then mitt romney campaigns in phoenix, arizona. them president obama talks about gas prices in miami. >> its is our cause that avoids a hard decisions and the delusion that a world of conflict will somehow mysteriously resolved itself into a world of harmony. not rock thedo boat. this is hogwash. >> of canada's campaign for president, with a bat at 40 men -- we look back of 14 men there ran for office and lost. they have a lasting impact on american politics. >> this is also the time to turn away from excessive preoccupation overseas to the

rebuilding of our own nation. america must be restored to her proper role in the world. we can do that only through the recovery of confidence in ourselves. >> cspan.org/thecontenders. >> now conversation on the global business outlook. the panel included the head of the world bank, the british chancellor, and policymakers in japan and hong kong. the moderator is march 10 wold -- martin wolfe. >> i think we can start. it is my great pleasure to

moderate this very important session for which i have done for a number of years. i have always enjoyed it enormously. whether the panel has enjoyed it as much as an open question. that is why i am invited back. the issues in front of us are of enormous interest and importance. before i introduce the panelists, not that i feel they need much introduction, i will say briefly where i think where my sense of where we are in this forum. and the issues we are going whatve to address, both might happen to the economy of policy questions. we will do our best to cover this. we will leave some time for

questions and answers. my sense of the mood in davos is that people are feeling relief in the way that somebody who has just been reprieved from hanging fills a relief. instead of facing the imminent prospect of catastrophe, if there is a sense that things have been done which have eliminated substantially the immediate risk of disaster, particularly in europe, particularly because of the activities of the european central bank but not exclusively so, and that therefore we can start thinking about the slightly longer term. that means at least a few months and perhaps even longer. at the same time as the imf reminded us this week, the prospects for this year of a

pretty bad. they have downgraded global growth in developed growth in particular very significantly. it is down to 3.30. with the eurozone now expected to be in recession, the long story of difficulty in the developed world, what i think of as the great deleveraging, which is now falling a financial crisis that began 4.5 years ago. we have been in with the current crisis and now increasing concerns about sovereign debt, a particularly in the eurozone were the stress has been very extreme.

that is one part with a downgrading of growth. that is one thing madam lagarde refer to as inflicted wounds. at the same time, i would like to remind to of one to six -- one or two statistics. if you go back to october 200011, -- 2011, and you look at the forecast for 2012 and converted back to a 2007 base, and that is just when the world economy was moving into crisis, and ask yourself what has happened, you will discover that according to the imf forecasts, over that period, china will

expand by 60%. the emerging countries would expand by 50%. the emerging world will develop by zero. this five years has seen the most extraordinary and unprecedented speed of transformation. in addition to this great deleveraging, if there is this great convergence. this is obviously what we want to focus on. with that introduction, let me introduce you to the panelists on the far left. they have been a frequent member of the panel.

next to him as the governor from canada who is also now chairman of the stability board responsible for the regulation of our financial system. next to him as deputy prime minister -- is this not working that i had no idea. next to him is deputy prime minister ali babacan, who is of course responsible for economic policy in turkey for a long time. next to him is christine lagarde who has previously been on this panel. she is now managing director of the international monetary fund. next to her is donald, george osborn, and finally minister

furukawa who is the minister for national policy of japan. for some reason, there's no representative of the tourism government on this panel. -- of the eurozone government on this panel. i do not take it personally. i am than going to start off with you, christine lagarde. if you could set out how you and the fund now see the world and how concerned you remain despite some of the things improved about the world economy in 2012 and the issues that confront us. >> thank you very much. does this work in? great. you have asked us to focus on solutions. i will try to do that.

no one is immune in the current situation. it is not just the eurozone crisis. it is a crisis that could have a collateral affect a round the world. we will hear from others. what i have seen in numbers and in forecasts is that no country is immune. everybody has an interest in making sure this crisis is resolved adequately. i would say that now is the time. there has been a lot of pressure building in order to see the solution come about. i would like to refer to church hill who said that we have the tools. we must do the job. the imf is one of the tools. focusing on solutions, i would

like to address the european current situation, particular the eurozone. what other countries need to do as well, it is not going to rely exclusively on one single region. the imf sees three necessary solutions to the current situation. the first one is about growth. growth of the critical for many reasons to deal with the job issue to deal with the fiscal consolidation. there has been pretty much zero growth. it growth has been on to components. the first one is a combination of liquidity so that banks have

sufficient liquidity. more importantly, it is a decent firewall. there is work underway. the eurozone numbers did a lot of a simple fire wall that can operate both to limit the contagion or to provide this sort of trust in the eurozone so that the financing needs of that zone can actually be met. the second aspect that will actually build growth is obviously competitive business. competitiveness is a very important factor that need to be tailor-made in customized to the country. as is this book consolidation.

-- as is fiscal consolidation. we're not saying it should be across the board without specific treatment adjusted to these specificities of the country. some countries have to go full speed ahead and do that consolidation that is so needed. other countries have space in .ooms and can do it pinnipe they should explore what they can do to boost growth in their respective courter in order to help themselves and to help the rest of the zone. just like competitiveness has to and to theade demand, the equally the fiscal consolidation that is needed needs to be customized to the

country cannot be across the board. otherwise it will strangle the group that there could be. that is as far as the growth component that we see as a necessity for europe is more integration. i will be happy to repeat it. the year is selling needs to have this fiscal consolidation compaq that is on the work. is to be validated on monday. it is a process. i certainly agree with chancellor angela merkel that it is thought they sprint but a marathon. it is on the way that it needs to be deliverable. turning now to the u.s. and japan. this cannot be all about europe. the eurozone has to do important things very quickly. turning to the u.s. and japan,

it those two countries are running higher than the year is done. they run very high debts. completely different structures depending on the u.s. or the eurozone. those countries have to anger in the medium term what they're going to do about this deficit in the past few years and how they're going to turn around the debt project. emerging market economies and those that your in a surplus situation, but they have to continue what they have began to do, it to read concentrate on the internal markets and the domestic consumption rather than rely too exclusively on exports and investment. it could apply to advanced economies. that is pretty much what can be done by the eurozone in particular, by the rest of the world.

in the interest of been brief and to the point, i have decided to be a little in lipstick. the imf is one of the tools to act as an actor gauger of trust and a proper gauger of -- or of trust and of supplement some of the situation is not in the arizona but in any -- eurozone, but in any country in the imf. in other countries including middle income countries, and there will be needs, a short term for some and longer-term for others. that is the reason i'm here with my little bag to collect a bit of money. thank you. [laughter]

>> this is not a plea to the business leaders for a philanthropic gesture. i am going to turn now to the governor, how you see the world economy. you're presiding over an economy that seems to be happily in you. some people say that the striking feature of this crisis is all the countries that have recently had crises have managed to avoid a crisis this time. at least two of them are represented here. i would like to see how you see the financial sector more broadly in your present role. resilience has been an enormous concern in the past few months. it cannot have gone away just

because they have decided to provide you more money than before. what is your perspective on where the are? >> in terms of overall outlook, i agree with the imf. this is a 3% growth. it is an eight% china. it is accelerating to a strong pace. importantly is the impact of the eurozone crisis. the impact of europe on global of gdp is about 1% at the end of 2012. we will all feel this. this is in a world where the crisis is contained. containment is different than resolution. why is there the impact? we have europe down 1%. there's also through financial

channels. it to go back to where you started, we are in a great deleveraging. it is very hard to grow economies and the lever and as you are increasing leverage summer else. their only two options in the world, the corporate sector in the emerging markets. i think part of the new here and talking directly to the real economy is there is a lot to do but a great deal of uncertainty. we contributed to that from our respective roles. i will give you one fact or one antidote. the number of potential transactions that ceos are contemplating is also at an all- time high. the actual execution is frightfully low.

if anyone has seen the most recent results would know that. it there are things to do. people are understandably pulling back. you mentioned the ecb. there is not going to be a lehman style of events. this is a difference then having a fully functioning banking system. we see deleveraging effects and a number of key financial markets. in the commodity markets there is a direct pullback of institutions. i think we should be conscious that the majority of foreign upholders are european. some of this poll has directly

affected emerging-market capital. they are getting a perverse flights. the system as much help there as a whole than it was in 2008. capital has increased in all jurisdictions. although, it has increased the least in europe. there is probably too much liquidity being held in the financial sector. those are the positives. in number of structured markets have diminished. the other way their resilience has increased is less positive. the contingency measures that they're taking for the

possibility of a more adverse outcome in europe is holding back their willingness. they are implementing solutions and it will make a real difference in terms of corporate attitudes and the direct supply of capital. >> thank you very much. one of the issues is someone the bankers complain about. they are being asked simultaneously to improve their capital ratios. it is how cohesive and together the policy is for the world economy. let me now turn to you, chancellor pureed you are in the strange position of being the nearest we have to someone that

can speak for the eurozone. [laughter] the irony will not be lost on anybody. you are in the meetings on this. i would like you to think a bit about from your perspective with the u.k. is in this context, what the options for the u.k. are and also where you personally think the eurozone is and what you might add to christine lagarde's indication of the priorities. also, what you think the role of the imf needs to be in that crisis. >> thank you. >> i think people have commented on the mood of this being quite somber. people have also pointed out

that people are slightly more optimistic at the start of the week than the end. that is because they have not been hanged. i think of course that the economic challenges are very self evident to particularly western and european economies and the u.k. is not immune to that. if i were to focus on three things, positive actions that would turn a more optimistic mood into a more outlook for the economy, i would focus on these. first of all, and the eurozone. it is important to recognize that for elected politicians to achieve what has already been achieved, it has been a real act of courage to pull national resources into a common fund to help other countries.

it is controversial. to undertake austerity measures usually get to pick out of office unless you manage it correctly. to undertake difficult structural reforms of labor market is very controversial. a lot of these things have happened over the last 80 months with the eurozone. i think we should credit that. i think more needs to be done. i think the eurozone understands that. i think it needs to happen in the next few weeks. the two things i would focus on is the creation of this fire wall. there has been much talked about. i think it is a key to unlocking further confidence. the second thing which i am not sure that has been mentioned is greece. we are still talking about greece again. i think it is a sign that this problem that has not been dealt

with. there is the inability to deal with specific problems in the periphery causing shock waves. that is including the deal that will lead to a more sustainable situation in greece. these things can be done. the second thing that needs to have been is that policymakers need to gets a grip on the deleveraging process. part of that is a deleveraging of public sector debt. even if you have a high budget, plan can demand market confidence and provide a platform of stability.

the other thing that we need to better understand is the deleveraging happening in the financial system. i like to see more attention over the next few weeks. there is the organization of european finance which has began. they have taken action to protect themselves. how will this be unwound? there is uncertainty this year. it is inevitable after a big banking crash.

we have done a lot of work and looking at how we can better protect our banking system. we have me to the point or we should tell everyone what we want to do. this will provide a platform for investment. i think we need to restore some confidence in the ability of the multilateral organizations to work effectively. we should come on in talk about imf resources. i think this would also be a way of demonstrating that the world wants to help.

it is when the most disappointing features that we have not been able pick of the free trade agreement that we know is a cigna began economic stimulus. it would demonstrate that we are able to take collective action for the common good. in the absence of that, i think it is positive to see more regional trade agreements in the european context and bilateral agreements in the case of akira -- europe. it it demonstrates that we are not retreating into protectionism fed actually moving forward. all of those three things are not things that require acts of god or an indictable forces of nature to deliver.

-- or unguidable forces of nature to deliver. >> let me turn to the issues. let me turn to you now. of very much what he to talk about your own country in the region. there is a ringside seat on the eurozone. i know you have the views on its. event, i know you have views on it. also relevant because you had a financial crisis quite recently. it has coped with that crisis remarkably well.

you have some lessons to teach us as well. what is your perspective on where we are? >> well, let me talk about the current global economic situation. more specifically, what is going on in europe and the eurozone. we want to see sustainable growth, employment, there is one important concept we need to emphasize. that is confidence. when we do not see a medium of confidence, then consumers, they do not spend. corporations, when they do not have confidence, they do not invest and banks do not lend. when this does not happen, the economy stops, financing channels stop. how to regain confidence should

be the core of the policies in many, many countries. for those countries, where public debt is a concern, we do not think fiscal stimulus will work. if a country has already high debt and if this creates doubts in the markets, growth through government spending is not going to work. in the eurozone, there have been some unfortunate trials in 2009. there was an unfortunate result. for those countries where public it is reasonable and for those who have some space, maybe there might be some effort. what is most important here is, about fiscal policies, there is a symmetry. in 2008 and 2009, government for

help. -- governments were helped. when it is time to tighten the policies, it has many costs. it costs the parties in many countries. thinking about the fact that -- it is important to be on the print side on public debt and so forth. keeping the fiscal policy at its current pace, for the countries, it is important for countries to have a clear strategy and communicate the strategy well so it is owned by the masses. if there is no local ownership, the solution will not work. do people understand? do citizens understand?

do they understand the necessity of the steps, the difficult steps, that i needed for the future? having a medium is very important. i have had many discussions. if you are going to talk about growth, it is not just the single year we have a problem with. we have 2013, 2014. some policy action might be hurting growth in the short term. it may generate more and sustainable growth later on. we should probably get growth with a medium-term approach. the government announcing these programs is going to be very crucial to bring credibility about what is going to happen. if the companies do not have any idea about what is going to happen in this year in the

united states, they have doubts about what is going to turn it out in the eurozone. the mass media is protesting this, how do you expect people, companies to continue investment? the banks, they have much liquidity in their hands. there is homer to be done, country by country. -- there is hall more to be done, country by khan -- homework to be done, country by country. more coordinated action is necessary in the eurozone. we hope the physical contact, we hope that works. i think it is necessary to implement this in the eurozone. also, financing has big roles.

an important role to have better coordination of the policies. it is important today, this year, for the countries in the key 20 not to just follow their own national interest, but to think about global responsibility. we are living altogether. if there is a huge collapse anywhere in the world, it is going to hurt all of us. nobody is going to do better because of a series collapse elsewhere in the world. specific to turkey -- we have been very prudent on the fiscal side. we announced a prudent fiscal policy. a fiscal policy to reduce our deficit. many people had doubts. they said, look at europe. everyone else is increasing

spending. the confidence was built. our growth was 9% in 2010, 8% in 2011. we have been tightening things on both sides and also on the banking side to contain the growth, to prevent overheating. we have followed a different path from the rest of our neighbors. we have a different result. >> thank you very much. let me turn to asia. both we will start with -- we will start with japan and asia with you, mr. furukawa. >> i am speaking english. thank you very much. i would like to start with the landscape. we have a low unemployment rate.

we are determined to continue towards the financial stabilization of the eurozone. the government that thing crisis in europe, it has effects on the economy. -- the government debt crisis in europe, it has effects on the economy. we think europe is more able to manage endeavors to calm down the market. japan has been supporting this effort. the major purchaser of esfs bonds, holding 16% of the outstanding issues. japan will collaborate with other countries and parties in supporting action. however, i have a concern that

the crisis may also give a financial edict outside of europe, especially in asia. japan will concentrate its effort to stave off the of growth -- out-growth and commit to sustainable growth. the issues we are facing are not limited to the debt crisis in the eurozone. i would like to point out more common and the underlying issues. this year, we will be tested all around the world because of a number factors. -- number of factors. low economic growth rate, high unemployment rate, and election campaigns.

in confronting these challenges, the japanese government is working on composing a new growth model. there are three elements altogether. namely, social inclusiveness, and environmental sustainability. japan will collaborate with the economies of asia and other countries in this effort. we should pursue this dynamic and inclusive growth because -- last year's occupy wall street and uprisings in many countries are typical. following this, i am looking forward to discussion in the

international community. i would like to comment about japan's fiscal deficit issue. it is important to note that japan's fiscal deficit is an issue in terms of its volume. at the same time, it is also important to note the vast majority of the debt is financed by domestic savings. we do not think the structure will cause immediate crisis. however, fiscal consolidation is a pressing challenge we cannot leave behind. our government has been working on this issue since fiscal year 2010. aiming to have the primary gdp to debt ratio. raising the consumption tax rate in a safe manner and promoting economic growth through implementing the rebirth of

japan. these are key components. >> thank you very much. i am very glad that you brought in japan's fiscal positions. we have had strong positions on this idea of fiscal austerity which a number of people have referred to. i have been in the sessions for 15 years. everyone, someone has been concerned about the mounting tide of japanese debt, which is the biggest in the world. relative to gdp, widespread concern about how long we can go. every year we discovered that the japanese government's rate continues to be around 1%. it is a problem which many other countries would like to have. this is a complicated issue, how

fiscal policy interacts with the economy. getting that situation right is very crucial as christine mentioned early are. -- on. now i will turn to donald tsang. >> according to the latest forecast, asia is born to grow by over 7% in 2012. -- asia is going to grow by over 7% in 2012. china is going to grow by 8% this year. everything is robust, despite what is happening in europe and america. in hong kong, we have a reserve

of over two years pending. things look very nice. i have been in public service, most of which has been in public finance. i have never been as scared as about the world. what is happening in europe, looking at what of experience was in 1980, the crisis we had in the 1990's, this is a very big issue. i agree entirely that nobody is immune. we are all connected with each other. the spread of contagion, the asian financial crisis in the late 1990's, we were left to ourselves. we overcame it. now it is very different.

