citigrou -- at

citigroup. there was ambition and scope that he brought to all of those jobs. he is one of the nation's leading experts on the budget and one of the leading experts on the microeconomics of health care. if you want to know how to bend the cost curve on your rising health insurance costs he is the man to talk to. peter is a self-confessed geek. it ishis public life is not something you can say about many geeks. many economists will bludgeon you with theories and numbers. when i read peter's columns, they connect the dots to a pattern that i realize i should have known was there but i did not see it until he showed it to me. please welcome me in the -- help

me in welcoming peter orszag. [applause] >> thank you robin. thank you for joining us this afternoon, i am delighted to be here with you. i was like to talk to you about a few overarching things that are affecting the u.s. economy. i hope to use an empirical basis to connect some dots. even when i tried to be empirical, the world does not always turn out as i expect. the most compelling affect of that is after having been confirmed in record time as the director of office and management and budget, assembling talked advisers to join me, i almost said the white house on fire since the war of 1812 -- on fire for the first time since the war of 1812. imagine this, it is a labyrinth

in quite draftee. i was working the first weekend in office. it was cold and no way to adjust the thermostat. so i noticed there wa,s, in the sellout barrette office, a fireplace in which there was a fire screen at the next to it were some fire tools. and next to that, some logs. that suggested an operational fireplace. [laughter] being empirical, i decided to test the proposition. i made sure that the smoke would go up the chimney the experiment worked perfectly. i moved the logs into the fireplace and i thought life was looking grand. the room is warming up nicely, five minutes and, i am getting work done. the fire alarm goes off.

the secret service is clear in the hallways and somewhat was surprised someone was telling a four letter word and it did not come from rahm emanuel. [laughter] i tried to tell them that there was a fire burning in my fireplace. they say, don't worry about it, please evacuate. there is an electrical fire on the fifth floor. the to the coffee shop across the street. the secret service came to collect me because i was the culprit. about five years earlier unbeknownst to the first secret service agent another part had capped the chimney as a security precaution. once it got to the top, and had nowhere to go except into a fifth floor conference room. my phone rings and i got a phone

call from my mother that said, i am so proud of you you are on television. [laughter] i say they don't have the sound don, do they? hopefully what i am about to talk to you about doesn't have such dire consequences as evacuating an entire white house complex my first weekend in office. we are at a very rare moment in the u.s. economic history. it is extraordinarily rare for an underlying tectonic plate shift to be affecting the economy at the same time that you have an overlay of a financial crisis. the only time that has happened in the last century was during the great depression when the economy was evolving from agriculture to manufacturing. that was a tectonic plate shift and we had an overlay of financial crisis.

it is an extraordinarily rare occurrence and we are living through it right now. the underlying tectonic plate shift can be expressed in lots of different ways. the way i like to look at it, one of the first thing is taught in macroeconomics is that the share of national and come that a cruise -- income that accruesa craccruessees -- it looks like it is going down. the reason is happening, we are living through a dramatic change in terms of a globalized labour market or increasingly globalized labour market. there are lots of estimates but

basically, effectively the labor supply has doubled to quadrupled at the same time the global capital supply has not. the result of that shift is a downward trajectory and labour's share of national income. if you want to understand some of the frustration that people are clearly expressing, one way of looking at that is that if the labour share had been constant instead of declining labor would be earning $500 billion-$750 billion a year greater. you have a lot of frustration but got a lot of policy prescription to address it. the manifestation again, one of them is the declining labor share.

the other is stagnant, real wages for many american workers. this chart shows you what is happening to the worker at the fiftieth percentile, right in the middle of the wage distribution of the united states. the red line shows you that those working full time year round, their earnings have been flat. once you include the people that don't have full-time work on the blue line, if anything, there has been some decline. it has been shown in family income as well. the bottom line is for married couples right at the fiftieth percentile where there is only one spouse working. and not surprisingly, given earnings have been flat, our earnings distribution family income has been flat if there is only one worker. the reason that we have had some

modest uplifted median income, the top line, is solely because it is increasingly likely that both spouses work. that is the underlying tectonics' plates shifted being driven not only by technological change that we can discuss in addition but transportation costs and a globalized labor pool that is causing a significant shift. i also mentioned that to date, it has affected those up to the seventy fifth percentile disproportionately. i strongly suspect that it is reaching out further into the income distribution. anything that can be digitized is subject to the same force. it opens up a series of other occupations and skill sets relative to the effects that were primarily felt in the past. what about the overlay of the surface waves we have been living through?

one way of looking at that is to examine total private-sector borrowing. in the united states, it reached a 30% of gdp in 2007. in 2009, is m wasinus -- it was minus 15% of gdp. it would count as economic trauma under any definition of that term. the result has been, as with most experiences with other countries have suggested a sluggish recovery. it is fundamentally different to a downturn caused by excess inventory, the central bank tries towring inflation out of the economy -- trying to wring inflation out of the economy. is hard slog. it takes time to deleverage.

it has the housing sector feeding on to a weak economy and back on the housing sector. it takes time to work its way through. that is what has been happening in the united states. this is the share of the population that are working. you can see it falls off a cliff at the same time the total private sector borrowing, the financial crisis hit. the key thing it has not come back. it has remained at a subdued level for the past two or three years. this is fundamentally different from other recent downturns. we're the red line there. the one that falls that doesn't go anywhere. the other recent downturns are of less severe in the collapse of employment to population ratio or the share of the population working and they

tend to come back more quickly. i would also note that every single formal macro econometric model from the federal reserve, private sector forecasts, they all got this wrong. in the beginning of 2009, they were suggesting a rapid and more v-shaped recovery. despite the fact that a financial crisis is different from other downturns. for example for this year, if you look at the forecast from the congressional budget office in january 2009, they were projecting an unemployment rate for 2012 of 6.8%. anyone willing to take that bet with me has to take the other side of if we are going to hit

6.8% or not this year. fundamentally, the nature of this l-shaped recovery was absent from every single formal model. the only people that got that right were basing their analysis on history or some other process, not a formal model. the lesson i take away from that, there are lots of people that will walk around with very precise estimates of a fundamentally on certain things and you have to pay attention to that -- of fundamentally uncertain things, and you have to pay attention to that uncertainty. frankly, we can still do -- i will give you one example. there is a lot of debate over whether the initial 2009 stimulus should have been a lot bigger. i did not think that would be legislatively possible, but let's say that congress would have voted for -- i wish i could

tell you it would have been the case. but a $1.20 trillion stimulus. this is a very temporary problem, it would have all been delivered in 2009 and early 2010 . 2010 would be stronger, but 2011 and 2012 would not have been that much different at all. what it misses is the time dimension. it would be far better to tide te things to the unemployment ratios of that they remain in force as long as the qualityeconomy is weak. there is false precision at the end of this year, that support will no longer be necessary. where are we in this hard slog? we are part of the way through it but not all of the way

through it. the only debate is if we are mostly or halfway through. this is one way of looking at that phenomenon. the share of vacant homes share of homes offered for sale that are vacant, it goes up following the financial crisis. it is on its way down, but we are depending on the estimates between 500,001 million more homes vacant and being offered for sale that under normal -- 500,000 and 1 million more homes vacant and being offered for sale than under normal conditions. so there is a tectonics' shift and surface waves to the financial crisis. with regard to the latter, it is a simpler set of solutions. my solution would be more support for the economy now

coupled with a deficit reduction that is enacted mal to take effect over time. -- enacted now to take effec tovert over time. with an elevated the unemployment rate, debt rises quickly. combine it with a deficit reduction that takes us back with delay. the underlying tectonic plate shift by contrast is much harder to respond to. typically, what we argue is that what we need to do is more education and better more investment in infrastructure. those will help, but this force is so powerful that we should not hold up the false hope that we will online dollar that. -- have to unwind all of that.

let's look at what is possible there. it is often not noticed that we have had up until those that were born in about 1950 or so, wind at our back from reaching educational attainment. the rate of increase has slowed dramatically. those born 1950 and averagfter educational attainment has risen, but not as fast as earlier generations. you can see earlier in this slide that breaks it down into different time periods between 1940 and 1960, it is mixing that a brit. the supply of college graduates is growing very rapidly. this is for the actual years,

sorry. today, there is much less rapid growth. there is still an increase in college enrollment, but it is rising at a slower rate than previously. that diminishes the underlying economic productivity growth. another effect of it is to raise the premium for college workers. since supply is growing less rapidly and at the same time, we have at the technological change in the underlying tectonics' played shift that raises the demand for college workers, you have a right not and how much college-educated workers are relative to those -- you have a run up on how much college- educated workers earn relative to those that are not. how do we get back on the path of rapid educational attainment? the answer will involve a lot more attention on lower and

middle income and romans and completion of college. -- enrollment and completion of college. that is where the most improvement is possible in the lowest 20%-40% of the population. there is a very steep gradient to college enrollment by income. some people argue that that is because low-income kids are not prepared for college and there is a significant component to which college preparation does vary by family income. one of the things that we should be disturbed by, take a look at this chart. this shows you what your scores were like in a standardized test in eighth grade and what the subsequent college enrollment rate was by family income.

what i want to draw attention to the lowest performers from high-income families are enrolling in college at the same rate as the highest performers from low-income families. that is a problem. we need to make sure that the highest performers, regardless in ofcome,of income, get the opportunity to go to college. it will help us, it is fair, and it will get us to rapidly rising educational attainment overtime. all of these forces have led to what is widely described and widely known as a rise of income inequality in the united states where the sluggish growth in the middle has occured at the same time as very rapid growth for the top 10% and top 1% over time in the united states. and the tax code has offset part

of that, but not much of it. the policy discussion often says, what are we going to do about this rather than other education. it will take time to move kids through college community colleges, it plays out over a law period -- along period of time . with regard to the tax code it works quickly but we should not expect it to be a full solution here or anywhere close to a full solution. most of the increase that has occurred has occurred with regard to pretax income. there is no plausible set of changes one can put into play where you can take this chart and offset any significant share of that over time. the tax code can help a bit but

it is not a full solution. we should not hold out false hope that this is going to change instantaneously. what are the implications of all this? there are some implications with regard to differential spending patterns. those of you in retail have undoubtedly noticed that high- end retail has been doing better than mid-tier and a discount retail over the past couple of years. another implication has to do with income mobility. we like to pretend there is a huge amount of mobility from one generation to the next in the united states. it has been more of a myth that we would like to believe. what a way of looking at that is this chart. if you were born into the bottom 20% of income distribution in the united states, there is a 40% chance

that as an adult, you are still in the lowest percentage of the distribution and only a 6% chance that you are in the talks. similarly, there is a 40% chance you will remain there as an adult and only a 9% chance that you decline to the bottom 20% as an adult. of changes in income inequality for income ability because those are conceptually different topics. there are some suggested evidence that does suggest that income inequality, if it goes up, mobility goes down. there has been recent controversy over this. this is a chart that alan krueger put up in a recent talk suggesting exactly that. as income inequality rises

mobility declines. that may be another implication. i think perhaps the most challenging of all the implications has to do with or political economy, which is where i am going to end. there has been a fundamental change in the congress that has occurred at exactly the same time that income inequality has gone up. i do not think these two are unrelated. let me try to illustrate, first, what has happened to the congress. this chart shows you the red distribution is republicans in the house. the blue is democrats. the key thing i want you to focus on is in the late 1960's there was a significant amount of overlap. the most liberal republicans and the most conservative democrats were voting together on a significant share of things. the model most of us have an

hour had about health policy should be made reflects that. -- we have in our head about policy should be made it reflects that. the middle is disappearing. starting in the late 1960's towards the late 1980's, it is dwindling. we are effectively two different parties united by a single congress with almost no moderate. especially since melissa is not there anymore. she was that one person sitting there in the middle. with far-reaching consequences. why is this happening? the punditry in what i call this corridor between new york in d.c. -- new york and d.c. suggest is proportionally that ideas gerrymandering. we have carved dick drea -- we a car to districts into spaghetti

areas. this causes a split. most of the political science literature suggests that is a very small part of what has been happening. if you can see that. i thought i had a slight, but i do not. if you can examine what has happened in the house versus the senate. the senate has gone up as much as the house. we have not redistricted st. -- state lines. that raises questions. the question that becomes, if it is not gerrymandering, it is it an inside development phenomena or does it reflect that? if it were gerrymandering, we would know how to fix it. if it is an inside the beltway phenomenon we know how to fix it. if it is reflecting us, much more difficult. there is a heated debate about whether it is inside the beltway or outside.