in 2008, ireland introduced a way to protect banks. two days afterwards, the whole world follow suit. in other words, we are more interconnected than before. in the case of bank exposure, in hong kong, we are highly exposed -- hardly exposed. we checked all of our banks. but, what about the other parties? what about the clients in serious trouble? we do not know how deep this whole will be when the whole thing implodes on us. looking at america, i do not see a good solution emerging. 2012 is a critical year. each one of us have to look at ourselves and what we can do to protect the people of ourselves

and our neighbor. how we are able to secure jobs and go through life? . i can share with you some things we have found. first of all, in the asian financial crisis, we stopped the fire. we did something extraordinary. i went into the stock market, i bought some shares. it was castigated by all of the world. what i did pale in significance to what other people have been doing. what is happening in the world, you need decisive action. that is why i agree with the prime minister of turkey, you need to establish confidence. that must come in the decisive action of government, working together and quickly. maybe two months ago, greece can be settled with a hair cut.

now, 50% is not easy. do it quickly. the second thing we have discovered is, when we dealt with the asian financial crisis, we saw out the banks, the intermediary, the stock market. five years of painful to leveraging took place in hong kong. afterwards, someone who owned a home, it used to be $5 million, suddenly, it is only worth $2 million. it was a very widespread issue. pessimism pervades the society and you have a serious problem. you need to have a quick fix. in the case of this, i think we need to look and not only the funding of banks, but sme's.

we did very well in 2008. we underwrote all of the loans to the banks. we guaranteed, continue lending. making sure they will survive. they did. at the end of the day, the default rate was zero. the government did not put up anything. i gave them the confidence. you must help the poor. help them restructure their loans, their mortgages. make sure they are able to pay their electric bills. we have got the money to do it. even if you do not have the money to do it, find the money to do it. for that reason, you then have confidence there, you have domestic consumption go in. while we are dealing with these macro issues, the rebalancing of

the economy, the only thing you need to do with the banks and so on. you must make sure at the end of the day, 2012 is a critical year. the effect of that will come after 2012. remember, you have to deal with the people. this is what public service is all about. [applause] >> thank you very much. i think he made some incredibly important points about the fact that somebody like you is that frightened. which i suspect is very wise and shrewd, and very concerned about the complacency about small steps that have been taken.

second, i will put it in a different language, you were at the epicenter of the asian financial crisis. the western world 80 lots of advice, some of which was almost resident relevant -- the western world gave you lots of advice, some of which was almost irrelevant. the western world has succeeded in failing to take its own advice to the comprehensively. it is why we are still in such a mess. for the half years after the asian financial crisis, a jet is recovering tremendously. it is a -- agent is recovering tremendously. it is a contrast -- asia is recovering tremendously. it is a contrast. what is the developing of emerging countries? we have looked at the failure --

how concerned are you about where we have got to, what should we be thinking about for this year? >> thank you. i figure, at this point in the panel, i think we have set out the issues very well. i want to try to offer a different perspective. first, when i was at the g. 20 -- g-20 summit in november, i watched as the emerging market heads of government were observing the european heads of government. it was quite striking. this was right after one of the european summits where it looked like there was progress. you had the call for the greek referendum.

the heads of government were in turmoil. the market leaders were watching with feelings that seemed to be a sense of confusion, then frustration, and then, some sense of overall disdain. one aspect is this has got to have a fax on influence, perceptions of power in the world that are going to be quite significant for years to come. the second observation builds on what the deputy prime minister and donald tsang mentioned. a couple weeks ago, there was one of the first of a deputy meetings. well many topics were discussed, i will share with you the major takeaway i had. the american markets are saying, we encountered this problem before.

many of the developed countries urged us to take difficult reforms. we took difficult reforms. they are painful. now it is your turn. get on with it. that leads to the third point, whatever we see come out over the course of this year and the next years, the world is never going to go back to the way it was. u.s. statistics started out with the second point showed the significant -- your statistics started out with the second point, showed a significant shift. what i see is emerging markets' are not waiting -- waiting for the developed world to get their act together. they are not looking to europe or japan for solutions. it is an open question of who

will be the examplars in this system. it is not the germans. it is an open question that relates to the last point. what i perceived occurring, as you mentioned, you may be in the fourth year of this process. there is a danger. there is a fatigue that is starting to run into the political system. people are scared. there is anxiety, joblessness. you can see the creeping populism, home country bias, the sense of separation from the system. in addition to finding examplars, they are going to have to play a role in trying to move a cooperative process forward. some of the side discussions i have had with business people, it is quite striking. there is no absence of resources. there is a lot of capital to invest.

frankly, some of this populism, anxiety about the future of investment affects the confidence and creates the danger of paralysis. i think we _ the key point, what i picked up in a few days i have been in europe, i am glad the ecb took these actions. you still have to act. >> thank you very much. this has raised an enormous amount of questions. let's get a start by looking at the eurozone a little bit more and the question of fire walls and where they fit in. i will address the question to lagarde. i know there are others who have thoughts on this. let me look at it from the point of view of the emerging world. they are told that the imf needs an increase in resources.

it is clear that this is related to the eurozone crisis. the question arises, why should port countries, which have been well managed, accumulated large reserves, contribute a large amounts of money to support a zone which seems to be unwilling to support itself? >> thank you. four points to respond to your argument. first of all, no one is immune. there are a lot of countries. low income countries, nor middle income countries. we have never been so interconnected. number two, as much as an investment, it is also a statement of confidence. 3, if it is big enough, it will

not get used. the same is applied to the roh fire wall. number four, if it was ever used, it is a safe investment. why? because the imf is a secured creditor. it has always been paid back with a return on investment. the reason is because it has significant reserves. i have to hold 20% of reserves. and, we never lend without conditionality and without thorough follow through to make sure that each and every installment has consideration in terms of improvement of the situation of the country that takes it back to the market so it pays back the imf. i hope i have convinced the.

>> i am going to see whether you have convinced the panel. >> let's go to the european fire wall itself. it starts with a european facilities. i think probably it knowledge, they are in position. they need to be supplemented. >> they are not even functional. >> they are not fully functional. what is the point of these fire walls? we should get to that. the first point i want to make is something you focused on. there should be an acknowledgement that this is about a payment crisis more than a banking crisis and a fiscal crisis. there are issues on the fiscal side, they are more a byproduct of this fundamental issue. as the chancellor emphasized, one of the disturbing developments is even with the

measures of the ecb, the european financial system is beginning to nationalize. there is less cross-border flows. that is inefficient. part of the point of these is to address that. i would say that one of the key elements of this is also providing some certainty on bank capital. it does not have to go in. it could be contingent. i will leave it at that. there should be greater certainty on bank capital so there is greater certainty across the banks. if there is not, in a crisis, as you know, you are restricted. you are restricted on cross- border finance. it deepens the scale of the downturn. that is paramount. the other of his purpose for these fire walls is to provide funding certainty for the

affected nations over a reasonable time period. we are still going to be talking about europe next year. some of these reforms have time to start to bear fruit. the imf, in the context of more european resources, more affective facilities, there is a role for the imf, not just for europe, but to provide some precautionary said indeed for the rest of the world. >> chancellor osborne, if i may ask you about this. what is your view -- everybody i have heard, i have spoken to a number of people, people inside the eurozone insist the eurozone put out more usable money.

there is a sense, there is a risk transfer going on which is unfair. this is one of the richest, one of the two biggest economies in the world. why should the rest of the world come along and do this? there is an additional factor. some people feel that the imf has got itself into a great difficulty. some of the programs it has gotten into. it is not clear if the imf can perform its role within this difficult context. what do you think needs to be done to make it a reasonable to expect a bigger contribution to the fire wall from outside? >> the eurozone needs to provide a significant increase in available resources. i stressed the word significant and available. we need a deployable fire wall

in that sense. eurozone leaders understand that. there are not going to be contributions to the imf from other countries, including britain, unless we see the color of their money. that is a reasonable request. our other request that the imf is not debased as an institution. all the things we admire about the imf remain, the of rigorous analysis, that it helps countries, not currencies. if those conditions are met, britain would think carefully about providing for the resources. i would have to go to my parliament to recommend it. i would be willing to do so. if we accepted that the imf was never going to be there to help countries who had a single currency, it would take the question, why would the countries want to remain in the imf?

it would not be of any use to them. it would also undermine the founding principle of the imf. we should not let people and countries deal with their problems alone. people should try to help those countries. that was one of the lessons of the last great financial crisis. the final point is, i do not think that is the lasting solution. if you are in a single currency, you have to transfer fiscal resources around the country to make good differences in regional competitiveness. ultimately, or all of the reforms that are going to be undertaken, there are still going to be regional disparities within the eurozone when it comes to competitiveness. i think the price of having a single currency, it is that he make good those differences. there are transfers of funds,

whether it is from new york city to alabama or from the city of london to the north of england. those transfers take place. that is how you can make a single currency work. that is one reason britain did not want to join the european the euro having been created, i think they are born to be a feature. >> it is a pity -- did not want to join the euro. but, having been created, i think there are going to be more as a feature. >> when people talk about the size and who is contributing the material for building the fire walls, there is another way of looking at it. the market will look at the nature of the economies which

the fire wall is protecting. if it is protecting an economy that is suffering from a short- term liquidity problem, that is one case. if it is protecting an insolvent economy, that is another matter altogether. no matter how hard, how strong it is. the question is, how are we able to do this? having people look at how this economy will survive in the longer term is not a question of balancing the books and how we can generate growth. you have to find ways in which to energize the private sector from a market point of view and making sure these are a viable concern. in that case, the question of the fire wall would be less significant. [applause] >> one of the big questions is making that distinction in the

case of state. it is going to be difficult to define the borderline between the equity and insolvency. there has been debate around this -- between liquidity and insolvency. there has been debate around this. it relates to what policies are used. countries are liquid but not insolvent. the point is fundamental. it arises in the case of greece, which we are dealing with. minister furukawa. >> i want to imagine, speaking about the role of the imf. i think the most important thing is europe gives ethics. -- effort.

otherwise, i do not think developing countries, they are not so willing to pay more money for the imf, even if the imf is secured in its return. under the condition that europe makes the effort and they make firm actions, then the imf -- in these conditions, including our dependency, other countries are willing to support of the eurozone through the imf. >> the whole financial system is based on a certain fundamental

concept. that is the trust to the state. that is at the core of the financial system and also the corporate functions. when greece started to have problems, the country, it was very important that the default of greece should have been prevented. even psi, we think this is wrong. when you lead a country in the european union default, partially or disorderly, it is a default. it has raised the risk of the whole eurozone. every country has already started to pay for it. now, once that door is open, it

is possible that other countries could go through that. coming back to the concept of confidence, it is going to take years, if not decades, to fix this. i think it is time to show serious demonstrations of solidarity and, within the eurozone, if possible, include other resources. make sure other countries do not the fault. -- default. these are the countries of the modern world. what is needed to be done in every country, it is well known. there is no doubt about what policy action needs to be implemented. what needs to be done is not as important as implementing it. when we talk about fire walls, it has a limit. we can talk about 500, 1

million, it has a limit. when we open the doors for default, talking about a short- term fixed amount of numbers would not be enough to prevent the fire. before the situation gets out of hand, it is very important to keep the assurances of what kind of method is necessary to make sure the eurozone countries should not default. once confidence is taken, maintained, then built up with fiscal steps, measures, reforms. first confidence, and then steps to be taken. the order, i think, is very important. >> there are so many questions. let me focus on one question. it has already come through with cleared the emphasis -- with

clear differences of point of view. austerity, who should have it? how much? how do you manage it? for some people, they are concerned we are in a situation where a lot of the private sector is deleveraging, massively so. there is a whole range of reasons. it is the whole range of big governments, remember, the government's account for half the world economy, all going to austerity together. this is the paradox. you end up with no growth. that is what somebody like me is concerned about. that does not give the the exit strategy. you are very clear that you need fiscal control, you are too. christine lagarde has put a

different of this is. how do you see -- a different emphasis. how do you see the dangers of the collective rush, everybody consolidating at the same time? why do you think this is going to work? >> the issue is debt. we are recovering from a balance sheet recession. let me speak about the uk. i became the finance minister when the country had an elected% budget deficit. it is the highest budget deficit -- had an 11% budget deficit. it is the highest budget deficit britain has ever run since the end of the world wars. countries have had to chase the market, they have seen their market rates go up, saying the problems get worse. they have ended up having to do more austerity than they would if they had set

out a plan at the beginning. we kept the market rates low. it has also prevented a spillover into our financial system. britain is the home of one of the largest global financial centers. the home of some of the world's largest banks. if there had been a spill over from u.k. sovereign debt into our financial system, it would not just that in britain that would have suffered. i think it has provided an anchor. i do not think it is sufficient. i have never argued that the only thing you should do is reduce your deficit. britain was consuming a 50% of its national income in public expenditure. making the tax system

competitive, reforms to education, it is necessary. we have had a painful experience about what happens if you do not secure market confidence. >> you have talked specifically about countries that have room to maneuver. how do you define "room to maneuver?" >> in terms of general principle, i think it was the beginning of 2009. the imf recommended stimulus packages. >> indeed, i remember. it was on this panel for the first time. >> there was a hint that 2% of gdp would be appropriate.

that was a shift at the time. my sense is that, we need to be careful with those podcasted, the general, 1-size-fits-all message. the amount of spending will vary from one country to the other. the message needs to be tailored and made specific to the situation of the country. no one size fits all, it has to be tailor-made, customized to the specificities of the countries. we see countries falling into three categories, the first is that of countries that are in such bad shape or have so much room to tighten that they just have to go for fiscal consolidation, go fast, go deep, if it done. the old system, if you will. bounceback from a hard

prescription. the second category, those countries that should let automatic stabilizers pay off. that is the case for the u.k. the state collects less tax. it spends a bit more. that is fine. that is a perfect track to be on. then you have some countries, not many, i am not going to go through the list of them, i would say there are a handful of them, that have the physical space to actually slowed down the fiscal consolidation without violating their domestic rules. some of them have those in house domestic rules that have to do with fiscal consolidation and a balanced budget. that is what i would define as

the three categories, customized treatment of fiscal consolidation that is needed. >> two very quick points. one of the things that has to be done when making those judgments is to reinforce an environment for business investment. i will use the uk as an example with a focus on infrastructure, the corporate tax rate. these are the things that help unlock that business investment. that is important. let me draw attention, we do not have a representative of the u.s. on this panel. we have 2.5 percentage points of fiscal drag built into the united states. in an environment where you have a central bank that is clearly

down for a long time, that is purchasing assets, one has to question the wisdom of having that level, starting january 1, 2013, two 0.5 percentage points down. >> i am going to turn it to the floor. we could go on for many more hours. i am going to give the opportunity to ask questions. if you would stand up, say who you are, a very brief question. >> larry of "the guardian." there are many people -- young people without work today. how serious of a problem is this? what should be done about it? >> it is much more than 75

million. i will take two or three questions. the person in the front row. a question for mrs. lagarde, the comments by the governor and yourself. he spoke about the balance of payment. you spoke about competitiveness. if you put the two things together, there is a year of crisis. one has to face it. there is a lack of competitiveness. this means that when the euro experiment was started, if you want to think about confidence in the market, do we have to think we can make it an optimal currency area?

the governor said, without the fire walls, it does not matter. >> ok, let's get one more question. somewhere in the back. >> thank you. i would like to ask tsang view on whether the ec be should participate -- ecb should participate on the great care cut. >> who was the of the person you wanted? >> the chief executive. >> good question. i will ask bob zoellick first. 75 million young people unemployed. it must be far more. it is a central issue in what has happened in north africa and

the middle east. it is a central concern for you. from your perspective, the world bank, and more widely, how important is this issue? what should be done about it? >> it is important across a range of things. what we have seen is that people do not get a good start in terms of employment and skills, that can affect them their whole lives. this is an underutilized resource. there is a specific issue that we are dealing with about the school to work transition and some of the skills development that will be part of this. all of this is part of the bigger issue that some of us have been trying to draw out. it is not enough to muddle through. it is not enough to get liquidity to the system. it is not enough to do the

physical fix. there is another term --: you have heard here. -- tone you have heard here about the structural reforms. if you are going to do fiscal consolidation and structural reforms, it is helpful to have some growth occurring. there are different ways it can occur. there are other aspects that are related to open markets and trade. removing some of the impediments to growth that we see in the private sector, there are resources to be deployed. >> part of the point here, a big point, policy has to be much more in the run. we are so focused on fiscal and financial problems, we are missing that. >> one other point in this. i almost said it. europe is so focused on the eurozone. as you have seen, we have tried

to organize support for south is than europe. some of these are european union countries. we got information that verified what i have been worried about. you are born to see a credit contraction. you have big event -- you are going to see a credit contraction. you have big events in north africa. we are seeing it in trade finance. i do think there is a little bit of myopia. some of this goes back to hug you implement the banking regulation. the european banking of -- back to you employment the banking regulation. the european banking authority's approach did not take this into account. >> two quick points. one was raised, a member of the trade union.

should central bankers to clauses -- take losses when they acted as lender of last resort? the second question, is the regulatory system, of which you are a central part, providing a confused message, closing doors, making the banks resilient? >> on the first question, part of the spirit i took from donald tsang's remarks is, get it right. what is important with this, what comes out of the discussions is it is credible. the size of the head has to lead

to a credible that sustainability -- of the haircut has to lead to a credible sustainability. full cooperation from the public and private sector, the question is, how should it be done for the public sector? it will not surprise you that fiscal decisions are the responsibilities of government. monetary decisions, central banks. it is better to sort these things out. they may be needed to sorted out -- to be sorted out in real time. the capital rules are out there. the definitions are there. banks know what they are. those countries have done so. anyone else should speak now or hold back. capital is a question of taking time to get there. the second clarity which we

should establish is clarity on resolution and too big to fail. i am not sure we are going to get there. we should get as far as we can and make it clear what is left to be done. we need to get back to being absolutely clear that there is a tremendous value to open markets, cross-border market. the global cross-border markets. there is important plummeting -- plumbing we are doing in derivative markets. we need to think about the implications with respect to proprietary trading, shadow banking, the net impact on cross-border flows of capital which is going to be important to get the global economy up to 4% or 5%. >> the final question. are we trying to turn the eurozone into an optical area?

if so, is this a viable prospect? can i ask christine lagarde what her view is? you mentioned competitiveness. competitiveness is a relative not an absolute concept. we are saying that some people to become competitive relative to other people. we know who we mean. are the other people prepared to accept becoming less competitivene? >> everybody has to be more competitive. i know it is a relative issue. the measure against somebody else. >> everybody can become more efficient. everybody cannot become more competitive. >> everybody has to compete to

be more efficient. that is what is needed. it is not something the imf can control or encourage. our programs are short-term and they deal with balance of payment issues. i can see your point about our current programs. given the length of time, it is going to take some of them to compete for more efficiency. we cannot give up on that either. it is legitimate that the imf continues to be involved as a gesture, as a statement, from the international community, and with the tools it has, to be on the ground, to make sure there is delivery and implementation of some of the conditionality is that are imbedded in our program. >> chancellor osborne.

>> we all except the struggle reforms are necessary. -- accept that structural reforms are necessary. competitiveness, this is not going to be fixed in a few months. we are talking about multi-year reforms. >> i do not think they are ever going to be a sufficient. you are going to make it work in the long term. there are going to be fiscal transfers. that can be done in an opaque way through a central bank. it can be done in a semi-opaque way through eurobonds. or it can be done through budget transfers. that is what is required to make a single currency work. it is not an easy thing to deliver politically.

it is an essential component. >> minister furukawa. >> speaking of competitiveness. i think it is very important that each country tries to strengthen its competitiveness. globally, competition is very important. sometimes, countries trying to make use of -- they devalued their own currencies. they are trying to improve their competitiveness. it is not a fair competition. not to use the currency policy as a way of increasing your

competitiveness. >> i cannot imagine this as directed at a country, but it just announced a zero rate up to 2014, which will mean seven years of free money. i think it is important we take one incredibly short question from one person. if anybody has a question or we will go to the audience. a very short question from one person. >> hello. the world has about 7 billion people. the advanced region -- europe, america, japan -- collectively have under 1 billion. on what the imf -- to know what

the imf leadership is pressing for 2012 for the further regions of the world. what are the policies for them? >> i will give them one minute to answer that question. it is in a sense of the most important question asked. >> psalm to cut -- some two- thirds of global growth is coming through those areas. we are trying to emphasize that. because of the risks, we are trying to do what ever we can to develop lessons from other countries about effective social safety net. there has been tremendous success with the mexican and brazilian model. we have extended it to 40 other countries. some need other alternatives. that will be important for food security, clothes, and things

that could happen. third is the continued -- to continue the structural reforms that help make the private sector possibilities in emerging markets. if you are thinking about allocation of capital to produce growth in a global system, this should be the bright spot. >> we have to conclude with remarks about what is being sent -- said and done on the free market. it has been a very rich discussion. i would have liked to have gone on longer. one of the things that comes out of this is the world economy is iswing, the arieurozone still a concern. it is very important to remember the great thing that has made a difference to the perception about the changing monetary policy in europe -- the

u.s. is doing this again. ever since the beginning of the crisis, we have used central banks in an unprecedented way, completely unprecedented way. it is incredibly important to understand that as long as that remains the case, there will be a similar crisis. as long as we have this monetary policy, the central banks are telling you it will contain depression. that is what these rates mean. what else would they mean? the second point is a very strong thing that the your eurozone should be help from outside. it has not helped itself enough. in a range of s -- respect, both the short term and long term, and the fact the outside world thinks that way is very very important there is a lot of

discussion about competitiveness, but competition, austerity issues. underneath all of that in the world we are talking about, economist are taking about those concerns. that is with the trade policy issues. everyone is looking for market share by reducing wages and domestic demand, we have enough problems. that is my perception at the world level and something we have to think about. is that we areint living in a different world. i think the west just has not begun to wake up to the significance of this fact. i will make one last very provocative remark, which is i will no we have a different way to recognize this when the it immensely distinguished heads --

brent heads -- of the international organizations on this panel will be replaced by people respectively not european and not american. [applause] i do not expected to happen, but it has to happen. i think we should congratulate the panel. we have had a very rich discussion. i hope we have raised your concerns. do not go away from davos as complacent as some people have become. we have not begun to get through this incredible mess we and the west have created. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> presidential primary voters go to the polls next tuesday in michigan and arizona. up next on c-span, gop candidate

mitt romney campaigns in phoenix. president obama talks about gas prices and his energy plan at the university of miami. after that, house democrats hold an official hearing on contraception hat -- contraception services and health care plans. later, a discussion on the republican presidential candidates and the federal deficit. tomorrow, political commentator, pat buchanan, joins us on "washington journal." his recent books is "suicide of a superpower per "we will talk to russell fine gold about politics and if your's election. mr. fine gold has a new ball on institutional failure since the 9/11 attacks. later, a discussion on higher education trends and democrat -- demographics. our guests are kurt bauman and jeffrey selingo,.

washington journal each morning at 7:00 eastern on c-span. >> republican presidential candidate, mitt romney, criticizes his gop rival, rick santorum. the former massachusetts governor also promoted his new tax plan. mr. romney spoke at a meeting of the associated builders and contractors from phoenix for about 20 minutes. [applause] >> thank you so much for welcoming me here and other members of the national executive committee. i appreciate the chance to speak with you. i hope to have the opportunity to see you this morning and to describe why i should be the republican nominee for president and to earn your endorsement. i would like to have your

endorsement and your support in this effort. i want to step back and talk about my view for the country and what needs to be done. i will go back as early as i can remember, my first school days. this was in detroit, michigan. kindergarten. i remember the room had about 30 or 40 students. each of the parents who send their kids to school that morning believed that if their child was raised with the proper values and got a great education and was willing to work hard, they would have a home of prosperity and security. that has always been america's promise. if you work hard, have an education, at have the right values -- if you have the right to values, you can be prosperous and secure. that promise has been broken in the last three years. you have 25 million people out of work or have stopped looking for work or can only find part- time jobs and need full-time

employment. you have seen home values godown. you see people in who have homes worth less than they all. their mortgages are worth more than their homes. the american promise has been broken. it has been broken by a -- the president's policies have been the opposite of what was needed to turn this economy around. he was proud to say he did not cause the recession. but he did make it worse. he made it harder for the american people to recover from that the economy. sometimes i wonder why that is and why that is so hard for people in the government to understand what it takes to make an economy work. they have never worked in a really got me. -- in a real economy. if you send people to lead our economy who have never had a job in the private sector and expect them to make things better in the private sector, you are expecting them to make things better.

-- you are expecting them to do what they do not know how to do. i spoke to dick armey today. the american dream is not owning your own home. it is getting your kids out of it. [laughter] kids are graduating from college and cannot find a job. this is what has happened. we have a president and the people around him who do not understand how the private sector works. and i do. i remember what it was like to work with folks who had little private sector experience. we face a tough economic time. i wanted to see if we could save money by hiring a for- profit jail management company to come in and run our prisons and jails in massachusetts. i thought they might do a better job at lower cost than the large union companies. i said let's get a bid.

let's see if they can do it for a lower cost than we can. the response was interesting. they said they cannot possibly be lower cost than we are. i said it really? why did you say that -- why do you say that? they said, they have to are in a profit in we don't. i said, i do not think you understand how the private sector and the free economy works. the free enterprise system works because of an incentive for profit. enterprises and individuals have an incentive for profit and they'd buy opportunities to do things better and better at lower cost. that is what makes our economy work. that is why america's economy leads the world. i looked at the president's policies that have been born in -- born of a perspective which has been grown in the halls of government.

-- and not on the streets of america. almost everything he has done has been the opposite of what was needed. look at the regulatory burden he put in place. he gave a speech at the state of union address that said we need less regulation. he had an initiative to reduce regulations and after the initiative was over they had reduced regulation by 0.10%. under this president, the rate of regulatory burden and creased has grown 2.5 times than the prior president. -- has grown 2.5 times than the prior precedent. if i am president, i will say to all the obama era regulations, i will eliminate all of those that killed jobs. those regulations are killing us. [applause] on energy policy, the president says he is for all of the above sources of energy. he makes it impossible to drill offshore for oil. he gets the epa to keep us from

having a reliable source of natural gas. he makes it almost impossible to mine coal and used coal. -- use coal. if i am president, i will take action to remove those restrictions. i will open the keystone pipeline and get oil from canada. [applause] with regard to tax policy, this president's proposals have raised taxes on corporations, obamacare being the worst example. i was with a business a couple of days ago. they make diagnostic tests for people having various forms of testing being done by their physicians. a very substantial company. they are about to be subject to

a new obamacare packs. -- tax. they are looking at a 2.5% tax. the burden on this company is $5 million in new taxes. do you think that causes them to add jobs, to grow their facilities, to add employment? obviously not. this president has added taxes on corporations. that is a big company, a public company. it is taxed at the corporate rate. do you realize how many people work at companies that are not c corporations tax at the corporate rate, but are taxed at the individual rate? they are called "frow it took -- ."ow through companies per they are llc's. do you know how many people work at those companies in america? 55% of americans work at businesses taxed at the

individual rates. what is the president's plan for the individual rate? he plans to raise them. almost 40%. think what that does to employers in small businesses. higher taxes do not create jobs. higher taxes kill jobs. this president does not get how his policies are hurting america. what was my plan for taxation? for corporate entities that are taxed at the corporate level, i will reduce the tax rate. 35% to 25%. that makes us one of the most competitive nations around the world and will be an enormous stimulus for job creation. at the individual level, i will lower the marginal rates by 20%. [applause]

i have to do both of those things without adding to the deficit. i had to reduce the deficit. -- have sought to reduce the deficit. -- have to reduce the deficit. how do i do that? we can maintain the level of progressivity that we currently have. it means the top 1% of taxpayers today will pay the same share of the total tax burden that they are paying today. i will not lower the burden paid by the top 1%. i will lower the rate by 20% for everyone. i will cut back on the size of government. i will cut programs. in massachusetts, we went through the budget and cut back programs we could not afford even if we like to them.

i will get rid of a lot of programs. my test is simple. is this program so simple it is -- so critical is -- so critical it is worth borrowing money from china to pay for it? i have mentioned a few things i would do to help the economy. regulations, energy policy, tax policy. let me mention one more. this is the one you find most interesting. crony capitalism. another policy of the president. brush aside the principles of free enterprise and fair play and tilting the playing field toward the people who financed his campaign. that kind of crony capitalism we have not seen in this country to the extent we have seen it in this administration in history. you can see it through out the policies in this administration. trade policy.

it is a good thing for american jobs to be able to sell goods to countries around the world. even nations like china have figured that out. in the last three years, china and the european nations have individually form a free-trade agreements with other nations around the world with 44 different agreements. do you know how many agreements this president has worked out? zero. why isn't he doing that? why did he dragged his feet on our free trade agreement with columbia and south korea? organize unions did not want it. bowing to them, he holds off on trade. i do not have to tell you all the things he does for organized labor. even before his stimulus went into effect, what did he do the two weeks before the stimulus? he issued an order forcing the government to use only union labor on construction projects.

he goes on. he bailed out the auto makers in a way that did not follow the normal process of bankruptcy, but gave the auto companies to the uaw, the people who supported his campaign. he fought for card check. not getting that he put it -- he put in place labor stooges at the labor relations board. his decision on boeing was one of the most egregious decisions we have seen in a long time. [applause] by virtue of a moving more and more of the orientation of this president and the people who gave them the money in his campaign, the unions -- he flies in the face of what it takes for entrepreneurs and innovators to decide to hire people. i do not think he understands

how these kinds of decisions are hurting the american people and making it harder for our economy to rebuild. -- reboot. the longer it takes for this economy to grow again, the more people in america are suffering. his policies are hurting the american people. what are we going to have to do? we are going to have to change that policy. instead of having a president that bows to special interests, we need a president who bows to the interests of the american people. [applause] i was delighted to hear my introduction regarding the things i did in massachusetts. i did not get as much done in massachusetts with regard to these policies as i would have liked to have. my legislature was 85% democrat. we battled and i fought every way i could.

we had some successes. first of all,they passed a card check law. it was passed and it reached my desk. i vetoed it. despite the fact of there were 85% democrat, we fought hard. we were successful in fighting against this legislation. [applause] we also had restrictions in our government contract. i was able to remove a those. i prevented state employees from receiving government pay while they were doing union work. i stopped the practice of having people going into political action committees with their union dues. if i become president of the united states, i will curb the practice we have in this country of giving union boss is an unfair advantage in contacting.

i will end the government favoritism toward unions in contacting for federal contracts. i will and project-labor agreement. i will fight to repeal davis- bacon. [applause] i did not know that was going to get that kind of response. i would have said that earlier. we will make sure workers in the the country have the right to a secret ballot. i will fight for right to work laws. [applause] one other thing i will fight for is to say, we cannot have union bosses taking money out of the paychecks of their workers to go into a political action

committee that is directed to the cause of the candidates selected by the chief executive officer of the union. that is an un-american practice that has to end. i hope you watched the debate last night. it was kind of fun. i enjoyed it. it was an interesting night. i did not expect what happens. -- what happened. we saw senator santorum explain why it did or voted four things he disagreed with. he said this was taking one for the team. i wonder which team he was taking it for. [laughter] my team is the american people, and not the insiders in washington. i will fight for the american people. -- not special interests. he explained why he voted against the repeal of rights to

work laws. he said it was against this principle, but he did it for the team. he explained why it voted to protect davis-bacon. he explained why he voted for no child left behind even though that was against his principles. they voted to fund planned parenthood a vote that was against his principles. he explained why he voted for the bridge to nowhere even though that was against his principles. i do not know when i have ever seen a politician explain in so many ways why he voted against his principles. i can tell you one thing, f. i am president of the united states, i will abide by my principles and my team will be people of the united states of america. [applause] i appreciate the work you are doing.

i know how hard it is. i do not know any industry that is more cyclical than yours. i have a family heritage in our industry. my grandfather was a general contractor. he went from arizona to idaho and to utah. he went broke in each state. my father told me he went broke more than once in his life. i remember picking up a phone when i was a boy -- i remember listening in to my father talking to his brother. they were talking about paying off some of their father's loans. my grandfather did not walk away from those obligations. he and his sons try to pay off its loans that he could not pay it throughout his life. it is tough in our industry with the ups and downs. my dad grew up as a laugh and plaster, -- a loud and plaster

carpenter. most people have no idea what lath and plaster is. you do not put it up anymore, but you tear it down. my father can put nails in his mouth and spit them out pointy end forward. his skill was something to behold. i know how tough it can be and what of times you are going through. the fact that you are sitting here is a testament to your economic conservatism. if you are not a fiscal conservative, you are not in business. you know how to balance budgets. if i am the president of the united states, i will balance budgets. i will do it by doing the two things i described. one is reducing spending, cutting back on programs and limiting programs, sending some programs back to states. the other way i will make sure we live within our means -- i will grow our economy and get

people back to work. i will lower the corporate tax rate and the individual marginal tax rate, the tax rate that employers to 85% of our people. -- employs 55% of our people. i will and the regulatory burden that is crushing our country. i will open up energy resources and trade. i will crack down on china for stealing our jobs as through unfair labor practices. finally, i will make sure that as we deal with unions -- i am happy to play on a level playing field. i know the american people can compete is time for the government to let the competition began on a level playing field and do not tilt in favor of labor bosses. [applause] and returned to the principles of the declaration of independence and the

constitution. i fear what you are seeing in this country is a move towards the kind of government- dominated, social welfare state you are seeing in europe with a government that rewards of their friends and with -- and crush the american spirit. i believe what was part of the american greatness and part of -- american greatness is the inspiration of providence that when they wrote the death for it -- declaration of independence that they wrote these words -- we are endowed by the creator with our rights, not the state -- among them were life, liberty, and the pursuit of happiness. in this country, we would be free to pursue happiness as we choose. we would not be directed by our government as to how we could pursue our happiness. we would not be limited by the circumstances of birth.

we would not be told we had to join the union. we can pursue happiness as we choose. that principle, freedom, our commitment to life, and our unwavering commitment to the freedom of entry would -- individuals to pursue their enterprises in the way they choose, that brought all the people across the world here. we are an equal-opportunity nation. this president and our -- and his friends or try to turn our nation into one you would not recognize. that is what makes america who we are. if i am. of the united states, i will keep america trooped to the president of, -- to the declaration of independence. i will work with you and the american people and make sure this nation remains the hope of the earth. thank you so

>> mitt romney in arizona today. tomorrow he will be in michigan will laying out his vision for the economy and promoting his new tax plan. live coverage begins at 12:15. michigan and arizona will hold their presidential primaries next tuesday. on march 3, washington state holds its caucuses. on super tuesday, 11 states will hold presidential contests. the following weekend, caucuses in wyoming, kan., u.s. virgin islands, and guam.

for more information go to c- span.org/campaign2012. >> president obama was in florida to talk about his energy agenda. he spoke to students at the university of miami for about 25 minutes. [no audio]

[no audio] >> i would like to welcome you to the university of miami. as a biomedical engineering major, i am at the university of miami that is on the leading edge of health and well-being around the world. they're hoping to expand knowledge and applications in a

wide variety of industries, including the energy sector. i am proud to be a part of this young generation of engineers and students' right here on campus that is leading the way to build a brighter future for energy in our country. we are honored that president obama came down here to the university of miami to talk about the importance of american energy. and he takes a good week to do it. this is national engineers week, or e-week, as we like to call it. the college is hosting high- school girls today as national "introduce a role to engineering de." -- engineering de." -- engineering day." and now, on behalf of the university of miami, students, faculty, and staff, please welcome the president of the united states.