the best evidence says that there are 17 states with senators from different parties in the beltway. they're representing the same constituents in different ways. members of congress and centers have the flexibility or the operational room to polarize them selves. similarly, when a district splits parties, that a member of congress represents the same constituent in much different ways. if that is what were happening you would expect the majority of people, when asked if they are -- their member of congress is now too extreme a larger share of them would say yes. that has not happened. if it were an insight development phenomenon you would expect state legislatures to be polarizing less than the house of representatives. actually, two-thirds of the state legislatures have polarized more. all of which suggests to me a

significant component of this is hot. we are becoming more polarized as a people. the reason for that, i believe is that we are increasingly both virtually and physically surrounding ourselves with like- minded people. one of the most compelling pieces of findings or evidence from social psychology is if you put like-minded people together, the group becomes more extreme than any given individual when they started. because the people want to prove that that -- that they are the true member of the tribe. you make yourself reenforcing comments. virtually, this is happening to us now because we can choose our own that news sources. we only used to say newspapers. watch the evening news. now, we can select our own reality. my favorite example of that -- i have a twitter account. i do not tweet but i follow

people. about two or three months ago, i noticed that one of the people i was following was saying a lot of things i did not like. mostly because he was criticizing me. [laughter] i responded by un-following him. i realized he did not exist. i should check to make sure he is still out there saying the same things. he no longer occupied my brain space. that point of view was no longer present in my thought blago. similarly, physically, to a degree that i think it has been under appreciated, we are segregating ourselves by political parties. republicans are moving into their neighborhoods and democrats are doing the same. it is not only news and virtual reality, but our neighbors are increasingly of like-minded perspectives. let me show you a map that demonstrates that. this is a county -- this is

county data. one way of measuring whether the county is polarized is to examine whether it goes hard one way or the other in an election. this is from the mid-'70s. the black or gray areas are landslides for the democratic or republican candidate respectively. there is nothing special about the carder race in 1976. -- jimmy carter race in 1976. the key thing is, look at the best part of a country that is next. it is white. it does not landslide one way or the other. that is the '70s. that is today. applewhite is disappearing. there is retake the white is disappearing. a 30% of the population lives in more polarizing the states. you have to win presidential elections by appealing to those increasingly rare mixed

counties. therefore, run to the middle, if you will. i am no longer for that you can actually legislate there because the middle is gone. if that is right and it reflects us, we are going to face a central dilemma in our political economy. you run to the middle of the national election, you cannot legislate there. the only way you can at this point in any meaningful way is by dominating the political system, winning the white house, the house and 60 votes in the senate, and legislating based on one part of that distribution. if you do so in those rare circumstances, you will generate some much backlash that that dominance will then disappear. we will have a significant time of gridlock and divided government. historically, that would not be

that damaging because we still have enough overlap that you can legislate despite divided government. the key changes with the disappearance of moderates -- id is not clear to me that divided government lead to anything other than clear -- gridlock, which can be damaging. i will close with this thought. at about this time next year, we are going to face a fiscal trifecta that will make last summer look like child's play. that debt limit -- we will be bumping up against it once again. the tax cut from 2001 and 2003 will have expired or are scheduled to expire in full at the end of this year. at the same time, we have very large scheduled cuts in both the defense and non-defense spending, beyond what anyone believes as possible.

they're all happening at the same time. that historically, would have been a moment, because you have so many things that have to happen for big legislation to occur. instead of dealing with those rather unpleasant topics, might as well put some lipstick on it and go bigger on something. i suspect, however, that if we wind up with a divided government scenario that january, the prospects for that big legislation are much smaller than they should be because of the disappearance of moderates. again, thank you for having me. i am delighted to be here. melissa told me not to end on a bad note. [laughter] let me say three things i think can help alleviate some of these trends. the first is, the evidence is overwhelming that is causing the polarization. it is not being exposed to alternative points of view.

i think we all, as citizens, 0 it to the country to go out of our way -- oewwe it to the country to expose ourselves to things we would not normally agree with. the second thing that i think corporate leaders, in particular, can do to try to provide some relief on the tectonic plate shift -- i do not want to hold out anything. there are two things i think will help on underlying tectonic plate shifts. i mentioned education. when we mention that we typically talk about the institutions of higher education that are the crown jewels. the fact of the matter is, for most americans, far more important is the role of community colleges. i am particularly encouraged by what chicago is doing to try to

unite local employers and local community colleges. would it not be great -- this is already happening. would it not be great if basically a local employer said, indeed of years, these are the skills we need. kids who are going to diminish the college's new if they did a good job -- going to community colleges knew that if they did a good job, they would get a job. the firms get training and a skilled workforce. of the workers get -- the community college students get higher degrees of alliances that what they are studying is going to matter. that is what chicago is doing. i am going to watch carefully how that turns out because it is exactly the kind of thing that has to happen between the business community and local community colleges across the country. [applause] thank you.

then the final thing has to do with pushing even harder for value in health care. the reason is, most american workers do not realize how much their take-home pay is being reduced by the health care costs that businesses face. if the trajectory on health care costs were improved, take-home pay could rise more as a result. over the next five or 10 years we are on the cusp of a significant resolution possible in health care that involves information technology. it involves changing the way that providers are incentivize. i think united health and other insurers are doing a lot of useful things in moving towards a bundle payment and episodic

payment and other methodologies that move away from just paying for each particular service. that whole effort will not succeed unless the people who are in charge of collecting health plans and providing health care for their workers that is you, are forcefully behind it. i would urge you to read things and be exposed to things from a different point of view. continue to press what chicago is doing on community colleges and put your weight behind the effort to get more value out of health care because that will ultimately prove beneficial, not only for you, but for our -- for the workers across america. thank you very much. [applause] >> thank you very much for a

fascinating speech. we of arctic up some interesting questions. we have about 50 minutes to get through them. -- we already have some interesting questions. we have about 15 minutes to get through them. how much more will inequality wise, how much longer can the medium work? if you're a's business -- what can we do to face that world? >> i think it depends on what you mean by inequality. i suspect these forces have widened the gap between the 90th percentile and the 50th percentile. on a going forward basis that is not going to continue. the 90th percentile is going to be affected by the forces of globalization and technological change. it has not been as prevalent

over the past few decades. inequality will not continue rising there. it is in the 99.9%. the 90/50 ratio -- what is happening to the college graduate versus someone right in the middle of our earnings distribution. i am not sure it is going to continue. a professor like to ask his students, who do they think will earn more in the next 20 years it qualified plumber or a run- of-the-mill engineer? he has been surprised to hear that often more than half of the students picked the plumber. to the extent that the engineer skills are easier to digitize that may not be wrong. >> i guess you would interpret that -- >> thinks that are delivered in

person or that involve non- tradable services involving different -- involve a different dynamic than the triple. >> i am one of these people who is affected by digitization. >> there are now data mining software that can do a better job at analysis then what used to be a team of ph.d. economists 10 or 50 years ago. it is not only journalists. [laughter] >> and other thing you mentioned is, the falling labor share of the economy. more is going to capital and less is going to labor. the upside is that profits must be strong. if that continues and there -- how can you get businesses to

invest this huge amount of capital they have building up on their balance sheets? >> let us address that question. i think you are going to see investment -- there has been a fair amount of growth in investment at the short end. the stuff that depreciate rapidly. in the could finance software, that has been growing the past couple of years. -- in equipment and software, that has been growing the past couple of years. others have been hunkering down. the fact that ideas have been suggested me that -- the fact that it has happened, that suggests that there is macroeconomics uncertainty. of the world is an uncertain

place right now. that would make complete sense that if you are being driven by a concern about how the world is going to turn out, you make shorter-term investments because the cost of doing a longer-term one is larger. >> moving on to the budget issue. if the bush tax cuts on dividends and capital gains expired, the spending to sequester goes into effect. what does that do to the economy? what is your guess of what the outcome will be towards the end of the year? >> all of that will be something like a 4% of gdp fiscal contraction occurring at a time when i doubt the economy will be back on its feet. that would not be good. some deal will have to be done. the challenge i have is, i do not see -- what i was mentioning about the congress.

exactly how the deal happens, i do not see. until the election and see how that turns out. no one wants an economy that is still not fully back on its feet to be hit with a fiscal contraction of 5% of gdp. that would be undesirable. >> they will have six weeks or something to do i do? is that possible? >> ice -- i would be willing to bet that in order to get a deal done in a divided government scenario, you are going to need short-term extensions to purchase time for two months, as we have seen the congress to act when it cannot figure out how to resolve things before deadlines. or, we are going to have to go over the cusp and have all of this stuff expire in order to

force people together, which would be -- anyway. this time next year, there will be a lot of trauma one where or another. >> plenty to write about. [laughter] speaking of journalists in a recent book an article -- it pour -- it portrays your role as the anti-stimulus man. what is your response? >> i am called an especially tragic figure. [laughter] there are a whole variety of traps that one can fall into in terms of missing important distinctions. i have long been the savior of a couple of stimulus approaches. i just mentioned earlier in which you provide more stimulus now, but couple it with a long-

term deficit reduction. i think that is the right policy response and the legislative strategy. the debate describing these articles actually was between that couple stimulus, should we do more stimulus in and couple it with long-term deficit reduction or should we do naked stimulus? somehow, support for couples stimulus is being presented as anti-stimulus, which i do not understand. that treatment is often a sense of missing that very important point. i think coupled stimulus is the only thing that has a chance of making progress with the congress. in addition, you have to remember, this is late 2009, we were coming up against another debt limit increase. the thought you would go out with a stimulus only bill and no

long-term deficit reduction at all and then hope to raise the debt limit strike me as fanciful. not even planetary. >> moving on. i am going to keep throwing the statute. where do you invest your personal wealth? [laughter] >> i am in diversified, low-cost index funds, which are mostly global but are we to my home country. for no reason i think i can actually justify other then it feels safer. >> ok. [laughter] what are some ways to reduce health-care costs in the u.s.? >> there are basically four did approach to reducing health-care costs. you can reduce prices. reduce how much you pay doctors and hospitals. that is a very blunt and

quickly effective tool, but it is only blunt. it is not a long-term solution. for example, if all you did was to ratchet down prices in medicare and did not address the underlying quantity of services provided, you would create access problems for medicare beneficiaries, incentives to costs. if you cannot just bludgeon this through prices and have a long-term solution. that leads as to where the great debate is. it is a fault debate. how do you get a quantity of service provided? one approach -- these are presented as mutually exclusive. one approach is the consumer approach. people often do not have that much skin in the game. if they had more cautionary, they would be better consumers of health care. that can help. at the evidence from

experiments the united health has done suggests there is a benefit in terms of reducing costs. the problem is, it is not as big as you think. most of the consumer driven approach is to provide very -- third-party insurance. most health-care costs are in a high-cost cases. for example, you take medicare and you rankin by costs, the top 25% account for 80% of the cost. that brings us to the other category, which could work in concert with more cost sharing. this is focusing on provider value. in those high-cost cases why is it that some providers deliver health care in this way and others deliver it in that way? that involves changing the

information flow in terms of health information technology and the technological incentives. there are a whole series of changes. one thing that has not been remarked upon is, over the past couple of years, there has been a huge deceleration in health- care costs, both in this -- both in the commercial space and medicare. it is not just a blip on the screen. it has been going on for a few years. ideas have been disproportionately to medicare as it goes to the commercial space. -- it has been disproportionately medicare as it goes to the commercial space. i ask what has happened to medicare revenue. when i asked, i t was only up 2% year to date, which is dramatically lower than in the past. if you ask for the reason, the reason is the number of orientation -- the number of hospitalizations have been flat.

the number of readmission people who are discharged -- 20% are readmitted within 30 days. that has gone way down because they have put in a screen. if you look like you were at high risk, they put a team of doctors on you and it is working. if you want to know what is wrong with the financial incentives in our health-care system, that program is working. no one would voluntarily want to be readmitted to the hospital. the person who runs the hospital cannot afford to continue it because the doctors and nurses are expensive. more importantly, the hospital loses the revenue on it. there you go. >> see what i mean about him being good on health care? this is the last question, i am

afraid. the eurozone debt crisis -- how is it affecting the u.s.? how concerned or do that it can do us harm? >> -- how concerned are you that it can do us harm? >> 25% of exports go to europe. exports are still a modest share of overall u.s. economic activity. when you put those two things together, the direct impact are not massive. at second linkage is if financial contagion in the european banking system infected the u.s. financial system, that looks increasingly less likely. the european central bank has stepped in forcefully to backstop the financial institutions, at least, by providing three-year liquidity to them. also because u.s. financial institutions have had enough time and are trying vigorously to insulate themselves as much

as possible from that channel. your left with the third one which is the hardest to calibrate. it involves underlying uncertainty. there is hit to export. risk from in direct linkages through the financial system. more generally, we do not know exactly how this will turn out. i spent a lot of my time talking to ceos and you hear a lot of that. the macro uncertainty is causing you to pull back a little bit. one of the principal components of that uncertainty involves the european debt crisis. >> thank you very much. please be kind to us on your blue papers. [laughter] [applause] >> thank you. >> tomorrow, on "washington

journal," kim dixon looks at the tax proposals that president obama released earlier this week. then yun discusses the current state of the housing market. home builder confidence increased for the fifth consecutive month. after that correspondednt cauchon talks about the examination of the drop in employee compensation and infrastructure up keep in certain states. plus, your e-mails phone calls and tweets. "washington journal" is live tomorrow and every day at 7:00 a.m. eastern on c-span. >> in 1966, he was prevented from taking an elected seats in the state has. after a vote not to seek him due to the vietnam war, his appeal went to the u.s. supreme court.