[cheers and applause] ♪ ♪ [cheers and applause]

>> hello, miami! [cheers and applause] is that you? it is good to see all of you here today. i want to thank erica for that wonderful introduction. she said her parents are tweeting. i also want to thank your president donna shalala. senator bill nelson is here. give him a big round of applause. [applause] former astronaut -- and my outstanding friend debora watson. [applause] it is good to be back in sunny florida.

i must say that i do not know how you guys go to class. [laughter] i am assuming you do go to class. it is just too nice outside. in another life, i would be staying for the next weekend tonight and then go up to orlando for the nba all-star weekend. but these days, i have a few other things on my plate. [laughter] .just a few. i have a fascinating demonstrations of the work that some of you are doing at the college of engineering. [cheers] let me just say that we need more engineers so i could not be prouder of those who are stunning engineering.

it is fascinating stuff. i understood about 10% of what they told me. but the work could not be more important. what they were doing was figuring out how our buildings, our manufacturers, our businesses can waste less energy. and that is one of the fastest and easiest way to lose our dependence on oil and save a lot of money in the process and make our economy strong. so cutting edge stuff is being done right here. [cheers]

that is what i am here to talk about today. in the state of the union, i laid out three areas where we need to focus if we want to build an economy that lasts and is good for the next generation, all of you. we need new american manufacturers. we have to have new skills and education for american workers. and we need new sources of american-made energy. right now, we are experiencing just another painful reminder of why developing new energy is so critical to our future. just like last year, gas prices are climbing across the country. this time, it is happening earlier. when gas prices go up, it hurts everybody. everybody owns a car, everybody owns a business -- it means you have to stretch a paycheck even further. it means you have to find even more room in a budget that was already tight. some folks have no choice but to drive a long way to work. and high gas prices are like a tax straight out of your paycheck.

i get to letters every night that i read at of the 40,000 that are sent to me. at least two of them said, you know, i am not sure i will be able to keep my job if it keeps going up so high because it is hard to manage the budget and fill up the tank. a lot of folks are going through tough times as a consequence. some politicians, they see this as a political opportunity. i know you are shocked by that. [laughter] last week, the lead story in one newspaper said gasoline prices are going high and republicans are licking their chops. [laughter] that was the quote, the lead -- licking their chops. only in politics to people

greet bad news. you pay more and they are licking their chops. since it is an election year, they are dusting off their three-point plan for $2 a gas. step one is to drill and step two is to drill and then step three is to keep drilling. we heard the same line in 2007 when i was running for president. we hear the same thing every year. we have heard the same thing for 30 years. the american people are not stupid. they know that is not a plan. since we are already drilling, that is a bumper sticker. it is not a strategy to solve the energy challenge. [cheers] [applause]

that is a strategy to get politicians through an election. you know there are no quick fixes to this problem. you know we cannot just drill our way to lower gas prices. if we are to take control of our future -- our energy future and start avoiding the annual grass price hike, which happens every year when the economy starts getting better, the man starts increasing -- demand starts increasing, turmoil in the middle east or some other part of the world -- if we are to avoid being at the mercy of these events, we need to have sustained all-of-the-above strategy. yes, oil and gas, but also wind and solar and nuclear and biofuels and more. [applause] we need to keep developing the technologies that allow us to use less oil in our cars and trucks been less energy for our buildings and plants and our factories.

that is the strategy that is the only real solution to the challenge. it starts with the need for safe, responsible oil production here in america. under my administration, america is producing more oil today than at any time in the last eight years. that is why we have a record number of oil rigs right now, more working on oil and gas rigs in the world combined. over the last three years, my a demonstration has approved dozens of new pipelines, including from canada. and we open millions of acres for oil and gas exploration. all told, we plan to make available 75% of all offshore

oil reserves, from the gulf of mexico to alaska. earlier this week, we joined mexico in an agreement that will make more than 1.5 million acres in the gulf available for a portion production, which contains an estimated 172 million barrels of oil and 304 billion cubic feet of natural gas. so we are focused on production. that is not the issue. and we will keep on producing more homegrown energy. here's the thing. it is not enough. the amount of oil that we drill at home does not affect the price of gas by itself. the oil market is global. oil is bought and sold in the world market. and just like last year, the single biggest thing that is causing the price of oil to spike right now is instability in the middle east. this time, it is around iran. when uncertainty increases, speculative trading on wall street increases.

and that drives prices up even more. so those are the biggest short- term factors at work here. over the long term, the biggest reason oil prices will probably keep going up is growing demand in countries like china and india and brazil. i want you all to think about this. in five years, the number of cars on the road in china more than tripled, just in the last five years. nearly 10 million cars were added in china in 2010 alone. 10 million cars in one year, in one country. think about how much oil that requires. and as folks in china and india and brazil aspire to buy a car, just like americans do, those numbers will only get bigger. so what does that mean for us? it means that anybody who tells you that we can drill our way

out of this problem does not know what they're talking about or just is not telling you the truth. [cheers] [applause] young people especially understand this. i talked to lee and sasha. you guys are so much more -- i talk to malia and sasha. you guys are so much more aware. the u.s. consumes more than a fifth of the world oil, 20%, just us. we only have to% of the world oil reserves. concern -- which consume 20% and we have to%. that means we cannot rely on fossil fuels of the last century. we cannot allow ourselves to be held hostage to the world oil market appeared we have to develop new sources of energy. we need to develop new technology that allows us to

use new energy and use energy smarter. we have to rely on american know how, young engineers right here, after you who are focused on energy. [cheers] [applause] that is our future. that is exactly the path that my administration has been tried to focus on for years. and we are making progress. that is the good news. in 2010, our dependence on foreign oil was under 50% for the first time in over a decade. we were less reliant on foreign oil than we have been. in 2011, the united states relied less on foreign oil than in any of the last 16 years. that is the good news. and because of the investments we have made, the use of clean renewable energy in this country has nearly doubled.

thousands of american jobs have been treated as a consequence. we're taking -- have been created as a consequence in. we supported the first new nuclear power plant in three decades. our cooperation with the private sector has positioned this country to be the world's leading manufacturer of high- tech batteries that will power the next generation of american cars. may many do not use any oil at all. we put in place the tavis: fuel economy standards in history for our cars and pickup trucks and the first standards ever for heavy-duty trucks. and because our cars will average nearly 55 miles per gallon by the next decade. that is nearly double of what they get today.

[cheers] [applause] i remember what it was like as a student. you probably have one of those little beaters. who knows a kind of mileage you get. [laughter] i can tell you some stories about the cars i have had. i bought one for $500. but by the next decade, you will be buying new cars. hopefully sooner than that. and that means you will be able to fill up your car every two weeks instead of every week. something that over time will save the typical family more than $8,000 at the pump. and it means this country will reduce our oil consumption by more than 2 million barrels a day. that is not only good for your pocketbook. that is good for the

environment. [cheers] [applause] all right, but here's the thing. we have to do more. we have to act even faster. we have to keep investing in the development of every available source of american-made energy. this is a question of where our priorities are. this is the choice we face. first of all, while there are no silver bullets, short term, when it comes to gas prices and anybody who says otherwise is not telling the truth. i have directed my administration to look for every single area where we can make and invest -- make an investment and help consumers ahead. we will look at every single aspect of gas prices because we know the burden that it is putting on consumers. and we will keep taking as many steps as we can in the coming weeks.

that is short-term. but over the long term, the energy strategy has to have the right priorities. we had to have an incentive strategy in place. $4 billion of your tax dollars goes to the oil industry every year. $4 billion. they do not need a subsidy. they are making near-record profits. these are the same oil companies that have been making record profits while the money you spend and at the pump for several years now. how do they deserve another $4 billion from taxpayers in subsidies? it is outrageous. it is inexcusable. [cheers] [applause] and every politician that has been fighting to keep those subsidies and place should explain to the american people why the oil companies should keep more of their money especially in times like this. ."

a century of subsidies to the oil companies is long enough. double that enclave energies that have never been more promising. that is what we need [cheers] to] [applause] . this congress needs to renew the clean energy tax credits that will lead to more jobs and less dependence on foreign oil. the potential of an all-the- above sustained energy strategy is important. miami became the first major american city to power its city entirely with solar and renewable energy. right here in miami. [cheers]

[applause] the modernization of your power grid is one of the largest projects of its kind in the country. on a typical day, the wind turbine at the miami dade museum can meet the energy needs of a south florida home and it helps juno beach. a lot of work is already being done right here. and the role of the federal government is not to supplant this work, take over this work, direct this research. it is to support these discoveries. our job is to help outstanding work that is being done in universities and labs in to help businesses get new energy ideas off the ground. it is public research dollars that, over the years, helped develop technology.

companies are now using it to extract all the natural gas out of show rock. the payoff on these public investments to not always come right away. some technologies to not pan out and some technologies will fail. but as long as i am president, i will not walk away from the promise of clean energy. your future is too important. [cheers] [applause] i will not give up. i will not cede the solar energy industry to china because we refused to make a commitment here in america. i will continue to do whatever i can to develop a resource of american energy. our future -- so our future is not controlled by events on the other side of the world. [applause]

today, we are taking a step that will make it easier for our companies to save money by taking on new lighting systems, advanced healing and cooling systems that can lower a company's energy bills and make them more competitive. we're launching a program that will bring together the nation's best scientists and engineers and the entrepreneurs to figure out how more cars can be powered by natural gas, a fuel that is cleaner and cheaper and more abundant than oil. we have more of that. we do not have to import it. we may be exporting it soon. we're making new investments in the development of gasoline and diesel and jet fuel that is actually made from a plant-like substance. algae. you have a bunch of lg out here, right? [laughter] if we can make energy out of that, we will be doing all right. believe it or not, we could replace up to 70% of the oil we import -- 17% of the oil we

import with few we can make right here in the united states. it means lower cost and more jobs and good for our economy. none of these steps will be a silver bullet. it will not bring down gas prices to more. remember, anybody who says they have a plan for that is what? i am just saying. [cheers] [applause] we will not overnight solve the problem of the world oil markets. there is no silver bullet. there never has been. part of the problem is that politicians pretend that there is and we put off new energy

sources that would make us more efficient. we have to stop doing that. we do not have the luxury of attending. we have to look at the facts, look at the suns, figure out what we need to do. we may not -- look at the science, figure out what we need to do. we may not have a silver bullet, but we have limitless sources of energy, boneless -- boundless intelligence in engineering, and all was can put together these new energy sources. that is the easiest thing in the world -- the easiest thing in the world is to make promises to lower gas prices. the harder thing is to tackle the energy problems. it will not happen in one year or in one term or in one decade, but that is the kind of commitment we need right now. that is what this moment requires. i need all of you to keep at it. i need you guys to work hard. i need you guys to dream big. i need those of you who are a lot smarter than me to figure out how we will be able to tap into new energy sources. we have to summon the spirit of optimism and willingness to

tackle tough problems like previous generations to meet the challenges of their times. to send a man to the moon, to connect an entire world with their own science and our own imagination -- that is what america is capable of. that is what this country is about. history teaches us that, whatever our challenges, all of us, whatever we face, we always have the power to solve them. this will be one of the major challenges for your generation. solving them will take time. it will take effort. it will require a bunch of scientists and the most creative companies.

and it will require all of us as citizens, democrats, republicans, everybody in between -- all of us will have to do our part. if we do, this is in our reach. we have done it before. and when we do, we will remind the world why it is that the united states in america is the greatest country on earth. thank you, everybody. [cheers] [applause] god bless america. [cheers] [applause] ♪ >> the american enterprise institute will host a debate on the economics of clean and renewable energy. that gets started at noon

eastern on c-span3. they will hold their annual winter meeting starting this weekend. later, at the focus will be on state economies and ways to attract new businesses. piquancy live coverage beginning at 10:00 a.m. eastern here on c- span. the house oversight committee held a hearing on whether certain organization should be innocent from providing contraception services. a law student who is not allowed to testify told a panel of house democrats about the challenges in one and can face one access to contraceptives is constricted. can also link to last six oversight hearing at our website.

>> our meeting will come to order. this is a hearing of the steering and policy committee of the house democrats. is my honor to be here with our ranking member on the government reform committee of the house of representatives, congressman elijah cummings, a senior member of the committee, congresswoman carolyn maloney and congresswoman eleanor holmes norton. we are gathered here today with a very special guest, ms. sandra fluke. first, i want to say that the purpose of this meeting is one that i wish that did not exist. i wish in the hearing that was held last week, the republican majority on the house oversight and government reform committee would have heard from sandra fluke instead of hearing a panel of five men.

our colleague, congresswoman malachy put it best, asking where are the women. in this debate, nothing could be more critical than hearing the voices of our nation's women and democrats are prepared to hear from a single witness today, are georgetown law student sandra fluke to disappear -- to be before our committee. she was summoned before the paddle -- before the panel that was summoned last week but the republicans did not want to hear from her. we do today. we are proud to bring sandra before our steering and policy committee to deliver the testimony she was denied last week to stand firm and the cause of women's health, to a lot longer be held silent for its center is a bold and passionate

leader for young women and all women at georgetown and across the country. she understands that this issue we are discussing is a matter of women's health, plain and simple. she has said of the fun lies in this debate at georgetown university law and dedicated her time and energy to the battle of human trafficking and domestic issues and served as those of president and secretary of georgetown law students for reproductive justice. she will continue to serve women and our committee as a lever -- as a leader in the field of public law. it is important as i yield to the distinguished ranking member to inform you, sandra, that following a rejection by the republicans from the panel which the democrats had suggested you as their witness, that we have heard from over 300,000 people saying that we want women's voices to be heard in the subject of women's health and urging the republican leadership to make sure that that happens. having no reason to believe that they will, we're having our own hearing today.

i know you will persuade them with your testimony. with that, i thank you for joining us today and yield to the distinguished ranking member, mr. cummings and thank him for his leadership and the important role he played in last week's hearing. >> thank you very much, madam leader, for most of today's event and thank-you ms. fluke for coming here and giving the testimony you're banned from giving last week. when german issa rejected your testimony, he argued that the hearing was not about contraceptives and was not about women's reproductive rights. he said you are "a college student who appears to have become energized over this issue" and that you are not "appropriate or qualified" to testify and you did not have "the appropriate credentials."

obviously, everyone on this panel disagrees with him. as i listened to the chairman try to explain his position, i looked out on a panel of man. i could not help but wonder what credentials they had to talk about the importance of a bill to the lives of women. in my opinion, the chairman committed a massive injustice by trying to pretend that the views of millions of women across the country are irrelevant to this debate and that is what really offends people. even if they did not agree with you, that is no reason to silence you. that is no reason to deny you a voice in the debate or literally a seat at the table. i thank you for coming here today to finally give the other side, the side of millions of women across the country who want safe and affordable

coverage for basic preventive health care including contraceptives. i look forward to hearing from you today. let me add that i fully understand the religious component of this debate. my mother is a strong and independent woman who commands respect. she is also a woman of faith and has been an independent pastor in a small pentecostal church in baltimore for all of my life. i understand the importance of this issue to all women including women of faith. that is why i commend the administration for the accommodation it made to allow women working at religiously- affiliated organizations to obtain coverage for contraceptives through their health insurance companies to unfortunately, last week, completely one-sided hearing, was not an isolated incident. right now, a nationwide campaign is being conducted at both the state and federal levels to outlaw many forms of commonly used contraceptives. these efforts include legislation and ballot initiatives in multiple states

as well as legislation proposed right here in the house of representatives and the senate intended to outlaw the bill as well as other forms of contraceptives such as iud's. the so-called morality legislation is intended to permit any employer including for-profit sectors of companies to deny insurance coverage for contraceptives that are contrary to their religious beliefs or even broadly to any of their moral convictions. under this legislation, a ceo could decide to ban coverage of the bill for unmarried women employees and could deny coverage for routine prenatal care.

he could deny coverage for prescribes iu8d's in the name of undefined moral convictions. madam later, i am obviously not a woman. i cannot fully understand how central this issue is to the lives of millions of women across this country. i am here today to support their right to exercise control over their lives and their bodies and to make sure that they are never, ever, never, ever denied a voice in this debate. and with that i yield back. >> i thank you, ranking member, for your strong statement that i am pleased to yield to rep carolyn maloney. sandra a fluke is here today. >> thank you, leader pelosi for bringing sandra to this committee and your commitment to these issues that are so important to tens of millions of women and men across our country. when i took my seat at the hearing last week and i looked out of the panel, i could not help, but help " what is wrong with this picture?" there was not one single woman

on that first panel, not one, even though we were there to talk about the needs of tens of millions of american women to have access to insurance for preventive health care including reproductive rights, including contraception. the only freedom that was being debated was the freedom to tell women that they would not have access to family planning. what is wrong with that picture? we should not need to remind our colleagues that 100% of those who can have their health damaged by an unplanned pregnancy are women. 100% of those who die from complications related to pregnancy are women. one other% of those who give birth and plan their families

are women. but, 100% of those on the first panel talking about the access to family planning, the ability to plan and space your children, and preventive health care, there was not one single woman on. that on what is wrong with this picture? we see all too often in congress in state houses and in the super-pacs that are dominating the debate on the airwaves that those who would take a woman's right to choose, those who compel a woman to undergo medical procedures or she does not want or need, those who would introduce a bill on the house floor to allow hospitals to deny pregnant women light- saving care are men. what is wrong with that picture? everything. ."

thank you very much. i am pleased to yield to the representative of the district of columbia who is fighting to have a full vote on the floor of the house but she has a full voice and every subject and takes leadership, congressman eleanor holmes norton. >> thank you very much. i have a vote in this committee and i call for a vote when our witness, sandra, was excluded. it is important to remember how they hearing occurred in the first place. the hearing arose out of a controversy that had two sides, two compelling sites -- religious liberty and reproductive freedom. by the time the hearing had been called, we are fortunate that the of ministration -- that the administration had worked a compromise that in fact allows women to receive their contraceptive insurance while at the same time recognizing the religious concerns of

religiously-affiliated organizations such as universities and hospitals who, under the accommodation, do not have to pay at all for contraceptives which are now to be received through the insurance company and have no involvement with contraceptives. this is very important to bear in mind because in my more than 20 years in the house of representatives, i have seldom seen a compromise that worked out an issue of subject -- such importance to both sides as favorably as this compromise did. the committee appeared to want to exploit the religious side of the issue by excluding the only witness that the democrats requested.

sandra fluke was essentially defined out of last week's hearing. in defining her out of the hearing and having a hearing about only one side of a clearly two-sided issue, the majority managed to define out most american women. the silent majority represented by sandra fluke was not at the table last week.

i am pleased, madam leader, that you have convened a series of the concerns of women can be heard through their representative, sandra fluke this morning that i thank you very much and i know that when we get to the question and answer, we will get to other aspects of this. >> for example, at that time, the minority is entitled to a witness at a hearing. would you tell us, mr. cummings -- >> what happened was that we ask for two witnesses. it was miss fluke and a gentleman and the majority, chairman issa said we could only have one and we said we want ms .fluke. they said no.

we have already said we would not accept the gentle man and we only wanted her so we were denied entry appealed. we then wrote a letter saying would you please reconsider. they said no. >> here we are gathered today and thank you for fighting the fight, in this room which we are happy to have a room but the leadership told us that we could not have a house recording studio and take this public so we thank the members of the press who are here for their resourcefulness with the technology to get the message from this room out which has been barred by the republican majority.

it is amazing what legs they will go to so that they don't have to listen to the voices of women for it we are honored that you are here. thank you for your courage. please proceed with your testimony as you wish, miss sandra fluke. >> good morning, and thank you for calling this hearing on women's health and for allowing me to testify on behalf of the women who will benefit from the accord affordable care act contraception. i'm a third-year student at georgetown law school and i am also a past president of georgetown law students for reproductive justice. i would like to acknowledge my fellow members and allies and all of the student activists with us and thank them so much for being here today. [applause] we, as george town lsrj, are grateful that this represents the nonpartisan medical advice of the institute of medicine. i attended just with law school but does not provide contraceptive coverage in the student's health plan. as restaurants have faced

financial, emotional, and medical burdens as a result, employees at religiously affiliated hospitals and universities across the country has suffered similar burdens. we are all grateful for the new regulation that will meet the critical health care needs of so many women. the recently announced adjustment addresses any potential conflict with their religious identity of catholic and jesuits institutions. when i look around on campus, i see the faces of the women affected by this lack of contraceptive coverage. especially in the last week, i have heard more and more of their stories. on a daily basis, a year from yet another woman from georgetown or other school or who works for another religiously-affiliated employer and they say they have suffered financially, emotionally, and i am here to share their voices and i want to thank you for allowing them, not me, to be

heard. without insurance coverage, contraception, as you know, can cost a woman over $3,000 during law school. for many students on public- interest scholarships, that is practically an entire summer salary. 40% of the female students at george dunlop reported to was that they struggle financially as a result of this policy. one told us of our embarrassed and powerless she felt when she was standing at the pharmacy counter and learned for the first time that contraception was not covered under insurance and she had to turn and walk away because she could not afford that prescription. women like her have no choice but to go without contraception. just last week, a married female student told me that she had to stop using contraception because she and her husband could not fit into their budget anymore.

women employed in low-wage jobs about contraceptive coverage face the same choice. some might respond that contraception is acceptable and lots of other ways. unfortunately, that is not true. women's health clinics provide a vital medical service but as has been documented, these clinics are unable to meet the pressing demand for these services. clinics are closing and women are being forced to go without medical care they need. how can congress consider the important and blocked legislation that would allow even more employers and institutions to refuse contraception coverage and responded that the nonprofit clinics should step up to take care of the resulting medical crisis particularly when so many legislators are attempting to de-fund a dozen clinics?

these denials of contraceptive coverage impact real people. in the worst cases, women and made his medication for other medical reasons suffer dire consequences. a friend of mine, for example, has pauli cystic ovarian central manchester take prescription birth control to stop assessed from growing on her ovaries. her prescription is technically covered by georgetown insurance because it is not intended to prevent pregnancy. unfortunately, under many religious institutions, it wouldn't pay. there would be no exception for other medical needs and under the amendments and the bill, there is no requirement that such an exception be made for these medical needs. when this exception does exist, they don't accomplish their goals because when you let university administrators or other employers rather than women and their doctors dictate his medical needs are legitimate and whose are not, a woman's health takes a backseat to a

bureaucracy focused on police and her body. in 65% of the cases at our school, the mouse students were interrogated by insurance representatives and university staff about why they needed prescriptions and whether they were lying about their symptoms. for my friend and 20% of the women in her situation, she never got the insurance company to cover prescription despite verification of her illness from her doctor. her claim was denied repeatedly on the assumption that she really wanted birth control to prevent pregnancy. she is gay so clearly p,olysystic ovarian syndrome was much more of a priority for our breath after paying $100 out of pocket, she just could not afford her dedication and more and she had to stop taking it. i learned about all of this when i walked out of a test and got a message from her that in the middle of the night, in her final exams period she had been

in the emergency room in excruciating pain. she wrote to me that it was so painful i woke up thinking i had been shot. without her taking the birth control, ms of acyst the size of a tennis ball and run on her coat over yet you had to have surgery to remove her ovary as a result. on the morning i was scheduled to give this testimony, she was sitting in a doctor's office trying to cope with the consequences of this medical catastrophe. since last year's surgery, she has been experiencing night sweats and weight gain and other symptoms of early menopause as a result of the removal of her ovary. she is 32 years old. as she put it, if my body indeed does enter early menopause, no

fertility specialist in the world will be able to help me at my own children. i will let no choice of giving my mother heard desperately desired grandbabies simply because the insurance policy that i paid for totally on subsidized by moscow would not cover my prescription for board control when i needed it. in addition to potentially facing the health complications that come with having menopause as such an early age, increased risk of cancer, heart disease, osteoporosis, she may never be able to conceive a child. some may say that her tragic story is rare. it is not. i wish it were. one woman told us that doctors believe she has endometriosis but that cannot be proven without surgery so the insurance has not been willing to cover her medication, the contraception she needs to treat the condition. recently, another woman told me that it also has the same syndrome and is struggling to pay for the medication. due to the barriers erected by the jurors don't policy, she has not been reimbursed for medication since last august.

i sincerely pray that we don't have to wait until she loses an ovary or is diagnosed with cancer before her needs and the needs of all of these women are taken seriously. this is the masses that not requiring coverage of concert -- contraception sanskrit a woman's reproductive health care is not a priority. one woman told us she knew birth control is not covered on the insurance and she assumed that is how georgetowns insurance handled all the reproductive and sexual health care for women. when she was raped, she did not go to the doctor even to be examined or tested for sexually transmitted infections because she thought insurance was not going to cover something like that, something that was related to women's reproductive health. as one of arrested and put it," this policy communicates to female students that our school

does not understand our need." these are not feeling is that male fellow students experience and they're not burdens that melted and must show. in the media lately, some conservative catholic organizations have been asking what did we expect when we enrolled at a catholic school. we can only after that we expected women to be treated equally, to not have our school create untenable burdens that impede our academic success. we expected that our schools would live up to the jessup would create cura personlais, to care for the whole person, to meet our medical needs. when we told our universe is of the problems this policy creative process students that they would help us. we expected that when 94% of students opposing the policy, a university with respect our choices regarding insurance students pay for completely not subsidized by the university

very we did not expect that women would be told in the national media that we should have gone to school elsewhere and even if that meant going to a less-prestigious university. we refuse to pick between a quality education and our health and we resent that in the 21st century, and one thinks it is acceptable to ask us to make this choice simply because we are women. many of the women whose stories i have shared today are catholic women so ours is not a war against the church. it is a struggle for access to the health care we need. the president of the association of just what colleges has said that just would colleges and universities appreciate the modifications of the rule announced recently. religious concerns are addressed and women get the health care they need. i sincerely hope that is something we can all agree upon. thank you very much. [applause] >> thank you very much. that was outstanding.

let me say from the outset that there are a lot of us men who were consulted when we saw that. i just want to make it clear. thank you for your testimony. you said something but one of the things you talked about was the cost of contraceptives. you said you think it could cost over loss school career $3,000? >> yes. >> many people assume that there are alternatives if you cannot get it through your insurance. can you talk about that?

>> of course, i think it is especially important in today's economy -- many families are struggling with the cost of health care and so many parts of the affordable care act will help especially this regulation. as i discussed, there was a study recently entitled reece"session taking its toll, family-planning taking its toll." i think it clearly demonstrates that these clinics have to cut back their hours, lay off staff, close their doors, and so the safety net that women have relied on in the past is not there. >> i take it they end up doing without. >> absolutely, that is what many women have shared with me. >> chairman issa said you were a college student that becomes

-- that has appeared to become energized over this issue and you were not appropriate or qualified to testify and you do not have the appropriate credentials to appear before the committee last thursday. what was your reaction when you heard this statement about not being qualified? >> i will confirm that i was energized, yes. [laughter] [applause] as you can see from the reaction behind me, many women in this country are energized about this issue. yes, that part was correct. in terms of whether or not i was an appropriate witness, i felt insulted not for myself but for the women i wanted to represent, the women whose stories i wanted to convey to the committee and the women whose voices were silenced that day. i have heard some people point

i have heard some people point out that there were two women on the less primary panel that day and that is correct but they're not women who were there to represent the women affected by this policy. that matters because this is not just about demographics. is about the voices of the women affected by this policy. >> you certainly speak for me and i think chairman issa did not understand why we want you to appear because we were looking for someone to speak for women who want safe and affordable coverage for their basic preventive health care including contraceptives. for the benefit of those who may not understand, can you describe your qualifications for testify about the restrictions on insurance coverage for contraceptives? >> i am an american woman who uses contraception. that makes me qualified to talk to my elected officials about my health care needs. beyond that, i will say that i,

along with the other members of students for reproductive justice at georgetown and so many other activists have been looking at this for years and we have followed the regulations very closely and the legislation and we have done studies on our campus document and the needs of women. this is something we take very seriously and we have studied for quite some time. >> as i noted in my opening, there is currently a nationwide campaign at the state and federal levels not only to restrict insurance coverage but in some instances, outlaw many forms of commonly used contraceptives. if those efforts are successful and prohibit commonly used contraceptives commonly iud's and some form of the bill, it would roll back the clock for women across the country. can you describe the impact would be on you and your classmates?

>> for millions of women, it would be an increase in the number of people who have the medical complications i have been talking about today. one woman came to me recently since this happened and described that teenage contraception to prevent seizures. she has several seizures per month that she does not have contraception to balance her hormones. that is just an incredible intrusion on her life and her ability to manage her daily affairs issue does that have access to that medical prescription. that is one of the huge impact. another impact that is important that we think about is that contraception when it first became available was a revolution in this country and allowed women to enter employment and educational opportunities that had previously not been accessible because they were unable to control their reproduction in the samurai. -- in the same way.

i cannot imagine rolling back the clock on that progress. >> my time is up but thank you very much. i think you have done a great service for many, many women and men, by the way. >> i hope so and i can tell you that my male partner is certainly one of those men who is supportive of this policy. there are many others out there like him. >> i thank you for bringing a picture worth a million words. [inaudible] first of all, thank you very much for being here today and thank you for really being quite courageous and standing up and speaking out. this photograph, you are in this photograph. do you see yourself? >> i am right behind that man's head. [laughter] >> and you are waiting to testify.

i would like to _ part of the -- t of there parr statement the ranking member cummings made in that you were they selected democratic witness for the panel and, according to the roles of the house of representatives, we are entitled to select our representative on the panel. i was somewhat taken aback by the fact that even when eleanor and allies and i were arguing -- and elijah and i were arguing that our witness should join the panel that chairman issa said you were not qualified. i would venture to say that any woman is more qualified to talk about women's health needs across america than any man. again, i said what is wrong with that picture as it pertains in the hearing and i would say

in basic policy. can you think of what was in his head when he said that? i know you are qualified for it i know you are speaking for tens of millions of women across this country. can you think of any reason why he would be so adamant that your voice should not be heard? >> unfortunately, chairman issa's head is somewhere i don't want to go. [laughter] what i have learned from this experience is they say knowledge is power and evidently the knowledge of how this regulation will benefit millions of lives of women's is very powerful and i believe to some it is evidently very threatening. >> let's look at the rule. i see it as very balanced, thoughtful, and fair both to

religion, to women, to society as a whole. under the administration's announced common sense accommodation, churches do not have to provide insurance coverage for contraceptives for their church or their synagogue or their religious establishment. and women who work at non- profit religious entities that serve a greater american public such as hospitals and universities can obtain coverage directly not from any religious institution bought from insurance companies. -- but from insurance companies. to me, the hearing was about women's rights and insurance companies and their right to obtain this coverage from insurance companies. in your testimony, you touched on the fairness aspect of this

and equal opportunity aspect of it. why should one woman working for one university have access to reproductive health care but a woman working for another university not have it? it is a basic fairness and equality aspect. i compliment you for bringing out the examples of young women and a multitude of ways that family planning, birth control, medications help women with other medical challenges. i appreciate your bringing that out. i know that many people may be coming to you. the reaction that leader pelosi gave to her letter, over 300,000 men and women responded across this country, saying that this common-sense approach is

appropriate and fair and equal and that women should have a voice at the table. >> yes, i cannot say i have heard from that many when men and women but i have heard from many, many women thanking me for talking about this and saying how important this regulation will be to them. one woman who spoke on sunday, she and her husband told me about a nietzsche as for contraception. -- a need she had for contraception. they recently had their first child and it has been a few months and since she gave birth, her obstetrician recommends that she take contraception following the birth of that child because, for her as a mother and for any potential child and i carry in the future, it would be very medically dangerous for her to become pregnant again too soon. that is an important medical

concern and that pilots -- highlights something because this woman is 30-years old, married, and she is having children. we should not be judging any of these women's choices about their health care needs. in the case of this woman, she is doing everything she is being asked to by some conservative voices and yet, she still cannot get access to contraceptives because that is a purpose that prevents pregnancy and even that women is being denied the health care she needs. for me, it highlights that some of the issues that have been brought up are blurring what is really at stake here. this is about, for our opponents, this is about limiting women's access to health care and that is why this cannot occur. >> thanks for your testimony. my time has expired and thank you for pointing out the other needs for contraceptives and one that is a basic need is the planning and spacing for your

children to ensure your own health to be able to have future children protected very much for your testimony. >> thank you. >> congresswoman maloney , i thank you for your leadership for the ongoing and coming down during the break from her district in new york to be here, indicating the importance this issue has always been for her. thank you and to our local representative of national significance, congresswoman eleanor holmes norton. >> i am pleased to represent ms. fluke when she is in washington. what year are you at georgetown? >> i may third year student and i will graduate in may. >> you are about to graduate from law school. let me put a question to you. the information that your

testimony reveals today made your appearance at that hearing we had last thursday even more important. it was new information. when most americans think about contraceptives, they think about their own lives and how they are related. they do not have the kind of information you brought forward this morning. i want to thank you very much for putting that information at least on our record and a record of american families. i think we needed to hear it. it is important to remember that we are accustomed to the fact that women live longer today. i wonder if we understand that that is a 20th-century phenomenon. if you were to go into the graveyard of america, you would

be quite amazed with the headstones that speak of the lives of women who typically died earlier than men until the 20th century and fairly far along in the 20th century, at that, from childbirth and its complications. understand what we're talking about and how serious this issue is. the affordable child care act, of course, now covers contraceptives. it is important to also understand that before the affordable child care act, you could have a policy and while every other part of -- if you go to the hospital where most

things having to your health are covered and the insurance companies often did not cover contraceptive health care. incase you think that is something that should be understood, the cost of contraceptives you had something to say about. let me remind everyone that the notion of covering all of what it tends to reproductive health is in itself fairly new. i had two children. there were born in the 1970's. my family paid almost all of the cost of bearing those two children in a hospital. as recently as the 1970's, insurance companies paid a tiny portion of the cost of a normal childbirth in an ordinary

hospital. not until regulations and law changed in fairly recent decades are we now even covering a process that was normal for most women. half of the births in united states are unplanned. i want to discuss that issue with you. what is the cost of tuition at georgetown law school? >> we think it's $40,000 or more. it is $60,000 per year in loans or more for the cost of living and tuition. it is quite a bill.