>> i went to the court to hear the argument and i was sitting in a court just behind the bar with the lawyers in front of me. i was sitting next to my lawyer's partner. the attorney general of georgia was making an argument that georgia had a right to throw me out because i had said things that were treasonous. i think it was judge white who said, is this all you have? [laughter] you come all the way up here and this is all you have? i said, we are winning, are we not? >> discover more about african- american history during african- american history month. search and sherer from over 25 years of c-span programming at c-span.org/videolibrary. >> both chambers of congress were in session today and both

passed a conference report extended payroll tax cuts and unemployment benefits through 2012. the house passed the measure to 93 to 132. the senate 60 to 36. the bill goes to president obama for his signature. the house holds sessions next week so members can return to their districts for the president's day recess. the chamber gavels back-and- forth with this report on monday february 27 at 2:00 p.m. eastern. follow the house life here on c- span when members return. next, energy secretary steven chu testifies before the committee on president obama's 2013 budget request. the 3.8 trillion dollar package includes $27.2 billion for the energy department, a 3% increase from the 2012 budget. this is almost three hours.

ok let us get started. today, we have a hearing concerning the department of energy budget for fiscal year 2013. we welcome secretary chu to testify and present the budget to us today. the priorities laid out in the president's proposed budget reflects a strong commitment to clean energy and the increased security and economic benefits that made in america energy can achieve for us. for american innovation as well as manufacturing. in an overall budget request that seeks to provide sub -- a substantial government wide deficit reduction, i am pleased to see that we have a proposed

$-- 3.2% in the department of energy budget. this is an investment in the nation's energy future that will boost our economic growth and global competitiveness and protect the environment and allow the u.s. to continue important nuclear non- proliferation work. informed by the technology review, which we had a hearing on a couple of months ago, the department of energy's budget request cuts funding in core technology areas and provide resources for the most promising clean energy innovations. this is an important step towards a national energy policy that invests in critical energy priorities within the framework of a sustainable fiscal policy. the department of energy's budget supports a range of cutting edge technologies that will enable us to lead in the global race for clean energy.

increased investment in high compartment's -- high- performance computing increases understanding and development. it continued investments will support higher risk transformational energy projects. helping them to mature and attract non-governmental funding. support for solar and wind and geothermal biomass energy will further develop our portfolio of available energy sources and unable a transition to a cleaner technologies and me while funding for research on carbon captor and sequestration and methane gas hydrates and minimization of the impact of gas development will allow us to utilize a fossil fuel resources in a response to wall way. this budget also provides grid modernization issues reach a solution to grid modernization issues through an electrician's

innovation hub. this holds a promise of providing jobs for the future. it is important to recognize that the research and development programs that i mentioned here cannot fully meet the challenges of bringing new energy technologies to the commercial marketplace. the capital requirements to bring promising technologies from the laboratory to commercial scale are enormous. our competitors have figured idea. they're moving aggressively to gain an edge in clean energy technologies. we are trying to support domestic players in this race. id has occurred through the loan guarantee program. that is a proposal that was made as part of the 2005 energy

policy act. at its core, the loan guarantee program is intended to allow the government, in the case of new technology development and deployment, to take on risks that the private investor cannot. there was a report just published with recommendations for managing the program going forward. many of us are -- many of these are similar to approaches that we have incorporated into the clean energy legislation. we will be having a hearing on this report to when we return after this next week's recess. i will have some questions for the secretary about the report and the state of the loan

guarantee program when we get to questions. again, thank you mr. senator for coming. we look forward to your testimony. let me mention, before calling up our first speaker i appreciate the technical assistance that your staff provided in helping us develop the proposal for a clean energy standard. i hope we can introduce this legislation in a couple of weeks. the modeling that has been done in your department has been very helpful in helping us develop that bill. >> q. why, mr. chairman. secretary, good morning. welcome. -- thank you, mr. chairman. secretary, good morning. welcome. i was disappointed with the administration's overall request for fiscal year 2013. i think we all hoped and expected that the president

would lead the way by presenting a good plan to reduce our debt, grow our economy -- it was an opportunity to address the entitlement issue and balance the budget or this moving in that direction. instead, we have a document that, i believe, largely is a threat to our economy. last year's budget requirement to polis that riddled our tax cut, but this year proposes even more. it describes an economy built to last is propelled -- filled with proposals that cannot pass. unfortunately, i look at the energy budget and i think that this is clear within the energy policy as well. i can understand and certainly support many of the proposals that are within the goe budjet

-- budget. more money for geothermal research is a good thing. an emphasis on biofuels is worthy. but, i have some heartburn with the decision to reduce the funding for renewable water power. this is an issue that i hope we can discuss in the questions and answers after that. efforts that could unlock massive volumes of on conventional resources are again zeroed out. i am concerned by making the big ticket expensive that is tied to this budget. we have new and renewed tax credits. it has a billion dollars in a program. $6 billion for homes for efficiency programs. i clearly understand why people would want to fund all of those. i certainly have shown my

support in many of these areas but given the state of the federal budget, where we are, i would stress that now is the time to differentiate between those things that we might want to fund and those things that we need to fund. what the discretionary budget grows by over 3% in this request, adding all the programs and subsidies is going to nearly double our spending on energy. that concerns me. i am willing to support more spending in this area, but only if the revenues are derived from new and not existing productive. that is another problem with the budget. it to reunite -- reignite a fight that was -- has been waged for the past three years. taking steps to extract the domestic energy from our tremendous resource base, the administration has decided to try to extract $40 billion from the consumers of oil and gas and coal regardless of the

consequences that it could have for our energy supply, our economy, and our security. the president called for an all of the above approach to energy policy. i think that is certainly something i have embraced and i think most of our colleagues here have. i am not seeing that from -- i am not seeing that played out within the budget. i wonder whether the budget planners were working together with the president when he enunciated those words in his speech. i would like to see us get there. i appreciate you secretary. you try to make a very concerted effort in a difficult area during difficult times. thank you for being here. i look forward to yours speech. >> mr. chu take as much time as

you would like. >> thank you. thank you for the opportunity to discuss the fiscal year 13 -- fiscal year 2013 budget requests. i want to first begin by thanking the years of leadership. it has been a privilege to work and i continue to -- all look forward to our work together this year. economic growth, president obama has called for an all of the above strategy that develops every source of american energy. he wants to fuel our economy with domestic resources by increasing our ability to compete in the energy race. we are at risk of falling unless we deploy our domestic clean energy economy. our country faces a choice. we can create jobs, making and

exporting the energy technologies of tomorrow, or we can can see to leadership of other countries that are investing in these industries. as president obama said, clean energy standard are a vital step that congress can take. making the most of america's energy resources is a pillar of the president's economic blueprint that builds an economy that lasts. in the budget, he requests $27.2 billion. as guided by his vision, our 2011 strategic plan and our technology review supports leadership in clean energy technology science and innovation, and nuclear security and environmental cleanup. trillions of dollars will be invested in clean energy in the coming decades. to seize this opportunity, the budget requests investment in the research and deployment of energy technology.

decades ago, the energy department supported -- developed the technologies that allow us to tap into shale gas. investments can help advance technologies to help us find energy efficiency today. the budget request invest about $4 billion and our energy program. it advances progress in many areas. it helps reduce dependence on imported oil by developing next- generation biofuels advanced fuel efficiency technologies. the budget request invests $770 million in a nuclear energy program to help develop the next nuclear power technologies, including small modular reactors. this alliance with the recommendations of the commission on america's nuclear future.

as we move towards a sustainable future america's fossil fuel energy resources will play a key role in our energy system. at the request includes a $12 million -- that includes an initiative by the departments of energy, and the epa to understand and minimize the potential environmental health and safety impacts of natural gas development through hydraulic fraction. the budget also promotes american saving money. the american manufacturers cut costs and compete. to maximize our efforts the department is coordinating research and develop across our basic and applied research programs as well as rpe in areas including batteries and electric grid technologies. to encourage manufacturing the

president has called for extending proven tax incentives, including the production tax credit in the advanced energy manufacturing tax credit. as industry, congress, and the people make critical energy decisions, it is important that we adequately funded the information administration. competing in the new energy economy will require our country and all our resources to look at the forefront of science and technology. the budget includes $5 billion to support basic research that could lead to new discoveries and helps solve energy challenges. these funds support progress in basic energy science, advanced computing, and more. the budget requests supports energy frontier research centers, which aim to solve specific scientific problems.

so far, these research centers have published more than 1000 review papers and have filed more than 95 applications or patent invention disclosures. it supports the five existing energy innovation held and proposes a new hub. through these, we'll bring together our nation's top scientists and engineers to achieve energy goals. additionally, the budget request includes $350 million for rpe. rpe invest in high-risk high reward projects that are successful to create the foundation for entitling new industries. in addition to strengthening the economy, the budget request strengthen our security by providing $11.5 billion to the national security -- the

national nuclear security administration. as we began reductions, the science, technology, and -- engineering technologies will become even more important to sustain the u.s. nuclear deterrent. that is what the budget request includes $7.6 billion for weapons activities. it includes $1.1 billion to remove naval nuclear programs. additionally i do support work to prevent nuclear terrorism. that is what the president's top priorities. it will implement key nuclear security. finally, the budget requests $5.7 billion to continue progress cleaning up the nation's nuclear sites. the budget requests makes strategic investments to promote prosperity and security at the same time recognizing the fiscal challenges and cutting where we

can. we are committed to reforming our work efficiently and effectively. in countries -- countries in europe recognize the energy opportunity and are moving aggressively to lead. this is a race we can win. we must act with -- we must act quickly. thank you. i will be pleased to ask -- answer your questions. >> thank you. let me start with five minutes of questions. i am sure all members will have questions. from the news i gather that you visited the two new nuclear power plants that have been licensed in georgia. my understanding is that the loan guarantee program was come to some extent, involved in the development and -- development

of those two plans. i guess i would be interested in getting your perspective. i know we have had lots of hearings in congress on solyndra and the lost taxpayer dollars there. looking at the loan guarantee program, overall is it important for the country to maintain a loan guarantee program to assist with development and deployment of new technologies in the energy area? if so, how do you propose in this budget -- how does the administration propose we move forward with that? >> first, let me say that if you look at the loan guarantee program, over all it unleashes about $40 billion of investment in these industries.

in projects like the two new nuclear reactors being built. i t invest it -- it helped to measure and build cars that -- wonderful cars that could be sold worldwide. there are many aspects of this loan program which have really helped bring back a lot of what we were famous for a century. it is the deployment of many renewable energies. that loan program is continuing. we think those are worthy projects. going forward, we do see a need as part of an overall plan, to finance projects.

projects where you have technology that is very solid. one can deploy these with low risk. there are other -- that is one part. there are other parts that really could help drive it forward. there was a study completed about a month ago. what happens to those projections for 2012? they said, if we take a look at all forms of energy. -- they said, we looked at all forms of energy. if you have 10% finance charges for all of these forms of energy wind, today is within 10% of the cost of new gas.

we expect that to increase further. we also suspect solar to come down. this is all good news, but you need a financing mechanism even at 10% that what really tipped the balance. >> let me ask on a different issue. we had a very good hearing where the technology review was presented to us. the first of the reviews concluded -- does this budget reflect the same priority as that the technology review

identified? >> to a larger extent, yes. the review -- the first one in the history of the department of energy -- we wanted to step back and say a slightly different question than what are the things we should be funding, but what are the things we should fund where the taxpayer dollars will do the most good? if we find there are certain areas that the private sector is well invested in, we have to say, we should not be funding that. they have taken it and they are running with it. we did that with research in surreal gas -- shale gas. the industry did not want to touch it. the industry picked it up. that is the attitude we have in doing this. where can we put our dollars that will stimulate the research

and development to a point where the private sector starts to run with it? that energy review was very useful in helping us find out -- by pulling back and looking across all of our funding, are we putting the dollar is where we think they can do the most good? that is beginning to shape. we hope that the pentagon and state assets in long-term changes. energy investments are 70-year investment. they cannot be decided year to year. when you build a new gas plant you name it, these are long-term investments. >> thank you. >> thank you, mr. chairman. secretary, the chairman has asked you some questions about

the loan guarantee program. i appreciate the fact that we will be having a hearing when we return from the recess. i am one who believes that there is a useful will to be played in the deployment of our energy technologies and that the loan guarantee program can be helpful, but we need to get it right. we can work around your schedules, but will you make yourself available to come testify at the hearing when we are able to schedule one? >> there are several hearings. there is one in the house and one in the senate. i think -- if this committee wishes for me to come i will. >> i think it will be helpful. let me ask you about hydro power. this is one of those areas when we are talking about renewable

resources, i certainly classified hydropower as a renewable resource. i want to make sure that that is clear in our policies here. funding for hydropower is down 66% at the same time that all the other renewable accounts are slated for in increase. both you and the president have made statements supporting the growth of hydropower here in this country. but, i t really appears to me that we are leaving a hydropower behind in the budget. can you address that? >> i define hyder -- i divide hydropower. we have to make tough decisions. we do not anticipate any new d ams being built. one form is running with a record generation. we think that is environmentally compatible.