>> that is just for tuition and most of you are not paying that in cash. >> i am certainly not. >> do you and most of your friends and colleagues and law school intended to practice law? >> we do, yes. it is quite an investment otherwise. >> in order to practice law or use law and other ways, would most young women of your age find it necessary to spacer pregnancies? -- space your pregnancies? >> yes, of course. many women on our campus, the idea they should go without contraception during law school and risk pregnancy while they are in law school is yet another way of asking them to put their education second.

i cannot imagine -- i know a few women who have been pregnant during law school but i cannot imagine how they do that. i think it is not a feasible option either economically or in terms of their ability to balance everything. >> you believe the contraceptive is as necessary as any other health benefits provided by insurance companies? >> absolutely, and especially for young people, it is one of the most commonly used health care needs we have. one woman expressed that if her insurance did not cover this, what am i paying my insurance for? these are young women who were in good health otherwise. this is what they need. >> a young person does not go to the doctor very often. if you are a young woman, it probably has a lot to do with reproductive health.

were you and the other students asking for any subsidy from the university for insurance? with georgetown have itself have had to pay anything for the insurance that you saw to for the university? >> no, our student insurance is entirely not subsidized and that is true of most student insurance. with the new accommodation to these new adjustments to the regulation, even in situations of employers, they would not be contributing their money toward the contraceptive coverage. >> so, let me ask you what is the role of the university? they don't pay and a thing so what is the role of the university in this insurance that you are seeking? >> to restrict access to our health care needs.

i can answer more completely if you like. they place the limits and controls on what type of coverage with an access but they do not subsidize it. >> in your experience, our students to attend the university of many faiths or do they tend to be catholic students. >> there are students of many faiths and that is true of most chess with and catholic universities to provide a high- quality education and students want to go there for many reasons and i am proud to say that on our campus we have university-sponsored centers and student organizations that examine jewish law or groups for moslem students and students of -- groups for mulim students and students of all faiths. thankfully, although students

are welcome but unfortunately, they are all affected by this lack of contraception coverage. >> ms. fluke, we learned also that the insurance companies who will be provided through the affordable health care contraceptive coverage for women do not incur extra cost for this. you have not heard insurance companies pipe up and say what are you doing to us. it turns out that, according to the actuarial tables, it costs and insurance company more if it does not provide contraceptive coverage because of the cost of childbirth and the conditions of attending childbirth. this turns about not only to be a win-win but a win-win-win this will be a windfall for insurance companies. this will provide a contraceptive insurance and it is a winner in this country that we have this accommodation and if i might say so, as a

person who teaches law at georgetown and i did not have anything to do with going to find you. it is the good work of the committee that found do. -- that found you. i can say the georgetown to be very proud of you. you are illustrative of the very high quality of student the georgetown is able to attract and able to attract that quality because it welcomes students from many religions and your testimony here, it seems to me, has been evidence of a young lawyer who is ready to practice and ready right now to offer any testimony we might need at any time in the congress of united states. thank you for your testimony. >> thank you very much and i would add that there are many faculty members at georgetown who, like yourself, have been

supportive of myself and the reproductive justice group and we thank them for their support. it is a frightening thing to speak against the university that provide your scholarships and you are attending. their support has meant a lot to us. georgetown does have an excellent preparation especially for the public interest students and that is why i chose that university. i think that highlights that i should not have had to go without that in exchange for my health care. that should not have been a choice that i was faced with. >> thank you very much i will keep my questions brief. i wish to associate myself with the questions raised by my colleagues and their very valuable statements, especially in light of thanking you and in full appreciation for what you brought to the table today. clearly, a woman should always

have a seat at the table. unquestionably when the subject is women's health. i was very moved by your statement and by the questions of our colleagues. i was reminded of a statement of a wise and respected catholic leader in washington d.c. who once said about catholic education that we educate long people not because they are catholic but because we are catholic. it was an astounding statement. it flies in the face of what is going on here. the question of who is qualified to be a witness raises the question of who is qualified to have a hearing. does that person or chairman of committee have any judgment on what it means to a family to personally and religiously make decisions about the size and timing of their family?

does that person having knowledge, are they qualified to talk about the dangers to women's health and therefore the care of the family to a mom if she and her husband, their doctor, and their god cannot make those decisions? is that committee leadership of the congress qualified to make a decision about how people exercise their god-given free will to take their responsibility and to answer for how they exercise that god given free will? it sounds to me from their not wanting the public record of their hearing to show what this was all about, about women's health and how their decisions were impacted yet, how they are not wanting to hear about it, not wanting to hear about it when it comes to a woman's view

on women's health and speaking for many women. i contend that the leadership of your committee, mr. collins, is not qualified to hold a hearing on this subject because their judgment is very pour as to what their obligation was to the public in the public record on this subject. i would like to take sandra's testimony to the house so we can read it into the records of the full congress can be aware and not barred from hearing from what you so capably have presented to us. it is a lack of respect because when the president first put out his statement, there were those who said we want our religious institutions beyond the church and continues to be respected, the waiver for the

church and places of worship. and then the president said and the administration said that did not extend to other activities of the church and there was all the uproar. the president then, in an unprecedented way, moved quickly to remove all doubt about what the intentions. it was not about separation of church and state. was about women's health. what was interesting about the progression of events is that following that, some of the leaders of the religious community said that they don't want any insurance for any employer giving benefits to any employee to cover contraception. i think that really showed their hand. it was not about church and state, it was about an

ideological point of view that flies in the face of the respect we need to have four women, the god-given freewill that we have to have responsibility for the role that women's health plays in the lives of their families and of our country and the strength of women. i again thank you for your courage to come forward with such clarity about the subjects and i hope it is a source of satisfaction to you that so many people, hundreds of thousands of people, more than we have ever heard from in 48 hours come over 300,000 people saying there should not be a hearing without women's voices being heard. >> that demonstrates how many women and men care so deeply about this issue and how much it means to their lives. >> it doesn't speaks the fact

that this is what the practice is in our country. if an overwhelming number of catholic women of child-bearing age 14-50 or however old you want to go are practicing birth control, then there has to be some message to the church not to expect employers and insurance companies to enforce an attitude that you have that is not accepted by the laity churchgoing people themselves. we have a problem here which you have really clearly presented and answered to in the voice of a young woman in an institution of higher learning that is catholic. i've always thought c capital a smallc, let's hope that is

the case. i thank you and i invite you and my colleagues to say any closing statement they may wish to have four questions. >> thank you very much. i will be very brief. as i said in a hearing the other day, i ask myself a simple question -- if this were a hearing on prostate cancer and there was a lineup of women and no man, i guarantee you men would not have stuck around. they would have said to themselves, give me a break. i just thank you for what you have done. one of the things i have often

said is out of our pain comes our passion. clearly, you have felt the pain. you have seen. you have empathized with it and tried to make sure that you change things. i think there is a story here, a big story. out of your desire and your classmates desires, as students, to make a difference, now you have not only the congress listening to you but you have the country listening to you. that is a powerful, powerful thing. i want to encourage you to do what you do. we will work with you all and try to make sure that women have access to contraceptives and make sure that they have what they need to live the very,

very best lives they can. i thank you madame leader for holding this hearing. >> thank you, congresswoman carolyn maloney? >> i would like to add what is wrong with this picture. a woman should have been at that table, and all of the tables in the country. thank you for your courage, for speaking out, and for your testimony today. >> thank you. congresswoman eleanor holmes norton? >> if we had gone to central casting this morning to find a representative we could not have done better than you today. you have performed another service that is an unintended consequence of this hearing. for the first time, those who have paid attention to this issue now know that the

affordable health care act now covers contraceptives, so women no longer have to pay extra for pills, devices, or other means of contraception. thank you for helping us get back out there. >> thank you. >> thank you. i believe the visibility -- we almost got to thank the chairman for the lack of judgment that he had to create the awareness. it has been hard to convince people that the fight has been about contraception. we have tried to tell people for 25 years that it is about contraception, and they say it cannot be. yes, it is. it is not a subject that we like to talk about in public --

personal, private matters, but apparently it is necessary because people who called this hearing do not seem to know what we know about women's health. thank you for your extraordinary leadership, your excellent statement, and with that commitment, we will take your words to the floor of the house if the conceived, to use the word, piece of legislation reaches the house of the floor. please take the last word, sandra. >> thank you, madame speaker, and to all of you for supporting women in this time of need. i appreciate accolades for me as a spokeswoman, but i would

encourage all members of congress and the public to go online. women have begun posting videos of what they would say had they been asked to testify, posting videos on how this effects their lives. i hope everyone would have a chance to hear from all of the women of america that are concerned about this issue. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> next, a panel discuss it on how the federal deficit issue is playing out in the presidential race then from the world economic forum, a discussion on the global business outlook. later, mitt romney campaign is

in phoenix. president obama and talked about gas prices and energy policy in miami. the american enterprise institute will host a debate tomorrow on the economics of killeen and reusable energy. that is started at noon eastern on c-span3. the national governors' association will hold its winter meeting this weekend. the opening news conference is on saturday. later, state economies and the way to attract new businesses. you can see live coverage beginning at 10:00 a.m. eastern here on c-span. now, a conversation on the effect the national deficit is having on the republican presidential race. we will hear two former members of congress -- alex -- alice rivlin.

hosted by the committee part responsible to federal budget, this is 90 minutes. >> good morning, everybody. thank you for joining us. i am really pleased to be reintroducing power project "u.s. budget watch." the purpose of this project is clearly to focus on the important fiscal impact of campaign promises that the campaign unfolds. last time around, it was a big success. it was heralded by cnn at the most detailed analysis of both mccain'satobama's budget plans. -- mccain's and obama's budget plans. we want to look at all the campaign promises made throughout the campaign to a nonpartisan plans and lookit the

bottom line -- how they affect the deficit and debt. today we are unveiling our first major policy report of this campaign -- primary numbers, the gop candidate and the national debt i should really clarified because it is so important -- non-partisan. our board of directors, many of that -- many of whom are here today, where the leading budget experts in the country. they have led cbo, the fed, the budget committee. all of them look at this from either a nonpartisan or a partisan perspective, but we come together as an organization and see this without a political plans at all. we want to bring the numbers out, make them transparent, provide something for voters to use. let me also tell you what this project is not. today's report is not the end of

the story. all of the campaigns are continuing to develop and fell in. -- and fill in the proposals as they go along. we will work with the campaigns. we were really pleased last time around. we sat down with the campaigns, with their advisers, went through the numbers, a distant all of them, tried to create a useful book for died, and when asked -- at asked about ways to affect fiscal policy. we will be providing other quality reports. one thing we do not do it -- we do not look at the long-term effects of the policy promises. because of the fiscal situation, things like social security reform, medicare reform our risk -- are critically important to the fiscal help of the country.

we will issue a report on the long-term effects, how the fiscal promises will affect things beyond eight years. beyond eight years, what will this look like? another thing this project is not, it is not a mouthpiece for the campaign. we look closely to what they put out, what their policies are, how they describe them, but we really go to the impartial sources to get the score. we look at what cbo has said -- the congressional budget office. the tax policy center is a non- partisan tax center that provides invaluable resources, but for this report and beyond in terms of scoring the tax policies for the campaign. we talk to the campaign's about their own members and bring the score from the outside experts. in many cases, we come up with the own scores from our models as well. we are very transparent. we also have different scores

based on low-debt, medium-debt, and high-debt. this is not a comparison of president obama. we will look at that. but right now we thought it was important to recognize that in the primary, the work is not finished yet. we will continue as we did yesterday tuesday new proposals coming out of the different campaigns. the romney campaign came out with a new tax proposal yesterday. we will bring. obama's numbers into the picture. what we will bring is an apples- to-apples comparison with the time is right. it is very important to recognize that republicans are still building out their proposals. this is our best analysis, our best attempt to make transparent the promises the campaigns have made. you can go through the report

and see what all of the policies on the tax and spending side have been promised. before i jump into the meat of what they have put out, i want to make two very special thank you's to our project director, who has run this entire project and done a phenomenal job of digging into every policy. he is not with us. he is on vacation with his family. he has been invaluable. our ever critical important policy director who has suffered this project and many others with the committee and knows these numbers, knows these policies, and knows the economics behind them better than anybody else. thank you to them and all the other staff. i want to move on to the policy, if we have someone willing to slide. is it me? it is me. we might not be able to move on.

just to back up a little bet -- anyone who is come to these events before our familiar with our unwavering focus on this issue, but why does it matter so much? obviously, the debt is near historical levels. it is well beyond historical averages. it is headed in a dangerous direction. what we decided to do was look at the debt levels. that is important for how markets respond to economic effects and the fiscal situation of the country -- to look at how the debt levels would change over that eight-year period. we start with a realistic baseline. we assume that all of the tax cuts would be extended. this is not our preference, just the realistic beginning.

. we assume that all the tax policies -- realistic beginning point. we assume that all the tax policies will be extended. the sustainable growth rate part of medicare and would be patched. we see the drawdown of the wars. we assume the sequester would not go into place. then we compare all the policies. in terms of how we make this comparison, there are three scenarios and they are based on three critical differences. low debt, after me get back, and high debt. one is the level of specificity of any policy. we score it very differently if somebody says we will cut spending or we will cut spending by doing x, y, and z.

it is great to talk about spending and predict cutting spending and the deficit. the part is to allow the diskette -- allow a discussion. there is so much talk about all of this becoming a mandate on what to do about fiscal policy. i have no idea whether that will be the result of this election. a much as they're being mandate, there will be plenty of promises about what not to do. "i will not do anything that ultimately will have to be done to fix the situation." the more specific a candidate is willing to be about how they would get something done, the more likely it will actually take place. it is easy to say i will cut spending than to specify how it will happening. we recognize those differences. secondly, we look at differences between scoring of the outside credible sources -- cbo, the tax

policy center -- and the candidate's own scores. if there is a difference in how they would estimate something and an estimate that comes from other places, we recognize those as well, giving candidates credit for their own scores in the low debt scenario, but not the others. finally, if policies are left vague -- what would be the timing of phasing something in -- we recognize how the different scenarios could play out. we are going to give them more credit far -- the more specific they are. two other things to take note of that we do not do. we are not able to capture any effects of long-term proposals when they come in this window of time. we will look for other reports. it is critically important that those derecognized. in standard budget scoring, they do not show up in the short term

unless you actually make those changes within the first decade or so. we were not able to capture those here. secondly, the weight the cbo words, we do not look at a macro dynamic effects of tax policy. when you lower the tax rate, it may well contribute to economic growth. we do, however, look at the micro dynamic effects. the behavioral effects. the overall dynamic effects are not captured. the campaigns will say their tax proposals will generate economic growth. that, in many cases is true, but it is not captured in the way we do scoring conventionally. this is just a quick summary of the deficit under all of the candidate's proposals. i would note that there is a lot of talk about balancing the budget, the last cycle of fiscal

responsibility. i would point out that none of the candidates have balanced the budget and nor has the budget balanced under our realistic baseline in the year this was captured. that is reality. unfortunately, we are not in a place where it is likely the budget will be balance in the near term unless there is a very high level of economic growth, but we should not count on that. it is helpful to understand the differences between the candidates, but to understand the focus of moat -- most of this is how to get the debt at a manageable level. how do you get the debt where it is not growing faster than the economy over all? that is the metric a lot of people want to focus on. let us quickly go through the individual candidates and then i will turn it over to our panelists to talk more about fiscal issues in campaigns.

first, look at candidate gingrich. what you see under the three scenarios -- i will focus on the middle line, the intermediate that scenario because it reflect the balance between specificity, policy parameters, and the campaign estimates, which we think it's the best one to focus on. at the end of that time, the debt is likely to be 85% of gdp. under gingrich's proposal, the debt would increase by $7 trillion and the debt level would reach 114% of gdp. clearly, there are branches. it could be higher or lower than that. under all of these scenarios, it would increase the debt rather significantly. you all have the report. it is posted on line. right now we are about to be at

usbudgetwatch.org. you can pull up the report if you are watching us on television rather than in person. we will go through all the specific policies, but focus on a couple from gingrich. a two-tiered tax system, an alternative tax of 15% as a flat tax, which would have a significant effect on at the bottom line and a significant reduction in corporate taxes, which is a significant cut spending -- most of the savings come from block grants for medicaid and eliminating or cutting about 100 programs. there is also a record to social security.

on candidate paul, over all, we find he would actually reduce the debt compared to our standardized baseline by $2.20 trillion. the debt level compared to our 85% starting point would come down to 76% of gdp at the end of the two terms we are looking at. there is only one scenario, the high debt scenario, where he would increase the debt. he does have a tax policies that cut taxes, both costly tax cuts on the income tax, which he would rather repeal and make unconstitutional, but in the interim, he gets rid of a lot of "-- a lot of components on the income-tax. he is very specific on spending cuts he would look at. he would eliminate a number of agencies. specific cuts he identifies out there, make block grants.

go through all the spending cuts, and in most cases, we find that would outweigh is tax cuts. moving on to ken mitt romney -- candidate romney. basically a deficit neutral. over all, in the intermediate situation, we see a marginal increase of two under $50 billion over 10 years -- $250 billion over 10 years. the range of depending on how the tax plan would work -- we will update this proposal are many of the new details that came out yesterday about their new tax proposal -- he offered a number of reforms to the tax code, including income and corporate. many of these are offset.

on the spending side, there would be block grants, cuts in the workforce, cuts in discretionary spending, and we are told there would be more entitlement reform, probably affecting the long term. it would basically be deficit neutral, go down to as low as 75% of gdp, are as high as 95% of gdp. his numbers are tighter than the others we have seen. finally, on candidate santorum's proposal -- there are major cuts in income taxes and corporate taxes under this proposal. they would have a negative effect on the overall deficit impact. at the same time, the candidate does have a significant emphasis on entitlement reform and is the only candidate that start to make these changes within the window. you start to see these changes

become phased in early on and they are more specific about what they would look like. you also see block grants. candidates santorum talked about freezing defense. he identified a number of other cuts. the biggest issue here is he talks about cutting $5 trillion from spending, but does not get specific about where it would come from. the numbers are highly dependent on whether you score that as a cut or not we score that as a cut in our low deficit scenario, not the other two. it is different from cutting the oversaw deficit compared to our baseline by just over $2.50 trillion compared to adding $4.50 trillion. we will see whether it becomes more specific how you fill in those cuts, which would have a strong impact on the bottom line. the range here is in a mode that scenario, that would be 74% of

gdp. high debt would be a 115% of gdp. that would be something to watch. what i would like to do it now -- people can look at the report and we could talk more specifically about the proposals. one of the real benefits about this report, you now have something where you can look at each candidate and see what specific proposal they made to and come taxes, corporate taxes, payroll taxes -- in the spending side. how would they passed discretionary if they could? what specific programs of the put out for elimination? what these would they spend more money on. you have eight voter guide. you have a range of estimates for the saving or cost they would provide. you can look to the bottom line. i recommend everybody understand this is a living, breathing document and will change as the campaigns go forward. in many cases, the details will

be filled out and the campaigns will provide more information. there may be more savings. there may be less. i take it is really useful and important. we hope it is beneficial to people to have a resource of -- an impartial, and non-partisan resource, that will look at the bottom line and keep the focus on specifics during the campaign that we know will have a lot of discussion about fiscal responsibility and here is a way to look at how those numbers add up. i am very pleased we have three of our board members here today, if you all would come up. we are joined today by. board members from the committee of responsible federal budget. two of them are both members of congress, different sides of the aisle, both committed to fiscal responsibility. of course, there is alice rivlin, who is handled -- headed the congressional budget office.

she has been vice chair of the federal reserve. we are proud to have them with us today to lead us in a discussion about fiscal issues in this report, but more broadly, how during campaign season we talk about the policy and how this critical campaign, we think the issues of fiscal policy will uphold -- what we expect to see, what will happen afterward. i looked over to their comments and will have a rich discussion with the audience. -- i look forward to their comments and we will have a rich discussion with the audience today. alice, would you take us off, please? >> let me stress that my views are mine only and not those of any of the organizations which i am so -- i am associated, including this one. i take the committee for a responsible federal budget has done a really single service to

the press, the public, and to the candidates. the proposals at this stage of any campaign are understandably not totally spelled out. you cannot imagine how hard palace had to work to figure out what these proposals -- had to work to figure out what these proposals actually are and how they will affect the budget. this document will give you a clue as to how hard the staff were to make these estimates. but there is admittedly much uncertainty at this stage, alternative assumptions, as maya has pointed out, are necessary. some of the proposals are not primarily budgetary.

my favorite one is ron paul's proposal to end the federal reserve. what is the impact of that on the budget? well, the federal reserve actually makes money for the treasury, so you can say it saves money. but think about it -- if we did not have a central bank, what would happen? none of us know, but the impact of the budget would be likely to be major, but it is inherently unsupportable. it is too much at this stage to ask the candidates to give you finished proposals with all the details. it is not too much to ask that they be fiscally responsible.

i think the questions are ones that the committee put out as principals earlier in the year. they boil -- principles earlier in the year. they boil down to do the candidates recognize the united states but it is on an unsustainable track and we much -- must take steps to stabilize the debt. the new definition is can we -- the new definition of responsibility is can we get to the -- can we get the debt to a it is not rising faster than the economy is growing? that is a common-sense definition. we do not have to balance the budget. we just have to get back to a

situation in which at least the debt is not rising faster than the economy because anybody, whatever your ideology or viewpoint about economics can recognize that a country whose debt is growing faster than its economy can possibly grow is in deep trouble. that is where we are. are they making proposals that risk making the debt problem worse? that is, i think, a major question. are they proposing things that might actually bei am a veterane many serious bipartisan effort to rein in the debt. so i believe that there is no solution to this stabilizing the

debt problem that does not involve bending the cost curve in health care, reining in the cost of health care entitlement, putting social security back on the soundtrack, and raising more revenue from a reformed tax system. i don't expect republicans to propose raising taxes, but it seems to me that one definition of responsibility is, can you reform the tax system, are you proposing to reform the tax system in whatever way you think is best, that at least does not make the situation worse. and on that score, all these candidates failed. they all reduce the revenue available to the u.s. government over time. why is that irresponsible?

it is not realistic to think that we are going to absorb this tsunami of seniors and their need for health care with the revenues that we are on track to have. so i would give them low marks on that score. they don't make serious proposals on the entitlements -- held the entire month and social security that can be scored in this window, this limited, eight-year window. that is not terribly surprising. why is this a service to the candidates? i think it really is. it is saying to the candidate from a non-partisan group, what

you say matters, and this report does not have all the scoring answered, but its main contribution, i think, is going to make the candidates think, am i really proposing something that i could do as president? and am i saying something responsible about it? that is a big service. i expect that in the next week, michael will get angry phone calls from all these campaigns. you did not understand what we were saying and you did not give proper credit for this or that. terrific. that means they are paying attention and that the staff here may have to correct some of the numbers and change some of the assumptions, but it will

start a conversation in a realistic realm that has not been going on before. thank you. >> i want to say thank you for that voice of reality of how something like this works. it is never going to be perfect. none of the numbers are ever going to be perfect. the focus is to put it out there, i should add pressure to do the right thing. reno promises are made in campaigns and we know it is hard to go out there and talk about the real policies that would change the tax code, and those that would raise revenues and reduce spending, but -- particularly those that are specific. when people talk about the tough choices that are required, they will get a positive score for doing so. it will never be perfect, we know that, and i will forward those calls to alice because she would be great at explaining why

it is a service. alice has spent so much time in different roles and knows all the difference sides of budgeting and it is a true national, fiscal hero on all of this, so thank you, alex. >> thanks to all of you for coming. the committee for responsible federal budget has always worked hard to inform the american people about the fiscal promises made by politicians, to make sure that those politicians spell out the promise that with as much detail as we can get from them. this particular analysis, the primary numbers that you received today, is an important but only very initial first look at what the republican candidate, and we will get to president obama later, proposed to get the budget back in shape.

as the candidates flesh out their plans, we will be releasing future studies. the 2012 campaign, which we have begun now, comes at a crucial budget time. it has been explained that our deficit and debt trajectory going forward take us well above any kind of reasonable ratio between debt and gdp. curtly it is somewhere north of 70% and headed toward 100, depending on how the people who are elected in this election react. our target has been somewhere around 60% of gdp to be achieved within a decade, and then of course, trying to lower it

somewhere near the postwar average so that we would at least be in shape to handle emergencies that may come along in the future. the candidates in this election can work on the budget issues and they can show us exactly how they intend to deal with them, or in some cases, they may not. they may simply shout slogans at us for at one another. rick and i have been through this process a few times and in the heat of battle, sometimes the tale gets lost, but we are going to do the best we can to be sure that we bring in all to you. we hope that every american understand that you cannot solve the problem by cutting what we call improper payments or fraud,

waste, and abuse. we cannot solve the problem by eliminating foreign aid or lowering congressional salary. we have to be specific and we have to concentrate on the spending and tax problem that are putting us in the position we are now in. >> there are real ways to get back on track. we probably will not hear a lot of them in the primary campaign, but as we get into the general, we will look more a process reform and detailed. processes always been a favorite subject for response on the federal budget. one of the process reforms is closer attention to a long-term budget. i describe some of our problem and in health care and certain other entitlements, the long- term difficulties need to be

looked at and have to be assessed, even as we work on our short-term budget. we have to start budgeting for the long term with special attention to social security, health care, and revenues. in the shorter term, we have to set goals and establish target to get that deficit -- to get the debt down to 60%, to stabilize that debt and push it down on a declining path. rules are not the final answer because congress has proven itself willing to break all of its rules. but rules help and that point the finger at those who are reneging on their promises. in the long term, we need to aim to balance the budget. it will take time. you have seen in the slide that none of the primary, third on

the republican side get us to a balanced budget in 10 years, even in the most optimistic estimates of what they are talking about. it will take time, but we have to get there. it needs to be a goal of ours. any of these candidates that we are analyzing today, or the president, is going to face a tough for your coming on. nobody -- going to face a tough four-year period coming on. if we do not start now, it is going to be impossible. nobody knows where the tipping point will come. all we know is it will come, and it will come suddenly and relentlessly. the miraculous recovery is going to take a long time. fiscal sobriety exist only at

the end of a long and difficult road. finally, in addition to a concrete plan for spending and taxing, we should be thinking about the processes that got us into this mess and resolve to try to avoid them as we move forward. it is easy for the politicians to make promises. again, the rules are going to figure importantly in the final solution. they will not save us, but they will be a great help to us. thank you. >> it is great on all to be -- a great honor to be on this panel. perhaps i need to make a particular disclaimer, given the fact that i've had a fairly well-known partisan democratic backgrounds of the member congress. my ability to sit here and judge objectively republican running for president may be called into question, but i do so as a

member of this body because i leadership,maya's which brought together a broad based bipartisan group of members to come from different points on the political spectrum, but all of whom believe that deficit and debt are an important issue that has been addressed. as i began to review the proposals made by these four candidates, i looked to this organization of the 12 principles of fiscal responsibility that they hope to be injected into the debate in this campaign as a way of going about analyzing what has been put before the voters. certainly in the primary states that have been engaged so far. first of all, i think the top priority is to make deficit reduction a priority. i think we all know the path we are on is not sustainable. we have heard a good deal from

these candidates about cutting spending, but in fact, as the chart showed you earlier, not much progress, and some significant harm, is done in the way these candidates have made proposals in the effort to reduce spending and reduce debts and to get deficits on a downward instead of upward trajectory. this is partly driven by tax proposals that are largely driven in the direction of cutting further. at the same time in our history, we have a historically low rate of taxation for gdp. we are in the 15%-16% range, spending in the 24% range. that gap has closed. most if not all these tax proposals would widen it.

proposals are easy to talk about in theory but in reality and in detail, they lose a lot of their political luster. candidates are loath to get into details about spending cuts. a couple of them to jump out at me as a budgeteer. newt is talking about this block grant and cutting spending on 100 plus federal programs that are means tested, saving $2.40 million -- to $0.40 trillion over time. this is a very nice idea, but the reality has to be made explicit for the average are being with us. there is the general category of spending called reducing improper payments. all of these candidates seem to have found a way to save $160

trillion over in here. and is frankly an undecipherable way of going about making reductions. ron paul talks about ending wars and reducing on the event in by huge amounts of money, which are completely unavailable in any detail. there is no question that cutting federal work force costs may be a wonderful concept, but the idea that mr. romney and mr. santorum and others have put out in that regard is completely untethered to some sort of specific fiscal reality. there is no detail. and that detail is what the voters deserve. it is also important that we not perpetuate the budget mess.

a number of them have been mentioned in the past year. deficits and debt do not matter. i don't think we are hearing that much anymore. we have not heard it really or perhaps five or six years. it was often cited during the last administration. a tax cut pay for themselves. there is no question that there is some economic growth based on some tax cut proposal, but to have dynamic scoring become an underpinning of how we go about reducing deficits by making people believe that tax cut are actually going to help grow the economy is a canard. there are those that they cutting waste, fraud, and abuse will solve all our problems. we like to put a plug in for that kind of savings. it is ill use sorry -- illusory.

it is a nice phrase. president reagan made it popular. david stockman will tell you how often they came up short in really finding the waste, fraud, and abuse that had been discussed. another one that has really taken on a life of its own is a year marks. there is absolutely no way in which pierre marques, if totally eliminated, would reduce -- in which pierre marques --earmarks would reduce spending. foreign aid is on everyone's list for elimination, but everyone vied for more spending in this category. we talked about doing an end to nation building. that was an important plank in the prior administration proposals going forward, but of course we spent billions and nation-building in the interim.

medicare and social security on the left are often cited and these programs are earned benefits and therefore need to sit by themselves, not be included in this debate. i think we all realize that they have to be on the table and a half to be reined in. there is no way that they cannot be the fundamental to deficit reduction going forward. there is no such thing as a free lunch, and candidates more often than not perpetuate the myth that somehow these kinds of spending cuts, five trillion dollars over five years, as rick santorum is indicating, have no downside, have no cost. the other thing we need to do is refer lank -- refrain from pledges. i want to congratulate steve from ohio for calling for a bonfire pledges. he wants to bring all the pledges that all the organization from left to right require members to run in party

primaries and general elections to sign. they are the greatest impediment to bringing about the kind of bipartisan solution that i think we all know will be required if we are to get over debt and deficit on a downward trajectory. i want to encourage congress and administration and the candidates running on the republican side to get real over the next six-eight months. everyone talks about the train wreck that could occur in a lame-duck session of this congress, when in fact, a number of policies are going to be required to be dealt with, including the tax cuts that would terminate. there is a lot of leverage on both sides, a good deal policy needs to be engaged in. bill and i were talking earlier about the possibility of just a kick the can down the road scenario in the lame duck session, but it will not be long

before the next president and congress have to grapple with these issues. the more specificity, the more willingness to be honest about what needs to be done that can occur in the context of this election will make it that much easier for policymakers to find the solutions that are absolutely essential to get as to where we need to go, which as allis said earlier, is not a matter of balancing the budget but just getting our trajectory in line with economic growth of the country. with that, i would be interested in discussing some of these in more detail with you. >> thank you so much to all of our panelists. there are two things i want to draw out that most if not all be mentioned. the first is on specifics and the second is on the long term. you said some of the specifics

you did not find to be realistic, and i think i am a little bit more charitable or sensitive to how hard it is to get specific, which is why we went ahead and gave all the candidates credit in places even where they were not specific. if you say you are going to cut $5 trillion, we think you should be specific. alice pointed out it is very difficult to expect them to be that specific at this point because of the political reality of how you get beat up for it, and they are just getting started. they don't have local government institutions backing them and giving them support like a sitting president does. when you look at our low debt , three of the four candidates bring the debt down to below where we expect to see it on our realistic base line. it does not bring it down to where it needs to be, but it is

a start in the right direction. part of this is a judgment call for anyone to make. the question i want to ask the panelists is, what can we expect in terms of specifics right now in a campaign. how do you balance the political reality with the need to create a mandate the that going forward, that can look back at what they promise and say i told the people and they gave me the vote of confidence. how do you balance those two? >> i think there are two things. one is how specific do they get, and there you can expect them to please give you examples of what they are talking about. vague notions of $5 trillion which means almost nothing to anybody at thinker not

responsible. you have to expect that they would look at whether in the aggregate impact of their proposal is realistic. i don't think that cutting revenues further is the responsible thing to do, and they all do it. i don't think cutting discretionary spending, whether specifically or not, way below where it is under the cuts that have already been undertaken is realistic to what the american public wants. if you are proposing it, then you have to say, what are we really going to do about federal prisons and air traffic control and national parks and all those things within this total, which is so much more than anything we

have had before. >> these freezes we have already put in place have yet to be felt. the details are still by congresses not even elected yet. cutting discretionary spending a lot easier to do in general and in detail. these cuts will have to be made, but should just later additional cuts on top of those that have already been called for is going to be a lot more difficult than anyone can imagine, including many members of congress who have not been given the opportunity to sit on the committees that actually have to make these choices. but the details are important and we need to get beyond glittering generalities and talk about specific departments and

agencies and functions of government that will need to be reduced. that is an important level of honesty that the voters really deserve to hear. as alice implies, it is the entitlement programs and the revenue side that have to be addressed, and they have to be addressed by both parties, and they have to be addressed honestly. i believe ultimately there will be more consensus than you can imagine in this kind of hot political environment we are involved with right now. >> i think in a primary session , it gets to be sort of a bidding match between the candidates as to who is going to cut more. it is not a season in which we expect or are going to get the

kind of specificity we are going to insist on in the general election campaign. i think when the republicans select their candidates, then the face-off between president obama and the republican candidate will have much better luck in demanding specifics from the two of them. and obviously it will be democrats trying to defend entitlements and republicans trying to defend against tax increases. that is to be expected. the final solution, which most of us here believe has to include both revenues and entitlements, we hope will be some sort of synthesis that only

the politicians can negotiate between themselves. >> i am more optimistic about the pacific of the general election than we have to be, given the history. >> i keep thinking that would not be great if in the general election -- up think the issue is not going away. my observation is that voters are well ahead of politicians in this than they would welcome the realistic laying out of what is going to take to fix this problem. i just keep thinking, would it not be interesting if we had a debate where we basically played out the question to the two main candidates, how would you say the trillions that all the outside experts say is necessary to stabilize the debt? it seems less farfetched to meet

in this election than in the once past that that could happen because there is so much focus on the issue. >> let me make another point about what they might say if they did show up. it would be important to recognize that in that situation, both candidates would know that they were entering a negotiation and they would not be expected to put a final solution and they how far would you go on this or that. they could only be expected to say here is our opening offer. this is what my opening bid would be if i were president. i think that goes to the sitting president, the obama budget announced recently ought to be seen as the democratic offer in a negotiation yet to happen.