also turbines on existing dams built for flood control. that is feasible. that is a potential. those are areas which are -- based on a philosophy, should we invest -- we have diverted one research from winds. that is one class. the other of hydropower is connected devices. hyder power that tries to extract energy from tidal motions, things of that nature. we have a program we are investing in. we will continue to do that, but we feel in marine environments, while we continue to invest, we do not see these things taking

off. we hope they do. we hope these attempts look more promising. we will respond. that is the thinking we are going through. >> the concern is that the funding is pre-anemic inthis is something senator wyden and i have been asking about. let me ask about a budget, a $2 million increase in technologies, and it is my understanding is this effort would fund an initiative with epa and usgs to look at the impact of frankicking. the advisory committee reported

to us and had a pretty comprehensive report. they presented 20 recommendations on how any impacts can be mitigated. the question to you is, what was the flaw in that committee's report and recommendations you felt were insignificant and warranted a second investigation that we need to -- it is my understanding that the board's rendition are already finalized. most of their proposed directives fall on the states not on the federal side. why are we doing a second run on this? it raises some concern by some that there is an effort to find a smoking gun about bad news about fracking, and that is why we are trying to get a second

investigation. why has the funding increased? >> the committee you are referring to is this a -- is the subcommittee of the advisory board. it is -- first, that was an excellent report. if you look at the absence of the u.s. government, particularly the usgs and the department of energy, and the intent is, can we help drive the technology developed for the to help with the environmentally responsible fracking, so the risks that you can continue to mitigate risks to environmental impacts. the tunenor of the report is exactly that, in helping with

the technology. there is rapid advancement and what is happening in fracking. is a lot of recommendations to help as information clearing houses so industries can share best practices with each other. the intent of that was not another study to look around. the intent was as we helped bp stop an oil leak in the gulf of mexico, the intent is to work with industry to help improve practices when possible so we can extract this resource in an environmentally responsible way. >> i will follow up with you. my concern is it appears we are directing an additional $2 million for a follow-on study that i agreed was a pretty good

study. >> senator wyden. >> thank you, dr. chu. want to talk about natural gas pricing. i have been a supporter of natural gas. it has been a cleaner fossil fuel and a potential boon for american business, steel plastic, and our consumers. i believe there are essential questions that have to be addressed before our country starts allowing significant natural gas exports. you made some statements a few days ago that are troubling to me and i want to walk you through its. as you know, under the natural gas act, your department has an obligation to evaluate whether natural gas exports are in the public interest. you are in fact the regulator.

the comments that you made the other day suggest to me that you sort of made up your mind. you were quoted here as saying "exporting natural gas means what comes into the united states." that is not what we heard from our businesses like steel and chemical and plastics. they had representatives sitting where you are sitting the other day. a report came out after the energy information agency, indicating natural gas exports could increase prices by more than 50% and cost american industry and our natural gas customers as much as $43 billion. i am looking at the chart that estimates what we would be dealing with in terms of the applications offered now. it is about 13 billion cubic feet of natural gas exported per

day. that is what we're talking about. the applications exceed the amounts eia that study based on. they looked at about 12 billion cubic feet per day. i want to get your sense of how you are going to objectively look at this question, and i would like you to disabuse me of that theory that you have already made up your mind because i looked at that quotation coming from the recent meeting, and i said, it looks like dr. chu already made up his mind, and to me, for example 13 billion cubic feet of natural gas exported per day when 12 billion could raise prices 54% -- that would be a huge shock to the american economy. tell me how you are going to approach this issue, and particularly to give us a sense of how you are going to approach

it objectively and look at both sides. >> sure. the full quotation and i will predict -- pair free myself, the full quotation is certainly we do not want to see natural gas prices rise dramatically as we have seen in the past, because that has an appalling in effect. it creates great difficulties for businesses, for people who heat their homes with natural gas. and i said that we need to focus everybody's mind if we start to export natural gas, it looks like natural gas, if not done right, that could have that effect. there is another sign, because whenever we decide it has to be in the best public interest, and there is a flip side to this that we also have to consider, that it does create american jobs, and if the prices are kept moderate, then it does bring money in =to the united states

-- into the united states. right now the natural gas prices, over the last week or so they were $2, $2.50 per million cubic feet. eia is saying anywhere in the coming decade. we're hearing reports of gas extraction companies now pulling their rigs out, because prices are too low. so what we need to do -- first let me assure you my mind is not made up, and if you read the full quote -- >> i did, mr. secretary. there does not seem to be anything in the article with respect to what you are saying. it makes it out at exporting natural gas is an unmitigated plus. says exporting natural gas means well for the united states.

>> the article you're reading from does not capture the full -- >> fair enough. >> certainly, our minds are not weighed up -- made up, and we will not make up our minds because before anything -- first, let me quickly say that there are two classes of countries, countries where we have free trade agreements with, countries we do not. the countries we have agreements with we are obligated to say yes. but the countries we do not have agreements, we have to say what is in the best interests of the united states. before we do anything, and i have talked about to people who are concerned about how high gas prices are they say we're not want to do anything because we will make a determination of what the impacts are going to be as weak permit -- we permit it one terminal natural gas

terminal, we determined that would have a minimum impact. >> 10%. >> we can get back to you on details, but i was told by the eia that would have a very small impact on the price of natural gas in the diocese. >> thank you, mr. chairman. >> thank you, mr. secretary. we sat close to each other at the state of the union, and during that address i was happy to hear that presents a we need every available source of american energy. i am encouraged to carry echoed those comments in your testimony today. the president's rhetoric rarely match is the reality, and monday congress learned a lesson once again with the president's fiscal 2013 budget.

specifically, the tens of billions of dollars in new taxes and fees on american energy and oil and natural gas. it is hard to understand how the president can impose 10 new taxes on american energy and still pursue the all-out, all of the above strategy that developed every available source of american energy. the american people realize that does not make sense. we also support renewable energy. this president and this administration are ignoring the everyday concerns of american families. today the average price of regular unleaded gasoline is over $3.50 per gallon. usa today, the morning after the super bowl "chaotic spring predicted for natural gas." this morning carolco -- this morning's girl co"wall street journal,"

the average price of dallas seen -- of gasoline coming up 13 cents. bigger increases prices approaching $4 a gallon in california. then the impact of the families. higher prices at the pump force consumers to cutbacks spending on discretionary items restaurant meals, their cuts family locations -- vacations. we're trying to get people back to work in this country. it seems as if we're wrong to try to get the economy going and again we need affordable transportation field, but we know the president said under his policies he said electricity costs would skyrocket. people have seen that. i hope congress has a chance to vote on and reject the president's budget. i come with a number of

questions, and one is in terms of how the policies have played out. i would like to ask you about solyndra. he said his administration would be the most transparent in history. the people have not received all the interest on how their tax pier dollars for waste -- text appeared dollars were wasted on projects like solyndra. it is my understanding these house colleagues will cancel a meeting and vote at the white house makes these officials available to speak with the investigators. had he asked the white house to make the officials available? >> no, i have not. >> will you ask the white house to make these officials available? >> i think the white house can make that decision. they are very capable of that. >> the people still have lots of unanswered questions so you are not asking the white house and have not asked the white house to make as officials available?

>> i work for the white house and so it will be their decision. >> i want to move to keystone xl pipeline. and number of us met with a writer on national energy. he talked about 170,000 miles of pipeline moving liquid in the united states. keystone is 1% of that, about 1,700 miles. it is my understanding the pipeline which up to 100,000 barrels a day. is it fair to say that keystone pipeline would facilitate oil production in the united states? >> well, first, let me say that if you look at the oil pipelines in the united states, -- the

state department makes its decision that goes across borders. within the united states, a lot of companies have the latitude of the pipelines. they are taking the oil down south to refineries which are open and running. the biggest pipeline is the gulf states and the new pipeline is being built, pipelines are being reversed so that oil from wyoming and -- another pipeline from chicago to the gulf states where the major refineries are. those are going forward. it is my understanding the state department has -- has asked to

look at other alternatives on the part of the pipelines across the border. >> it seems it is fair to say keystone would facilitate oil production in the united states. should the keystone pipeline be part of an all-out all of the above strategy that develops every available source of american energy, which is what the president has called for? >> there are pipelines being built and upgraded, as i said, from wyoming and from north dakota. i was trying to point out where some of the bottlenecks are and how the pipeline -- and we are all for this. this is why the oil production in the united states is at an all-time high. we think we are projecting - production- has gone up 500 million -- 500,000 barrels a day, and because of the technology we invested in a

decade ago that shale oil production may lead to another million barrels a day increase. we're in the top three oil producers in the world , and we could be theone or two. as good news. all that is within the continental united states. this pipeline is being built there -- these investments are going forward. >> fink you, mr. secretary. >> senator -- thank you, mr. secretary. >> mr. franken. >> i would remind the ranking member that the express reason given by s & p was a function of some in congress who threatened to go into default.

i think we need to invest in energy, and i think we need to invest in energy in the future. i think all of the aba does mean -- does not mean all of all of the above. the bp spill showed not exercising some judgment about environmental and safety impacts can undermine the well-being and the goal of energy independence. what the budget shows to me is a sensible investments in innovation and energies of the future including energy efficiency, which brings me to teh 1703 loan guarantee program. i see that you did not ask for additional appropriations for that and that program is for

energy efficiency projects. and innovation in energy efficiency. i see it just asks for $38 million to cover administration costs. it seems the justification is you have funds left over in this program that you have not yet distributed. it seems there are funds left over in this program because there are approved projects that still have not yet received loan guarantees that have been promised. one project is from a company in minnesota. i know you are aware of that. sage has developed energy- efficient windows that are cutting edge, better than anything in the world and use photovoltaic cells to control the window, how dark it gets during the summer to block out u.v. light and to lower air conditioning costs and to let it all in and lower heating costs

in the summer -- and this is an amazing technology. in the spring of 2010, the department of energy promised the company it would receive a $72 million loan guarantee under the 1703 program to build a new manufacturing facility in southern minnesota. it has now been two years since sage has been notified at once received a loan guarantee and the deal has not been closed. while the department of energy prolongs the deal, time and money are running out for sage. there are a high-tech manufacturing construction jobs at stake here. it has been going forward with the project assuming they would get a loan guarantee, but they are running at a time and named may have to sell themselves to a french company. the guarantee was going to be submitted to the credit committee on august 22, but it was stopped. why is the department of energy

continuing to delay closing and executing the sage loan guarantee? >> senator, as you know, i am aware of that company. the technology was developed by the laboratory i used to be the director of. so i know about it, and it is very good technology. you also know that i cannot speak of the particulars of a loan. this is confidential information. we would be willing to work with sage and get them to talk to you on what they would be willing to do but it has to go through them. we cannot talk about the details of why. , i have been going through them and have been going back and forth goingdoe and the white house on this. the treasury department's views the loan guarantee for -- portfolio, concludes that the program is on sound footing on the 17 03 and the 17 05

programs. it will cost taxpayers $2 billion less than initially expected. if that is the case, why isn't doe moving full force ahead moving loan guarantees --and sage is first in line. >> the bulk of the 1703 loans are applicants we would expect to have been people like the nuclear power projects, also carbon capture. there is concerned there and we're working with the companies, but we have low gas prices, said that affects business decisions. we are working -- you got it right. we actually we did not request

more funds because we do have funds available. in terms of carbon captured sequestration, what we're finding is there are companies who are willing to invest because there are matching funds from companies, they are willing to invest in that part if there would be a utilization aspect to the carbon capture . could help all those things, and they are necessary in a captured sequestration party. we can help with the technologies needed to catch carbon. we will have to be capturing carbon from lots of sources by the mid century. utilization part is enough of a stimulus for those companies to say we would be willing to look

at those projects. we are working with companies. it still carries the agenda for word on what we believe is necessary, develops technologies of carbon capture storage at geological sites that would give the public comfort and help us determine, understand the flow of carbon dioxide in geological strata. >> my time is up, but i am not sure what i really wanted to talk about, doe moving full force on 1703 in regard to this one technology which is about energy efficiency for buildings which buildings consumed almost 40% of all our energy in the country, and i think it is absolutely essential that we pursue energy efficiency in our

buildings and that this technology does just that. thank you, mr. secretary. >> thank you, mr. chairman. i know it -- note that this is the last budget hearing in which you are chair, and you have invested a lot of time, and we are appreciative of your service. this is not laying good buy -- >> you'll have lots of chances to see me around here for many months. >> i want to thank you for your years of service. secretary missed -- mr. secretary, last year at a similar hearing, i mentioned to you that it was unlikely we would be able to reach the targets of the president's budget, and suggested that you needed to go to a plan b or

some thought if we do not reach this, how are we going to make decisions about where the money ought to be spent. it turned out that was true. the vote against the budget was unanimous, 97-0. the new budget has been offered. it is unlikely that it will even be debated. if it does, i think it will probably have the same fate. my question to you is, are you looking at a plan atfy 2013 fiscal year, and if not, why not, and if you are, could you share that with us either today or in subsequent hearings, or work with us to try to address the fact that the country just simply cannot afford to do everything that we would like to do? >> as what happened last year, we felt there was a willingness

to work with congress congress appropriations that determine what we do and what we get and with the consent of the president. as the process unfolds, we certainly are willing to work with all members of congress in the house and senate. >> i think we are going to need that. this budget is $1 billion more than last year's, and i do not see the's to find everything you have requested. i look forward to do that. let me turn to the issue of loans and guarantees and subsidies and sore throats -- and so forth. i want to try to take it out of the political they're a republican administration or democratic administration, there have been a number of the embarrassing moments where winners and losers have been selected on the basis of being