>> i think we all regret that the opportunity that simpson- bowles provided was not seized upon by the administration. i think there is a great deal of regret that the worked that was done was not seized upon by members of congress or the administration. i think it was an effort to get back to it in the discussions president and speaker boehner had, but it was unfortunately unattainable. we are now in a dart -- we will not get realistic about bringing together the eight competing points of view. i think it has to happen immediately in november after the election. i think of blueprint for out there and will serve as the basis upon which some agreement will come together. there are not a lot of other options when you look at the things that are possible. all the good work that alice and

others have done in the last year will not be for naught. >> i am not going to give up on it. i still believe that if you put out a full plan, it is very difficult to say here is how would cut $6 trillion in spending if you have to act with that what you would do or how you would do it. when you have to fill in the details, it actually starts to forge the compromise. it is hard to do it on both ends of the spectrum, but we will see. to switch the point that all of you have touched upon, the importance of long-term, and that really is the big theme here of the problems our country faces and potential solutions that really have to look at what is driving the problem. health-care costs is the largest one. the aging of the population is a huge contributor. social security and medicare reform have to be on the table.

everybody is talking for the need of got country and the plant but and, reform has to be a big part of it. but it is difficult to have that reflected in the numbers. our report focuses on the savings less than the first decade. how do we focus on longer-term saving. how do we help cope with so that if you get the longer term spending our fiscal problems under control if it can buy us some more breathing room in the shorter term while we are still trying to have economic recovery takes hold. that is kind of the key problem. >> i hope so, but it has not happened. the thing that seems to be -- seems to be missing from all of the budget discussions is the timing. we don't need to balance the budget tomorrow. if we did, it would be a

catastrophe for the economy, and we are beginning to see in europe the adverse effects of extreme austerity in the short run. what we do need to do is get back on a sustainable track. that mainly mean, as we said several times already, reining in the entitlements so they are not driving that federal spending faster than the economy can grow, and finding more revenue by a reform but tax code. the impact of those major changes will not hurt people in the beginning. you don't want to raise taxes right away it for cut entitlements, but it will take effect over a longer time, and you have to do the scoring for the second decade beyond the 10- year window. that is always uncertain, but

not that uncertain, the idea that you cannot do it. you have to make unrealistic assumptions and then do it. it is quite possible and irresponsible not to think about what happens in the second decade if we don't make changes now, especially in the entitlements, because it takes a long time. >> one of the things i think progressives seem to focus on is the degree to which debt service is increasingly crowding out other forms of spending which often go to the least among us, to children. we have unfortunately, without addressing entitlement reform, and in exorable intergenerational transfer, more money going to older people, less money available to go to children, to the most needy among us. that is the inevitable result of making no policy changes in the

entitlement area and not raining in the debt which increasingly cost us annually additional billions of dollars. i hope progress of can see that that it's an important value that they need to hold high as they enter into this debate and ultimately compromise, and i think we need to reach it on a bipartisan basis. >> i talked about the long-term bit in my discussion. we do need the targets for the long-term, and as we work toward -- through a decade, we need to have enforcement mechanisms that we do not reach the targets, the debt and deficit in each year, there is some kind of penalty or sequester or whatever it takes, that the congress has to accept

or override. that is wonderful to help but get into the debt ability. social security and program that long, we do have a pretty good idea what the long-term outlook is, and that is a matter of mathematics for political negotiation. it is not hard to do, simply having to decide how you want to do it. more importantly is to set those long-term goals and targets and have some kind of enforcement mechanism to help you get there. they will not guarantee you will get there, but that will help. >> it is all really important and we will issue one of our next report looking at the long term. on the budget enforcement mechanism that will be part of any plan, we know that the longer you are making promises,

the harder to know if they are going to stick. i would like to open up to the audience for questions. there should be microphones somewhere, i am hoping. there is one here in the front. please identify yourself and speak into the microphone so the c-span audience and others can hear. >> back to the point about the long term, [unintelligible] in the long term, what is the ultimate optimal deficit? it certainly is not 0. i look at it as a form of foreign, international trade. we are providing a real value to the rest of the world. they are accepting a low interest rate for that. we are providing real value.

the question is, what is the balance? a balanced budget of zero deficit is not a good idea because that takes away liquidity that is healthy for us. what is the optimum deficit? it certainly is not the road -- certainly is not 0. >> all of these panelists are members of of the panel where we spent hours and hours in a room discussing topics just like that. >> my answer to that question is implicit in what i said about the increase in the debt. we should not have a debt that -- we should not have a deficit that is more than 2%-3% that of

our gdp -- would cannot grow the gdp much faster than that. i am not alarmed about current deficit. we are in a deep hole. we have had a deep recession. we need to do the things that will get us out of this recession, and we need to keep on doing them until we recover. but over the follicle, we need to come closer to balance, not -- over the cycle, we need to come closer to balance. over the long run, you don't want the deficit that is growing year debt faster than the gdp can grow. >> my opinion is that in normal times, we should balance our budget and not have a deficit. target of the peterson commission was to take the debt to 60% of the gdp in a decade or

maybe slightly more. and then try to work that debt ratio down to what we might consider to be the postwar average, 40 plus%, something like that. if you could maintain a debt level like that or lower, then you are well-suited for emergencies in the future. as a follow up on your question, i am not sure if that is a great idea that poor countries ought to be financing us. i would like to see us financing ourselves, and then to use their money to improving their own many needs in their own countries.

>> [unintelligible] >> one of the things we discussed when we were debating this issue on the commission what, you want to get it so your dad is not growing faster than the economy, but then you want to get your debt back down to lower levels. part of the critical reason is why we are able to respond, even our deficits were higher than we would have liked, our debt levels were low and we are able to borrow an awful lot of money. you certainly want that fiscal flexibility when you are hit with whether an economic downturn or any other crisis from the outside. right now, we don't have that because of where our debt levels are. you have to bring it back down to where you have flexibility.

every president, when they put their budget out, it is a 10- year budget. it is a good target to have a president who has to offer a budget that is balanced over that entire, 10-year period. you could run deficits if the economy were weak but you expect to have a plan to repay it over time. there is a question right here. >> i wanted to ask about medicare and premiums. i know allis has her own plan. first, a technical question. when the candidates here are evaluated for their support of the rhine and, i assume it's the first plan, which is slightly different. i want ask -- obviously you

believe that premium support is the best way to approach reform. is it the best, and do you see any support for anything like what you propose, what ryan proposes, or any other scheme that would help to reduce the cost? >> when you say premium support is the best, that does not reflect actually what i believe. i think we don't know. the proposal that the former senator and i made it the following. that we keep traditional medicare and we keep the efforts that we now have in the affordable care act to be and the cost curve by trying to figure out whether the most

efficient ways to spend money on health care and introduce new incentives into medicare. but we also taken advantage of the idea of competition on eight federally set up exchange -- on a federally set up exchange, and set up an exchange where seniors could choose among plans that would cover the same benefit as medicare and would compete for their business, and they could choose the traditional medicare if they wanted to. but the important idea here is that the federal government's contribution would be defined

overtime and would be capped at a reasonable rate of increase. that is a very long answer, but it avoids the simplistic notion that you said. i think we don't know whether competition or regulation will be most effective in ending the cost curve, and we need to give seniors the chance to choose. >> one thing i think is really encouraging is that all the candidates have talked about the need for longer-term medicare reform, and embracing the paul ryan medicare premium support plan. we have also been seen different versions of that coming out. alice and peak have a proposal that keeps traditional medicare there. a lot of the candidates -- one

candidate who has been more specific on this is senator santorum, who talked about bringing in some of these cost controls early on. he has been more specific on his support for premium support. we are starting to see that discussion both on the campaign trail and outside in the public discourse. >> the question was whether you see support developing or either of those notions, and perhaps some of you see it in the congress. i do not. >> if i am not mistaken, all of the republican candidates that something positive about ryan, which the thought was very interesting. >> you are going to get democrats to step up and endorsed this, it is unlikely,

but based on the work that alice and peak did, these two bipartisan senators have picked up on, there is a way to the future on this issue. we also have to look at how we deliver health care. we have to incentivize changes in that regard and the best place to start is with the sr de -- srg. it is something that many of our providers have been loath to do. >> health care reform will be the gift that continues to keep giving. one thing we know is that we will not get it all done the first round. we will continue that struggled for years and years to come. it feels to me that it is an issue that is percolating and will be discussed during the campaign, which will help us

move forward on needed reforms over time. >> a question about the idea that tax cuts paid for themselves. we heard a lot about it from republicans during the super committee process. yesterday glenn hubbard said they could offer to cut the tax rate by an additional 20% because there will be all this extra economic activity and the deficit will be fine. can we summarily dismiss this idea, or how should we think about it? >> i think there is no evidence that tax cuts paid for themselves. when you think about how much the economy would have to grow to make up for the revenue of any given tax cut, you realize

that is not realistic, and i am surprised that glenn hubbard actually said that. what is true is, you can show that cutting taxes, but this week from very high rates, can be helpful and increase economic growth, but if that is all you are doing, you are making the deficit larger, even though the economy is growing. you have to say what else happened? do we make the deficit larger? does it put up pressure on interest rates and doesn't negate any gain that you might get from marginally increasing the economic growth by cutting taxes. that is basically where the cbo is on scoring.

they refused to say -- to score an individual tax cuts as growing the economy without thinking about what else happens. they will score a whole budget proposal and give some credit for tax cut and noncredit for raising interest rates or cutting certain kinds of spending to make up the difference. >> there are a lot of things going on out there in the economy and his car really hard for someone to isolate the particular effects of a particular tax cut. all of us who like low taxes would like to believe in supply side formulations that we will get a great deal of revenue kick out of cutting taxes. i think we have to rely on the

estimates of the joint committee and cbo, who are doing the best job they can of the information that is available to them. i do not believe that tax cut probably develop as much as some of the sponsors believe they do. certainly the largest of them are unlikely to pay for themselves. >> in my view, it is wishful thinking translated into political policy. i look at the fact that the revenues at the moment or at 15.4% of gdp. even mr. romney says he wants to bring the government spending down to 20% of gdp. should we not focus on the 4.6% gap that even he would admit

needs to be filled by revenue? instead of talking about new tax cut, which in the current moment are just ephemeral. >> i would just clarify that the main reason revenues are at the level they are is still a hangover from the economic recession. you have to look at the difference between structural deficit and where you are in the cycle. it is clear that you can say tax cuts do not pay for themselves, but we have not -- we have entered a time when people are looking at more fundamental overhaul of to the tax code. the bowles-simpson commission talked about broadening the tax base dramatically and bringing rates down dramatically. when you are talking about great reductions, -- rate reductions,

the result will be economic growth. there are a lot of other variables. how much will it add to the deficit? then all the other factors going on. the problem is not that is the unfair to say there will be some growth from cutting tax rates, it is really getting specific estimates. when you are talking to a serious economist on this, my sense is you can take how they are discussing and framing it quite seriously, that there is a legitimate claim that it would grow the economy but that is different than paying for itself. >> just a clarification for your description of romney's impact on the deficit. you described it as being a

deficit neutral. that is with respect to the committee of the baseline scenario. actually, debt rises under that. i am not sure if it is a neutral scenario. >> the better question is exactly which bass line. anyone who is a little bit exposed to this note that the budget and baseline is one of the more confusing ones. the romney campaign has not told us what is deficit neutral. we assume it is the same kind of baseline that we use. people are comparing -- the scenarios have the debt rising, which is why we tend to look at this metric as debt as a share of gdp. under these proposals, it would

be growing and starting to come back down. we still have to figure out how they are looking at. -- looking at it. >> i am from the university of maryland school of public policy. i am less concerned about the candidates not getting specific about what they will do that i am about them getting very specific about what they will not do. in a way that is not ultimately helpful to getting our way out of this problem. i am interested in whether people on the panel are worried about this and how worried about we should be, and whether there is anything that can be done about it. >> i am very worried about it, particularly on the tax side. taking a pledge that says i will never raise taxes, especially if

it means i will never raise revenue as opposed to tax rates, i think that is a dubious and not helpful kind of pledge to make because as i said earlier, i think is a totally unrealistic that we can stabilize the debt over the long term without increases in revenues and reductions in entitlements. i would be equally worried by a candidate who says i will never cut the medicare program or social security benefits, but we do not hear that from the republican side. but the same response, it is very dangerous if candidates pledge never to cut entitlements or never to raise taxes. we will not get there if they

stay in those positions. we hope their opening bids of g8 it is a dangerous situation. vick just pointed out that would like to burn all those pledges i think we should build an altar to him in every church in town. >> grover norquist love all the attention he gets the never kind of form like this, but it really is across the spectrum. in primaries, people are particularly vulnerable to wanted to pledge their fealty to one calls or another. it can be a committee to protect and preserve social security and medicare. there are all kinds of groups that circulate these things and candidates feel compelled to pledge their loyalty to the golf, but when it all comes to

a point of needing to break down these barriers, it is making it that much more difficult, and we all understand. >> we are terribly worried about that. the one encouraging thing is i do feel like the public understanding and awareness of the issue has increased. we are always trying to discuss whether we can start a pledge to not take pledges, but we cannot climb our way out of that hypocrisy. you do at least get the sense we are moving toward the place where candidates know they have to govern. nobody wants to back themselves into a corner. if you listen to them, when they are trying to keep a little bit of faith, the situation has changed where people are trying not to back himself into a corner. whoever takes office will have

to at least get a start turning this situation around. it is harder if they have made promises of what they will much do to get us there. -- what they will not do to get us there. >> i am bill crosbie. i spent 27 years on the house rules committee. i would like to follow up on the question of the budget process and budget enforcement mechanism. do any of you have specific suggestions that might work better than what we have tried to this point? >> i think we can devise better mechanism that spotlight the target and perhaps shines more

light on the congress when it attempts to renege on its promises, but we know the first thing we are told when we go to congress is that no congress can bind a future congress. if a pitch, ruth the side -- a future congress decides that a previous congress is no good, but can certainly welsh on them, and they do with some regularity. if they are made prominent, if the targets are well understood by the people, i think it will become more and more difficult to welsh. you have to make the enforcement such that it is not to stern. if you make the penalty to tough for not meeting the target, and congress can be

expected to try to avoid it. it also have to anticipate that there will be times when it is necessary to avoid its, at a war, for instance. i think we can make it better, but there is no way to make it perfect. >> i am more concerned about fact that we have no budget process. we don't have an appropriations process that works. we simply have stopped doing even the reconciliation bill that used to be done periodically because somebody wanted to pass a tax cut with 51% of the senate. we have let the whole process deterioration to the point that a highly partisan and toxic environment on the hill has made it impossible to function even in the most basic ways, let alone proposed rules and regulations that would make it more difficult to avoidgimmick .