-- not doing basic research which is a function of coverage, but in transferring that research to a specific industry specific company. it is embarrassing to you, it is embarrassing to the president it is embarrassing to congress, it is bearing a single in the way in which money is allocated -- it is embarrassing in the way in which money is allocated. talk about how we can avoid -- and the problem is the political gets involved, and then there are headlines and allegations of crony capitalism and favoring one company over another for political reasons accompanied with maybe this the future and we ought to invest this money. your department has taken some second looks at some of the proposed loan guarantees, and one of those is the result of a

letter that was sent to you and i thank you for that due diligence which resulted in a different decision. saving the taxpayer well over $500 million. i thank you for that. can you talk a little bit about what i am suggesting here, which is two things, the due diligence needed to take second looks at what programs are currently being evaluated, and secondly, the whole concept of should a government be involved? larry summers said government making winners and losers is a crafty way of investing money. could you address the role of government being involved in basic research as opposed to selecting specific companies to develop a particular product

when we continue to run into -- whether republican or democratic administrations, embarrassing situations on the tax payer's dime? >> i am very glad to hear that you are supportive of research and development. . that is a proper role from the government because in many instances, not all of the investments in research and development are captured by the companies that make that investment. because of that, not only this country, but countries all over the world feel that it is a government responsibility to help with the competitiveness of the businesses in their home countries. to continue research and development. as you go more towards deployment, that becomes increasingly it larger responsibility of the private

sector to decide what they want to invest in. having said that, there have been policies in the u.s. that go back a century or more that do help beginning industries start off. this has been part of the tradition. if you think about going back about a hundred years and the beginning of the oil industry in the u.s., there were incentives to help early investments in development that are continuing, but certainly, those were there to spur new technology. there were incentives in the airplane industry. there were incentives to help the semiconductor industry. in the last analysis the most effective programs are ones which can guide and stimulate a

hydrogen investment. senators are supportive of a loan program that -- in addition to that, there are things that we can do which can actually just help guide those investment choices. most of what we want to do in my opinion is guide them to stimulate high-tech technology manufacturing in the united states. there is a reason we should not be competitive. germany remains competitive in high technology manufacturing. it of higher labor costs than we do. -- they have higher labor costs than we do. we are least as innovative as any country in the world. i would say more so. >> i think the market makes a

better decision then the government based on the record. it is not just the taxpayers' money. it is the stockholders' money. i think that is the way to go. the historical comparison made my not work now because we are drowning in debt. -- we cannot keep going. we cannot keep having headlines that a billion dollars is lost to the taxpayer. my time is more than expire. thank you. >> thank you, mr. chairman. welcome secretary chu. i appreciate the effort in working with us on a clean energy manufacturing strategy. it is leading the recovery for the country. our efforts in the tax credit

and loan program that you mentioned -- the board is bringing jobs back from mexico because of their efforts to advance retooling. jobs are coming back from a number of countries because we are focused there. i would encourage you to continue that and use the tools available. i want to talk specifically about a very important project for the country and certainly for michigan. that is a facility for which isotope beams project. michigan state won in a competition many years ago. we are coming into the fifth year of funding on this national project. it is a core piece of our research for the u.s. research infrastructure with brought benefits to science, home and security, medicine industry. not only will it develop the next generation of nuclear physics workforce it will

create thousands of jobs and it really address our u.s. competitiveness and energy security. we have to move forward. if we do not, and other nations will. they will be the ones attracting the best and brightest scientists and researchers and not the u.s. as you know, i talked to you about this as of my colleagues. you have heard from the scientific community and i would like to hear from you today. of what is the department of energy's level of commitment to this project? >> well, you certainly have talked to me many times. the same with the entire michigan field. we agree with you that it is a worthy scientific project. what we are trying to do is to try to figure out within the constraints of the nuclear physics budget in the office of science, how to best appropriate

all of those precious dollars. the question is precisely that. ultimately it is going to be the nuclear physics community that will be deciding what to do. it is not targeted at -- it is that the entire nuclear physics program nuclear physics is an important part of the department of energy portfolio. the budget has said that we have constraints. we also need to use our budget in science to help the mission oriented research that could lead to energy solutions and more competitive american endeavors. recognize the value of the michigan state project. we advance for a budget that at the st. -- is at the same level as low was appropriated last year. we will continue to do this.

in the end, we need -- in nuclear physics community to comment on all of the projects. >> mr. secretary, let me ask you to clarify this because the president has indicated support for this in his budget. it is not a level that we are allowed to proceed as we had been planning, but we have ground to a share, which is important. this is going to the figure of commitment in the u.s. on this particular project. they have been through numerous reviews and competitive reviews and in fact, come out with stellar recommendations. i am very concerned that -- about what you are now calling in of the review process and whether this is an effort to throw down or stop -- slow down or stop project on this incredibly important project. can you describe the review

process and how does this fit with the fact that there is in fact a commitment in the president's budget to continue this? >> the fact that there is a commitment means precisely what you just said. we are not prepared to abandon this project. the review project is not there -- it will not be the review of just this. i want to make that clear. we have about three large projects where we have a large nuclear physics program as well. within the constraints of our budget, we need to -- we now agree to it we need a community to tell us what they value the most. this panel review is not going to affect what happens to their team. >> id is not affecting what is happening -- it is that affecting what is happening to their team. the project moves forward for this year? >> we have amounts in fiscal

year 2012 and we have requested the same amount for fiscal year 2013. >> for the record as a member of the budget committee and moving forward with the appropriations committee, it is my intent to make sure that we make sure that they have the po commitment to move forward with this project. i hope that the department is going to keep its commitment going into the fifth year of a very important science and economic development projects that will create over $1 billion in economic activity and makes no sense to me why it would go into the fifth year and we are still having this conversation when it was conducted at the very beginning of all of this. priorities were set, dishes and were made. dollars were spent.

now, we go into the fifth year, ideas and the budget. it seems to me we ought to be talking about what we need to have to break ground and to be able to move forward with this rather than a another evaluation. i am all for evaluation, but this project has been evaluated and evaluated. it has come out with stellar reviews at every step. i would hope that the department will keep its commitment. >> senator paul. >> thank you for coming today. we are in the midst of a great reception with 12 million people out of work. i am very concerned about 1200 jobs in particular that are in kentucky. they work for a nuclear enrichment plant there. it has been in operation for many years. over 50 years, we have accumulated 40,000 cylinders of uranium waste that is sitting on the ground. something has to be done with it. these are 14 ton canisters.

we would like to enrich them. if we were able to do that, you could save these 1200 jobs. they will be lost this year if the company goes under. it that he is predicted to go under within 60012 months if we are not allowed to enrich the uranium. ideas under her discretion to decide to enrich the uranium. i would like to ask you if you will help us with these 1200 jobs and whether or not the department of energy will allow us to do so? >> centre, i see it is not a matter of -- ex- senatorseantor, it is going to be a business decision. we are talking about uranium and whether they're going to use the enrichment to generate the uranium. what they are asking for is a

government assistance to say, we have some depleted uranium. we can give it to them and have them in rich it. -- enrich it. we are concerned about the jobs, but we are also concerned about other things because in order to provide the funds to allow this to go forward, we would, for example, the using -- be using some of our uranium that we have on the open market. we have to do this very carefully because we have a commitment and any use of our uranium on to the open market might have an effect on the uranium markets that would affect minors. -- miners. >> id will not affect the taxpayers because it comes out of the proceeds of the sales of uranium. >> it does but you have to take that further because the market

for uranium has changed after fukushima. the japanese have had reactors down for a number of months. but he will be slow to bring them all. they're going to bring down the reactors more dast -- , more quickly. the reactors have changed over the past couple of years. >> if you are concerned about how much you sell, could do not increase your stockpile and then sell it over time? >> the way we see it, this is a very complex process. we are going to be giving -- using taxpayer money to pay for the services. that will keep the plant running. in the end, if there -- you have to separate uranium, the value is not as high because --

in the end, the taxpayer has to foot the bill. the analysis -- the cbo's office says it could be a big liability for the taxpayer. >> the gao said the uranium has a value of $4 billion. that would be returned to the taxpayer if we were to in rich it. you have a lot of problems here. we have 50 years of waste and we are providing you with an alternative that brings money back to the treasury and helps you get rid of a waste problem. we have 700,000 tons of uranium that is just a waste product sitting on the ground. many in the administration say you are all a green administration. we are giving you a chance to save jobs not on some kind of loan program. save existing jobs and a recycle something and cut the amount of uranium waste in half. these are all problems we face. if we do nothing, and i believe you have the power to save these

jobs and this is on you -- these 1200 jobs are yours to save if you choose to do so. if you do that, he will cause the taxpayer. it is $100 million per year to put things into cold storage. it is $100 million per year because someone has to guard the uranium. the surveillance costs come out of the company. i think this is a win/win situation for the taxpayer. i am not a big fan of expanding new taxpayer dollars. the taxpayer dollars here come out of the sales of uranium. if we were temporarily raise the limit, which i think you are a lot to do -- allowed to do under your discretion, we are talking about 1% of the world market. we're not talking about affecting the price in a significant degree. >> the report came out several years ago before lutetium up. there is a change -- before fukishima.

there is a change because of that and the german decision and slower start-ups in japan. we are trying to figure out to what extent they are starting all of their reactors. i would be a little surprised very surprised if their analysis of years ago would be the same -- >> there is a brand new one june 13, 2011. depleted uranium sales to be a good thing for the government. >> i would be happy to meet with you as i have indicated in a letter. >> i wanted to be said for the record that you could save these jobs if you choose to do so. this is not $500 billion being spent on something where we might get jobs and we have not. we have lost it. there are 1216 jobs in a law extending nuclear trade. their defense considerations.

uranium is not in open market. we do not sell it to just anyone. there are controls. it something where the government could do something that costs no money. i hope he will help us. the 1200 families are sitting there and listening to you today and they know you have in your power to save their jobs. i just hope he will consider this. it does not cost the taxpayer anything because the proceeds come out of the sales of uranium. >> if the sales keep a certain price. i would love to talk to you at length about this. we also see a potential hundreds of millions of dollar liability in the future. we have to work through that. >> thank you, mr. chairman. good to see you here this morning. thank you for visiting the site and the plan specifically. you know that it is one of the most complex and largest

contaminated sites in the world. our concerns about making sure we continue to get clean up done in a timely fashion is of critical importance. and not just to the state of washington, but to the nation. are you confident with this level of funding that we will have the plant opened in 2019? >> centre -- senator we are working hard to keep the environmental management budget at 0.7%. we are trying to keep it flat. we are trying hard to make tough decisions. there is the columbia river and wcp. first, we feel we're going to meet all of the legal obligations for fiscal year 2013 with this budget, but, as you

know i spoke to you about this -- there was an ideal funding profile for the completion of the wpc plant. it called for more aggressive spending this year, nectar, and the following years so that you do not miss around. if you have an engineer, you build it very quickly. that funding profile is not in the cards because of our budgets. because of that, we know that there is a risk that could happen. on the clips side, we have to prioritize and make sure that -- on the flip side, we have to price or ties and make sure that everything is taking care of. we take these responsibilities seriously. >> 2019 --

>> we cannot say right now. we are working through some of the issues. we have a program for testing things that two or three years ago, we fell to -- we determined that it would be prudent to go through a more comprehensive testing. we awknowledged that. these are the issues on this complex project. this is, in my mind, then used -- the most complex project. >> i cannot agree more. when some of the questions have been raised about the plant, do we have the right oversight on this? issues that have been brought up by others?

once the plant goes operational you cannot fix any -- ideas too hot to fix. >> -- it is too hot to fix. >> we make sure that we have our a team in place. in the direct oversight of the contractors. we have truly outstanding project managers. he has had a long track record. we were able to talk him into doing this. we have a new head of the river protection. we have a lot of respect for it. we have superb people who go all the way up and down the chain. we are putting a very good team

together. because of the importance of this project and a lot of these discussions go right into my office. i have spoken to the coo four times. we are making sure that he has an a team as the contractor. from my discussions with the people on the ground, they say that they have been doing their job to try to get the right people there. >> i think that level of detail is what it takes. i have always said you should make the energy secretary for life so that we don't change horses. can i get your viewpoints on whether we can dispose of military waste first? what we do not want is hanford to become a de facto site for

90% 9 -- 90% of the storage. i am trying to follow about whether the waste isolation plant in new mexico might be an ideal place for hanford waste. do you agree with him on that? >> first, we are going to keep separate the civilian and nuclear waste issues. it would be prudent to treat them differently. we are considering -- i am not sure where in the status we are, but this is for low-level reactor waste. one would need to do some studies to make sure that that would be safe for the high-level waste. we would need to do something along those lines. but, i am glad you brought up

this because this is a success story. it has been operating for about a dozen years. there have been no incidents. the local people are -- feel confident we are running this in a very safe way and it is good for the local economy. it is good for the economy of the state of new mexico. again, this is something we can show that develop repositories are at the acceptance of the local people. >> if i could follow up more on the details of that, i would appreciate it. and also on the thousand acres we are trying to get shifted over. shifting over a creek to the local community for energy parts in general. -- shifting over acreages to the local community for energy parts in general. >> senator chu let me say for

the record, and this is simply a philosophical disagreement, but your budget request is -- requests a 3.2% increase and decrease is the nuclear energy component by 10%. i find it discouraging as we look to the future. i know that is not be administration's position. nuclear is our future. i suppose people will not change their minds until the administration changes. for the record, to take my objection to the decrease while increasing the other energy production systems that you have -- i want to ask about one part of that. i noticed that in the budget you increase -- decrease the

fuel cycle. -- decrease the fuel cycle by 10.8%. when you were in georgia, you announced there was going to be a new $10 million advance to nuclear innovative cost cutting research and development for nuclear reactors and fuel cycle technologies. those are inconsistent. on the one hand, you are asking for a $10.8 million increase and then yesterday, you said there was new funding. what is this new funding? it came out kind of gray. >> in the first -- i have been very supportive of nuclear sense i walked in -- >> i understand. i believe that. i understand you are carrying the administration's waters. >> in terms of the fuel cycle we believe that the technologies

for fuel recycling -- we do not think they are economically viable. we do not think there proliferation resistant. there are other reasons. -- there are other examples. the u.s. developed this. as we have seen from the japanese experience that is well over budget. they believe it was a $6 billion investment and ideas $22 million. -- it is $22 million. the other technology like pyro processing, which we think they have good laboratory experiences and then we did the next up and did not work as well. it is not proliferation proof. it is more proliferation

resistant. had that worked well, we would have been encouraged. it is not to say we are going to abandon them. in fact, i am personally getting very interested in why it is not working. in my spare time, i am trying to help. never mind at that. it is going to be up here. it is not born to be in my garage. -- it i notis not going to be in my garage. we should be looking for ideas because we are interested in, if nuclear is going to be part of the mix, we would like to not use 1% of the fuel. if we can use 20% of the fuel 20 times more so you have a similar -- you have more

electricity. this is hanging out there. >> we are all in agreement. >> we do feel that it does make sense to invest in new technologies. we are going to have to come back and figure out why some of these do not going to the pilot skill. >> the one question i had was why was the announcement made in dorsa -- made in georgia? the work you have described -- >> i have been to be in georgia and -- i happened to be in georgia. >> i can take the message back to the other people that this $10 million is coming? >> no. [laughter] we announce competitive bids. in idaho -- they are free to compete with that money. >> mr. secretary, my time is up

but you and i had a discussion after confirmation hearing about the contract for clean up the promise he would get up to speak. i have questions about that. the budget is not very clear as to where we are headed. he will take them for the record? >> yes. >> thank you, mr. chairman. >> thank you. >> good morning. i can speak for the other centers. he would volunteer his garage if you needed. [laughter] i am very proud of accomplishments. i want to work with you to ensure that good work continues. in your budget, you go long way toward supporting that web's critical programs -- lab's

critical progams. this translates into low-paying jobs and a more comprehensive energy portfolio and a national security that comes with energy independence. kudos to you. this is a tough budgeting process. i support what the president and you have put together. i mentioned how important it is, financing is also really important for our energy future. would you speak to the fact we are at a critical juncture in regards to them ptc? idea's been instrumental in the expansion of what in the -- it has been instrumental in the expansion of wind. this important policy expires at the end of 2012.

it would you speak to the ramifications if we do not extend the ptc in the timeframe? >> very quickly. these are a way to stimulate moving forward to get deployment in the marketplace. because europe has worse economic straits than we do and you see countries like spain decreasing a lot of their tariffs and subsidies there is a diminishing of the market. it is the local markets that helps stimulate manufacturing in a particular country. this is why, when spain took away their subsidies and other countries are decreasing china

put in feeding tariffs for their market in wind. they recognize that they wanted to nurture their industries. they need a market to determine they are going to be -- they want to catch up in winter and technologies. they're becoming the dominant force in solar technologies. they see both of those at risk. as we saw your tax subsidies decreasing, we have to develop our home market. the world is expecting china to be the biggest player of renewable energy and the world. let us go back to the west. -- the u.s. if we do not have a home market, they would be less motivated to develop the technologies. the next generation of solar, for example --

those technologies are continuing to improve. one does not know whether they are using old technology or new technology but they are a player in that field. to have a home market for clean energy standards, a production tax credit those are mechanisms that can stimulate private sector investment that then stimulate manufacturing in the u.s. this is why yes, china wants to export but they also realize that we have to create a home market, as well. it is a mixture. >> you are implying if we do not extend the ptc the home market mission that we have agreed is crucial --

>> how do you get a market draw? how do you help bring lower financing to these projects? you talk to any supplier of wind and they would rather set up one in this country where things are being sold. in the solar world, it is more like being shipped worldwide. wind technology is getting very close to parity with gas. new gas at $6 per million cubic feet which is considered -- this is what they are projecting. the seller has dropped by more than 75%. -- solar has dropped by more

than 75%. another 50% is expected in the next five years. solar is going to be competitive with a new form of energy. again, we need to spur this market because this could be -- this is clean energy without subsidy. the world will want it. as i said repeatedly, we are either going to be buying or selling. i would rather be selling. >> we all would. my time is about to expire. on the critical minerals hub what are you doing to ensure that the doe labs are working on them? >> very brief answer. even the design of the hubs -- they have to come in with the design. what are they doing to have the industry -- to help the industry? i was just visiting a hub. it was wonderful because they

said at the very beginning what are the problems that the industry is interested in? premature aging of the fuel lodge. how do you attract more energy from those fuel rods. how do you make those reactors safer? those are the things that industry since with every day and -- can you simulate this? from its design, i t was, we can use the powers of high performance labs to help industries solve the problems. the hubs are specifically designed for that. the other thing i will mention is that we have also been easing the way to have technology transferred from national laboratories and universities -- we just had a very exciting

meeting. a 250 people from industry attended. this was on it materials needed for solving a lot of the energy challenges. this is lightweight, composites everything. it is going to be dominated by new materials. 250 people came. a lot of companies, a lot of excitement. the first week of pay off was venture capitalists are inviting people from the laboratory to come. the other laboratories are saying, we are to do this, too. we had another one on advanced computation. the people in the national labs know what the industry's problems are. they can be excited about helping to solve those problems. so this is something that has been occurring over the last

year. >> this is really important. you are really focused on it. thank you. >> thank you. i know it has been mentioned before. in a state of the union, the president said that the country needs and all out strategy and develops every available source of american energy. one that we all agree is cleaner, cheaper but pull all the jobs. -- full of all new jobs. i want to show you a chart showing where we are as far as the first -- 2010 24% coming from natural gas 45% gold. -- cold. this is from your agency. two more decades, this is where you are. a 27% natural gas. 16% of noble. -- renewable.

with that being said, the president to attack but it had a $2.7 billion for the energy efficiency . you the comparison. -- you can see the comparison. this is where your money is going. then you have the office of nuclear energy. a nuclear is right here. it is where you are going. that is where you are. the greatest cut has been right here. you are still going to be dependent on it and we can do is much cleaner. i cannot figure their rationale. when you look at the all of the above, look at the -- they will continue to provide the energy. it does not make any sense at all. we cannot do it better, cleaner and work together because ...

you are putting this out there. we need it. i do not know if you have a comment on it. >> what we are doing -- during the recovery act, there was a very large investment in clean coal partnerships. unfortunately, a lot of the company'sies have pulled out. there is some hope and we are still pushing this as much as we can because we believe we have to develop technologies to use coal in a clean way. this means none of -- this means to capture the carbon dioxide. we remain committed to that. because of this changing landscape of companies not

wanting to invest in large projects, sometimes hundreds of millions of dollars going into a project, we cannot reduce utilization. >> our times are so limited. there is no coordination as i can see from the environmental protection agency trying to work with you to develop policies and be able to use the energy we are depending on. that is for the disconnect comes. what we are asking for is, somebody has to be talking to somebody so we can continue from what you are depending upon to be able to use it cleaner within the environmental standards that we are setting. no one is working together. eshoo, when you came before us, you said -- last year, when you came before us, you said that everyone was trying to work together.

then you said, colder liquids with carbon capture and sequestration actually makes clean fuels. once you start blending in biomass, he becomes a real plus. it becomes carbon neutral. for that reason, the department of energy is very eager to promote that research. last year, your budget had $5 million in funding for that research. this year, zero. have you changed your position? what is the administration's position and why would you have such a reversal? >> i am going to have to look at that. i will have to get back to you on that. i do think that and coal to liquids with carbon capture -- this is true of coal firing by a matter with a coal plant. if you capture the carbon dioxide, it goes -- with a

carbon capture, it goes negative. >> you testified last year. we have people wanting to do this and the roadblocks are insurmountable because it looks like the administration is saying one thing, but they are pushing and promoting because of your investments. i think this shows completely where you are making your investments without taking into consideration what brought you to the dance and what you are expecting. if you look at natural gas and coal, you are talking about 66% of the energy for the next two decades. with very little money going into with >>it. >> the research -- when it is to be expensive, it is on the deployment outside. this is a charge of electricity

which is a major part of energy, but about 30% of energy is from oil. as i have tried to say before, our budget does not reflect the percentage of energy we use. those dollars go in to the percentage. of the oil industry is a very mature industry. we do not think, even though it is 38% of total energy, we are not going to put 30% of our daily budget in that. we think that carbon capture getting cold clean, is important. >> so many things we can use it for. >> i agree with you. >> the budget does reflect that. >> i know we have a difference. >> thank you. >> centre sheehan. >> thank you, mr. chairman. the u.s., mr. secretary. i would never say you have deaf

ears. i have found you to be -- thank you, mr. secretary. i would never say you have deaf ears. i have found to be reasonable. -- you to be reasonable. i would like to talk about the advanced manufacturing program. i was pleased to see that the budget included continuing those programs and expanding them. we have some real success stories in new hampshire under at least two of those programs. we have a company called revolution energy where they have used the 16 03 program to save money is in schools -- money in schools. we have a wind farm that has used the protection tax credit. it has made a difference in the jobs going into government of

farms, and also in reviving the communities because of the economic activity that goes on all around those projects. i think they are important. i agree with your comments about the importance of continuing these investments and in these markets. i am concerned that these are going to expire at the end of this year. at this point, the extension of the payroll tax cut and unemployment have not included a package of tax extenders' that address these taxes. can you talk about adding to what you said about what happens to the market when we see this kind of interruption in support for these new energy technologies? >> as you talk to industries out

there what industry wants more than anyone else -- anything else is to seek stable government policies. they want to see something focus. a lot of these investments just to plant them and get them licensed can go well beyond 80- year cycle. -- a 2-years cycle. by most people's accounts, these have been stimulating clean energy investments. with the end of the recovery act, the administration is very concerned about our role with these investments. you see this in the financial newspapers.

there is going to be a real concern or is it going to roll off and stop? again, i go back to reiterate that it is very important that america develops a home market for the development of the industry'sies of manufacturing in america. we have a large toll market in the automobile industry and that stimulated a lot of development. >> is it fair to say that if that uncertainty exists because we let these tax credits expire, there is a good likelihood that we're going to see a number of jobs lost? >> yes. i think there are early returns on that already. if you read the financial pages of the various newspapers around the country and around the world, we are -- where there are continuing policies that all investments to grow.

otherwise, there is a pulling down. >> i was also very pleased to hear the president, in his state of the union -- to see that in action, the commitment to energy efficiency, which is something that i believe is very important. we have a bill that addresses energy efficiency in the industrial sector and government. one of the best ways to encourage energy efficiency is by supporting the expansion of combine the power. -- combined power. the technologies exist right here in the u.s. the jobs that are created are here in the u.s. can you talk to what the position of the department is on bomv -- combined power? >> we are bullish.

in today's generation, you can get 60% efficiency in converting that energy into electricity but, it is 60% efficient. some companies say 61%. i will not quibble. with combining the power, you go up to 80%. if there is any way to encourage people to do that, that would be great. there are new ideas and new innovations being deployed that seem to work. here is the issue. sometimes, you want the electricity, not the heat. or maybe you what the heat but not the electricity. i was digit -- i was visiting a project in houston, texas that power is a collection of medical centers. it is the 12th largest city in

the u.s. everything is big in texas. [laughter] they had a very -- they had a single cycle. they have high temperatures used for heating or air conditioning. they took that processed heat and they used it to chill water. there restored and the cold water in a tank. -- they stored the cold water in a tank. it took less than 10% of the energy to keep that cold. they ran it so it would balance. i t was like a big battery of heat that they used for air conditioning. i t was very cost-effective. it was very fuel-efficient.

it drives down the cost of the medical centers. that is an excellent example of how combined heating power can be used. new buildings now, many of them, especially if you have a real- time pricing of electricity they use electricity at night -- chill some water, use the ice during the daytime. purchase electricity where is inexpensive and decrease the bill. we are getting better returns in investments because you are using the asset in any way. the good news is energy efficiency. combined heating power in any city, and the university, and the hospital -- any university any hospital that has water can

use it. we would love to see it go in that direction. now, you are going to 80% efficiency. >> thank you. >> thank you, mr. chairman. dr. chu thank you for working with us on some important projects. i like some things in the budget. one is energy efficiency. what you are talking about is consistent with the legislation which was introduced in the house yesterday. we are hopeful that s1000 makes it to the floor. i am concerned about some other aspects of the public -- of the budget. let me focus on something else positive, which is the small modular reactor technical support program you have a funded at $65 million. this is an exciting innovation.

they have safety advantages, as well as economic advantages. i know that the regulatory commission has licensed a plant and there is another one coming with a larger reactor. this is a good investment and something that will be very beneficial to energy moving forward. i thank you for that. with regard to car been captured technologies, i do not know if you have had this question and i am apologizing. the car been capturing programs -- carbon capturing programs -- there is nothing here saying -- laying it out. in the absence of that, i hope the department would do so. i introduced an amendment that would require the department to tell us how successful the programs have been and what the

costs start to get it to the commercial level. my question to you there would be, what is the pathway and what can the department give us in terms of information as to what your scientists believe is the way to move to commercially viable demonstration projects? >> sure. first, the carbon capture technologies -- this is after combustion, you capture the carbon. there are chilled ammonia type technologies. those are being tested. they are in the commercial sector. we feel that we would like to develop less expensive means.

we think that this would not spur china or india into using this technology. we would like to improve. we think there are potential ways of improving them. one of the ways is to -- we are investing a lot of research to decrease the size of these captures. instead of that being absorbed in a certain material, you can use smaller matter. we are investing a lot in the research of that. we are investigating ways -- and other ways to separate oxygen from nitrogen. >> what i would ask -- if you are willing i will submit a question for the record. i know a lot of members would be

interested in your response both on the specific technological improvements that you would recommend, but also just what the department sees as going for -- as how to go forward. >> the path forward is to take advantage of the industry's interest on the car been captured utilization. we want it to be cost-effective. with regard to uranium enrichment i appreciate that you talk about as needing to have a domestic source and providing $150 million for domestic uranium enrichmant. you and i have talked about this a few times before. it is interesting you included it under nsa because i think it

would be appropriate under the nuclear energy account. is there a reason? >> no. that was signed by people more like you than me. [laughter] >> uh-oh. >> i am just saying you have to park summer, it is appropriate to put it in nsa. >> ok. we are interested in networking -- we're interested in knowing what account this is coming out of. i think it is in poor and that we move forward. the more information, the better. if you could talk for a moment about what you think it is so important. we need it for our nuclear power plants. at one point the majority of

the enriched uranium was being produced by the united states. a place to start where do we get its. we are not producing nearly as much as we used to. >> of the uranium used in nuclear security purposes has to be indigenous to that country. you do not want one country to be using technology and another company can turn it into -- and other country can turn into weapons. we need to maintain our stockpile. uranium that we need to produce.

there is a larger issue about the civilian nuclear side, much larger amounts of uranium. if the united states -- the united states is well-respected for its safety record and the way it handles its own civilian nuclear industry. it would also benefit if we had a homegrown technology so that we can offer for sale to other developing countries. france is a player, russia is a player. if the united states is a supplier of this uranium, we

could have a moderate effect to. it is for that reason as well. >> it can come from the united states, and will be a stable, affordable supply. >> if you put yourself in the shoes of another country who might want to have technology, they would not want to see several suppliers. they would not beholden to one or two. we also feel that the united states can lead by example. we can decrease the risks of proliferation. we will be a player no matter what but we would benefit from that respect as well. >> i appreciate the follow-up.

>> welcome mr. secretary. thank you for all that you are doing. i agree with many others that it is imperative that we pass the production tax credits. it is beyond comprehension why we are not moving forward aggressively. i want to thank you for your help in vermont's smart dgrid. if we are serious about energy efficiency and using electricity as alike -- as efficiently as we can if a nation can learn from what vermont will be doing. we want to share that with the rest of the country. mr. secretary, it seems to me that one of the sad moments in

terms of what is happening in our country today is the degree to which as a nation, as a congress, we are not dealing with year-end as planetary crisis of global warming. i say this not to be terribly partisan come up but it is very sad that we have a major political party were many of its leading members project what the scientific community is saying about the reality of global warming. it is caused by man-made activities. if we are aggressive, we can lead the world in reversing that greenhouse gas emissions. it is sad to me that we have so many people are rejecting scientific evidence. in terms of cutting greenhouse gas emissions, i think energy

efficiency is a huge step forward. there's not much disagreement on that. whether reservation is a very important part of that. i come from a cold weather states. we are making some progress in retrofitting homes. working families are sagging -- same, i am saving money as a consumer. we are creating jobs because we are working on those homes. being aggressive weatherization is win-win. >> if you look at our request i believe it is up from what was given to us for fy12. >> here is the story.

the budget before us invest only half as much for 2013 as we did in 2008. in 2012, congress approved, drop in funding to $68 million down from $227 million in 2008. you went up from last year, but we are below where we were in 2008. would you agree with me that investing in wheteatherization isa a win-win? >> we are also trying to promote programs -- i really think if done right it can save money

and the money one needs to borrow, if paid back in modest loans, it can decrease your bill. >> right. i do not know if there is any partisan disagreement on that. let me ask you this question. i am working on a concept. one of the problems we have in terms of weatherization if he wants to reduce his built in his home and knows that retrofitting will do that, but he does not have the upfront money. if we can get him the $15,000 in eight to cut its fuel bill by 30% and paperback by the reduced

-- and pay it back by the reduced amount of money he is spending on fuel, what ideas do you have about how we can get to middle-class working families that upfront money so they can lower their fuel bills and save money? >> usually when they are buying a house. in the toolbox, energy mortgages. one way to stimulate that is to encourage lenders lenders asked for a person's income. they asked for their property taxes. they ask for a lot of things. they asked for a structural engineer.

it would not be too much to say why not get an energy audits from the engineer? to make a wiser homeowner -- >> i agree. but it is not just people purchasing a home. will you work with us on this? coming up with loans that will be rotated? it is a win-win situation. >> absolutely. utility companies can play a role. >> yes they can. >> they have access to capital. >> that is correct. thank you. >> i know that some of us have additional questions. i had one additional question, mr. secretary, that i wanted to ask. i will see if others do as well.

i've wanted to ask about the department plans now that the chemistry and nuclear facility has been put on hold. for many years we have been told that the replacement nuclear facility was necessary. now we are told there may be alternatives that the department wants to pursue. can you describe what changes in operations and stopping -- and staffing you anticipate now that the cmrr has been delayed? >> much of the staffing -- what replanted do is go ahead and completes -- what we plan to do is go ahead and complete the design of the building. what we have been putting -- it was mostly engineering design.

we will get to 90% of the engineering design part of it that is very prudent for a number of reasons. before you start construction, it is best to have most of it designed. you are correct, we are now putting that on hold because of the budget constraints. we have to look at all the other projects and we could not simply start cmrr and we felt there were more compelling reasons to begin that. we are looking at the plantss -- the footprint is there. there are other parts of this, we are looking at and working

with the defense department as to what the requirements will be. is that it's worked out that will be folded into a. -- is that gets worked out that will be folded into it. we will try to figure out how we can repositioned. what is different as you all know is that we have severe budget constraints and we do have a deficit. >> you are not clear as to what toadditional options the administration would expect to take to meet its needs it was expecting to meet the construction of this cmrr. >> we are looking at some of the

things -- some of the things they would have done, we are looking to offload some of that to other -- i forget the name of it. they have a new name for that. also we are looking very closely at how we can best fulfill our obligations and it needs for our nuclear security. we believe -- our overall plutonium strategy. there will be some, we feel, but we do not know whether there are other options. >> let me ask senator holden, are you ready for your questions? >> i am, mr. chairman. i appreciated. mr. secretary, good to see you again. i would like to ask you about

gasoline prices. i am sure you are aware that the average price for gasoline in the country is over $3.50. that is up 90% since the current administration took office. my question relates to why aren't we advancing projects like the keystone pipeline to provide more supply and to help bring gasoline prices down? you were asked to review that project. the department of energy was asked to review that project by the state department. you're an expert -- your expert was asked to review the pipeline project and comment on it.

i will quote from this report. "gasoline prices in all markets would decrease. " that was by your experts. department of energy, duke -- june 22, 2011. my question to you is your we have rising gas prices, putting a strain on our consumers businesses on the economy, and the administration turns down a project that would help us reduce gasoline prices. why is that? >> first i am not aware of this report. i can get back to you on that. it is my understanding the

gasoline prices in the united states are affected by refining capacity is an access to those refiners. the biggest bottleneck was the bottleneck from oklahoma to houston. there was a very large price differential of crude in houston. that is being taken care of by a by the people who invest in pipelines. that is being taken care of as speak. there are numerous pipeline plans. one is being reversed so that refined products from houston and louisiana can be imported to the midwest. in other pipeline from chicago

is also being built. much of the pipelines in the united states that would bring oil from wyoming, north dakota, and to get the oil to the refineries that have the capacity are being done in the private sector. this is on a path that is creating jobs. it is going to be helping. in the end the gasoline prices, we are very concerned about and the administration has taken -- this pipeline activity occurs because once you see big price differentials, the industry's steps in to say we can fix that. in addition to that, we're doing a lot. twice, we have changed the mileage standards of automobiles.

this directly affects american public. by 2025, the average savings would be $8,000. >> mr. secretary what you'll have been part of this administration, gasoline prices have gone up 90%. we are looking at $4 gasoline by memorial day. you're willing to build all types of pipelines but your honor willing to build the pipeline that would bring 830,000 barrels a day from canada and will help alleviate a bottleneck in my state of north dakota. our oil is discounted $27 a barrel of west texas because we do not have the pipeline capacity to bring it down to the refineries. we will put more than 100,000 barrels a day in that pipeline.

instead, we have to run trucks. you want to build all of these pipelines, and why not the keys down? >> pipeline from wyoming and north dakota can be built. the administration has -- there is not a decision in the administration need to make on that. the only part of the pipeline the administration was asked to weigh in on was the pipeline the one from canada to the united states. the pipelines are helping bring the oil from your state down to those refineries. those things are things where -- >> that is not the case. i just explained to you. >> my understanding is if you look at the pipelines that exist

today and you look at the major bottlenecks to the pipelines those pipelines, the part of the pipeline that goes from canada into the united states, that is -- my people tell me that to for the next decade or so, with the increase in production of canadian oil, that will not be the bottleneck. where we have the bottleneck is to houston, from chicago. those things are being built. those are taken care of. >> i am over my time, mr. chairman. i will defer for a second round. >> why don't we go ahead with the second round? >> thank you.

thank you for your patience, secretary. several weeks ago, we had a presentation the global picture. i had an opportunity to ask his opinion on where alaska natural gas to fit into the bigger picture as we talk about domestic natural gas. the center has on many occasions asked questions -- the center has asked many questions about the export of domestic product here. you have the authority to sign off on whether or not export is in the national interest. the question is whether or not alaska was viewed separately from the rest of the lower 48 market. different type of gas different

processes, a different market. alaska is much closer to the asian market and we are most of the lower 48. it was good to get his opinion on it, but you're the guy that ultimately signed off on export licenses. how do you view alaska's natural gas and whether or not this is something that would be viewed differently than the domestic production. >> given the charge of the decisions we would have to make it would have to be folded into what would be in the best interest of the united states. alaska is in a different location. we would have to fold all that can.

-- all that again. -- all that in. before we license anybody as we deal with these applications, we have to be very conscious of the fact that we do not want to have a significant impact on the gas prices. considering the benefits of the united states and its totality. i cannot comment on what -- having said that, alaska does have natural-gas. >> a lot of it. we are still trying to figure out how we access that. that is our challenge in the state right now. one of the things we are looking at is the prospect of rather than sending it through an extraordinary transportation system to move it to the state

liquefy it, to move towards export. not a decision that has been made. we have a long way to go, but it is an issue. it is a very different markets it is a very different gas. i look forward to the opportunity speak with you about that. we have also had the chance to talk about arctic methane hydrates and the great potential that we have. methane hydrates are going to continue to be part of the natural gas technology research and development budget. that is good. we are not the only country working on this. we have a good partnership with japan. right now, there is a a major test scheduled in alaska in partnership with japan.

i know you hope to follow up on this test. i am wondering if you can tell me what level of commitment is from the department of energy to continue this public-private -- with the progress that has been made to advance the research in an area that i think we recognize holds great potential. it may be further out in the distance than some of the technology and front of us, but exciting. can you give me any updates? >> we are going ahead with this test. japan is very interested because they have reserves off the coast. as you noted if one can figure out how to extract its it could

be as significant or far more significant than the technology that was developed for shell gas. we are looking forward to the test. the test is one part of a program going forward before industry would want to begin to invest in it on their own. again, it is a balance. industry is rated debut methane hydrates as something that plugs up their minds. -- industry reviews methane hydrates as something that plugs up their lines. right now the program being done in alaska is being directed by a department of energy scientist. it is a research project, but it is one part of that research project. after this stage we see it

continuing. >> i think it is important because we recognize it -- there are 12 million in this budget for all methane hydrates research next year. my understanding is this test is going to be more expensive. the commitment to continue is going to be important. we will follow up on this conversation. thank you, mr. chairman. >> thank you. you have been a patient sold. you've sat in that seat for 2.5 hours. up on this side of the desk, there are pretty diverse views with respect to energy. folks who care about solar and folks who care about nuclear. there is a wide variety of opinion. i want to ask you about an area i think would be unifying. something that i think you, in particular, to champion. that is energy storage. when you look at energy storage

this is something that makes wind and solar more economic. it also is hugely beneficial to coal and nuclear. it helps the transmissions systems operate more efficiently. you have something that is crosscutting in terms of technology literally benefits every corner of the country. i cannot find a corner of the country that would not benefit from it. yes, we have not been able to get in place a clear strategy to tap the potential of energy storage. a couple of years ago your science adviser a distinguished individual, i asked him about energy storage. he said, we will wait and see what happens. we have gone to a variety of debates. i am concerned -- it looks like

energy storage is cut. what would it take to did you and the department to lay out significant strategies to tap the potential of energy storage? the real potential for production and distribution is not consumption. it is the other side of the coin of energy efficiency. it could be something that would be backed by democrats and republicans. it would be crosscutting in terms of technology. so little has been done to lay out opportunity for a real strategy. can we persuade you to do that? >> you do not have to persuade me. we're doing that. this is one of the reasons why one of our hub is an energy storage hub. not only for automobiles but for utilities. it is not only batteries, but

for compressed air. you can use nighttime energy to process heat. sometimes when the wind is blowing, you can put that into a lot of kind of storage. hydrous storage is something i have been pushing very hard. no environmental impact, but it is a form of storage. we know that energy storage at the megawatt power scale would have been credible applications -- would have incredible applications to the distribution system. it would make it much more efficient. you purposely overfilled -- if

you had little batteries it would have a profound difference. the energy storage is about 350 kilowatt hours. energy storage for renewal bulls, making a more rigid rules, -- renewables are all part of that. we're not only looking at batteries, we're looking at compressed air. >> if you could send me the document that reflects this strategy, that is what i am asking for. all i can see in terms of documents is the proposed cut in storage at the office of electricity. i was not interested in debating that. what i wanted to see was something that would lay out a strategy.

we have not seen such a thing. if you could get that to me, it would stop this back and forth. what i really want to see is an actual strategy so that everybody would understand what the potential is. thank you. >> 10 seconds. the office of electricity was cut because what we decided was that it was much more appropriate -- we were trying to consolidate where we think it would do the most good in terms of the level of program management. overall, if we gather up all the pieces, it is going up. >> thank you, mr. chairman.

energy storage is part of efficiency, yes. earlier we talked about your commitment to a new enrichment technology that would give the united states the ability to get back on the cutting edge in terms of our technology and be able to supply our energy needs from the national security point of view. that comes from domestic sources is that correct? >> correct. >> is that the policy that we should have a u.s. source? >> it is not a policy. we are obligated to have u.s. sources. >> this is a requirement that we have a domestic source? with regard to other activities

i extend an invitation to you to come out and see what is going on there. there is also a cleanup of the existing technology. the contamination is going on. there are 1950 workers involved with that. i notice in the budget, there is a 33% cut. will this reduction in funding allow the department to maintain the commitment the department has made to celebrate a cleanup? it was made back in 2009 -- celebrate a cleanup. >> it was made back in 2009. >> we are looking at all of our options.

whether we can do some bartering, things of that nature. we have to be careful whether it will affect the markets. we are trying to figure out how we can move that forward. >> in the past, you have both board and sold some of your own stockpile of uranium to provide the additional funding. it seems to me that that would be the right way for record you say you need to analyze it more, what do you need to do? >> we are already catalyzed that -- we have already analyzed if we introduce into the market something that is 10% or below we feel safe it would not have a material impact on the market. we have -- we do not know what will happen beyond that.

>> it sounds like you have done the analysis. you did it in 2011 and went to the third quarter of calendar year 2013. you found no adverse impact for the level you are talking about. i would hope that having done that analysis, we could move forward to give the popes -- give the folks at the plant some certainty. i worked a lot -- in the end we accomplished something great. it was initially opposed by some people. in the end it saved the taxpayers $3.40 dollars -- three and $4 billion.

for the taxpayer, it is going to cost the taxpayer more if we get away from the accelerated cleanup. i urge you to look to the analysis again and provide the funding through the border or sales to keep your commitment. i think it is the right commitment. >> we did did the analysis at the 10% level. right now we see us bumping up hard against that. if you want to ask us to do an analysis higher than 10% we would be receptive, but i think the senator might represent an alternate point of view. >> at the analysis done last year was conclusive as to not

having a market impact. our obligations, we are bumping up against that. we would have to do in other analysis to go higher. >> are you committed to the cleanup? >> we are committed with whatever the means we have and the constraints we have to the best we can. if you want to ask us to do in other analysis, we would be delighted. >> if that is what it takes to keep the commitment. i think it is the right thing to do. it is the right thing to do to keep on site a lot of highly skilled people who are otherwise going to be found without a job or moving nine. more difficult to bring them back to continue the good work they are doing. we're very interested in being able to take some of the material at of the decontamination and cleanup efforts and be able to recycle

those materials. there is a concern with some of the other agencies looking at the safety of that. we think that is an enormous benefit to the taxpayer. >> thank you, mr. chairman. thank you, mr. secretary for your patience. i want to follow up on what senator sanders was talking about. i have started a retrofitting initiative in my state called back to work minnesota. i really believe that this is low hanging fruit. innovative financing mechanisms to get the upfront money to retrofit commercial buildings municipal university's schools

and hospitals, etc. it pays for itself. it puts people back to work. it puts people in the building trades to work and to our in a depression or a recession. it helps our manufacturers in minnesota. it would do this all around the country. it is part of the president's better building initiatives as well. i would like to bring up a few little areas. you talk about utilities companies can provide the financing. in minnesota we have a mandate for utility companies that they have to increase the efficiency of their users by 1.5% a year. this is a mandate that encourages the utilities to find retrofits so that our energy efficient projects that they can

help finance. i was wondering if you -- if we legislated that as a national part of the clean energy standards, that would be helpful? >> i am not sure. i do not know whether they did let me just say -- i do not know. here is another thing that would be helpful. this happens in new york and massachusetts and california. if the regulatory agencies say that if the utility company gets an equal return on investment if they have a customer business, a homeowner and a of loaned the money to retrofit that is seen as an

investment in the utility company. they are entitled to a return on their investment. they became a bank for the business for the homeowner. you are entitled to recover for your investment in energy efficiency. instead of building and other power plant -- >> exactly. i have limited time. property assessed clean energy financing. this is basically done for commercial buildings. a state or a county can lend money to a commercial building to do a retrofit but some part of the financing put the

property tax on -- even at the building gets sold, the property tax continues. it is a great model. on residential pace, the fhfa would not give mortgages to residential -- home -- because pace would get paid back before the mortgage. do you think that is a wise policy? i have written that a letter. would you do in my letter? >> i have been talking a lot about this. the issue is that even the lenders do not want to even be

-- let's say you have loaned $200,000 to buy a home. the homeowner wants another $10,000 for home energy improvements. to have equal footing in the payback period -- payback. lenders are setting, we do not want to do that. pace is viewed as a mortgage. even to get it even would be a great help. we're trying to work this thing through, but the lenders really feel that nothing should stand in the wake of them and the first mortgage. >> very often, the lender would be the city or the county. this is not when someone is buying the house but they have been in the house for a while. it is about making.com more

efficient -- making that home is more efficient. putting people to work. making that house more energy efficient and bringing down the cost of energy in that community. >> i would love to talk to you and the time is up. there are a couple of other ideas that are worth thinking about. on the commercial sector, the real estate investment trust. all we need is qualification from the treasury to say if a commercial building wants to invest in a new system or an energy-efficient windows would you allow that to be written off

as a capital expenditure cost? just the clarification of that would spur a lot of investment. they paid the energy belt because occupancy, and go. -- come and go. it goes into the rent. it will not cause the government any money, and that would be good. there are a couple of other things. sometimes, retrofits if there is a community block that wants to get together, i am saving a lot of money. now you can capitalize on that. talk about it. make a groupon type thing.

you demand a 30% discount on the installation and everything else. to the contractor, it is great. that can greatly reduce the price of retrofiting. it can get some social awareness as well. it is all about saving money by saving energy. if you lower the price by 30% companies that have access to low-cost financing, a moderate interest-rate is a no-brainer. it is not an out-of-pocket expense and you are saving more and paying back the debt. it is less than the money for your energy bill. these are jobs that could be for decades.

we have 140 million homes. there are many things that we are trying to get programs and we have a number of programs -- those are some of the ideas we are talking about. to stimulate state and local governments to think of better ideas. a lot of this can be driven by the private sector. energy efficiency does save money. >> absolutely. can my office work with your office? block parties. thank you. >> senator holden, you have the final questions. >>us in and nobody else wonders

then -- assuming nobody else wanders in here. >> i would like a third round for block parties. >> thank you for being here. i am rather looking for help on this issue of energy infrastructure. in our last question and answer periods, and we went through pipelines. you said we're trying to build all these pipelines. you talk about all these pipelines. trying to build around the united states. there are thousands of pipelines. what are we on willing to build a pipeline that will bring crude in from canada and will help us move our crudes in the country? why is that? >> first we are not on willing

-- unwilling. we are not in the decision making loop. their position is they wanted to an evaluation of the environmental impact. the pipeline is being built in the country are investments of the private sector. i see a lot of healthy movement in the pipeline construction with and the united states. in large part because of the ability to get oil from, shale. you have to get that oil to the refineries. this is decreased oil dependency. the private sector is the one that is investing in the pipelines. the only time the government

steps in -- there are certain issues but in terms of what you are concerned about, is the one that goes across the border. >> you brought up to a great points. your technical advice, the department of energy, the report is cited said the keystone of pipeline will lower gas prices. in addition, the report also says the gulf coast refineries will likely consume additional canadian of oil in excess of what will be provided by d pipeline. -- by the keystone pipeline. your experts have said that it will be used tear and we will

need more not less. it will not be exported. on your technical advice, you have said, the department of energy said it will reduce prices and it will be used here. your experts. i appreciate your technical advice and i think it is very good. private sector investment, this is a $7 billion private sector investment. not one penny of government spending. given that it would bring us more crude which we otherwise have to get from the middle east and venezuela, and it helps us with the bottlenecks. we have a $27 a barrel crude in my state. unbelievable traffic. not only do we have discounts and infrastructure problems, we have the consumer and business

is paying $3.50 a day, the highest it has ever been this time of the year in our country. it hurts our economy. what would be allowed this? i do not understand. you said we were willing to build pipelines. >> i do not know the particulars. trucks are short-term solutions. they are very expensive as you well know. >> i agree. >> if we are talking about the trucks in north dakota and wyoming, the private sector i do not know the particulars about this. once you see a lot of traffic that is the last resort.

" mr. secretary, i am looking for help. thank you. your experts have been helpful and they have been right on the money. in our state we talk about all the above energy development we just don't talk about it, we do it. if you go to our state, you will see wind, biofuels biodiesel shale gas oil hydro all of these. we are really doing it. the reality is to get to that all the above we have to develop all of them, not pick winners and losers. i am looking for help in this endeavor. mr. chairman, i may go over my time. i hope you will indulge me.

80% of the new development -- instead of excavating you drill. your greenhouse gas emissions is the same as for conventional drilling. right? talk to me in terms of what canada, united states, and some help from mexico, what we produce about 70% of our crude. if we had keystone, we go to 75%. we do not have to rely on the middle east and venezuela. 80% of new development is the same footprint as conventional, why wouldn't we be trying to do all that that we can do? from an energy standpoint, from the concept of north american energy independence, it is in this a plan that gives us the opportunity to get to all the

above? how can you help us get this done? >> it is environmentally much preferred. >> 80% of new development. >> i understand. it is a little bit more carbon intensive. you are using fossil fuel to heat up the scheme. it is much preferred -- heat up the steam. this is where the industry is going. they're finding out they have to go deeper and does not make sense. there is also the environmental cleanup issues they have to face when you have that open pit mining. the recovery is much more desirable.

>> you address that problem too. >> because you are using natural gas, that is going to cause more carbon but the refining issues are much easier. all sorts of issues are easier. >> thank you, mr. chairman. >> you have been a very generous with your time. we appreciate you being here. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> tomorrow, on "washington journal" we look at the tax provisions included in the

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