>> coming up in 45 minutes, remarks from christine lagarde, head of the international monetary fund. that organization has agreed to lend money in exchange for her financial reforms to help europe through its financial crisis. she will speak to the american society of news editors and the associated press. that will be live at 10:45 eastern on c-span. coming up this afternoon, more from that event as president obama delivers the keynote address. he will talk about the 2013 federal budget as well as the house republican plans the past in that chamber last week. he joins every president since calvin coolidge in addressing the american society of news editors. you can see it live starting at 12:30 eastern on c-span. tonight, "road to the white house" coverage continues with primary results from wisconsin, maryland, and the district of columbia. we will bring his speeches from campaign headquarters and

simulcast the coverage. you can join us at facebook.com or twitter guest: >> this past weekend, little rock, arkansas, with booktv at the university of arkansas. >> collected photographs, but particularly interested in the 19th century. these are two friends, union and confederate, who knew each other prior to the civil war, who fought against each other in 1862, survived the war, came out alive, and remained friends after the war, and here they are at age 100. >> american history tv look at

life at a world war ii japanese internment camp. >> wonderful book called "the art of gama." "gaman" meant surviving the un survivable. art was a way of surviving the insanity. there was a high incidence of suicide. people would make these little things of beauty to give to each other just as a way to say "we support you, we care about you." >> our cities tour continues the week of may 5 and six on c-span2 and 3. >> remarks from the head of the international monetary fund coming up at 10:45 eastern. until then, a discussion on the federal budget proposal on this

morning's "washington journal." guest: i represent almost 615,000 people who happen to live in the district of columbia. host: right. that is the point, to bring up. many of them are federal government employees. -- whatn and's budget would be the impact on federal employees? guest: any time did any money, the piggyback is close at hand -- federal employees. the federal employees have given almost $70 billion to the deficit.

they are likely to continue to downsize, and this budget, of course, makes sure that that happens, and that i guess the pensions -- that it is the pensions and pay, furs and yet again, continues with federal employees and just the district of columbia, but the entire maryland and virginia region, full of federal employees, who contribute to the local economy. host: what about the argument that we cannot afford to continue the way we have been doing business? program and agency needs to take a cut. guest: every program needs to take a cut, that is indisputable. the question is, do you want them to take a disproportionate cut relative to others and leave

the tax breaks for the richest americans and a place and give them more tax breaks on top of that? if this is evened out so that everybody conference to deficit reduction, there will be a thing that federal employees and said if you continue to go to federal employees and you don't go to those who have benefited most from the economy over the last decade, of course of federal employees have every reason and every right to say "don't come to us every time and not go to others who are in much better shape than the average middle- class federal employee." host: what does president obama say about federal employees and the federal government? and do you agree with everything in his budget? guest: president obama began this cycle and before budget discussions ever got underway,

last year freezing the salaries of federal employees, adding to that -- the objection of a federal employees is that the president should have waited until they got into budget discussions so that everybody could have more easily understood how much they would contribute. just like when you go to church and the richest guy hangs back when at they or passing the collection plate. most people will say, "what about him?" host: you did agree with the president's budget when it comes to federal employees. guest: it is not that i disagree with the president's budget it is more evenhanded than the ryan budget. i disagree with the budget where it takes more from federal employees than for others.

it is more in line with what i perceived that the ryan budget. they come to federal employees, come with pensions, creating something of a two-tier federal employee system, which is very, very serious, the first time in american history that you have, when it comes to pension two tiers. the president is spreading the misery and that is all federal employees are asking. host: yesterday paul ryan was at an event with mitt romney and he had this to say about president obama's budget. [video clip] >> the president has given us four budgets and four times yes gi -- he has been complicit with the idea of giving us trillion dollar deficits, taking more from small businesses and

small families and to spend more and put us deeper into debt he seems to partake of this philosophy that if we give more power to the federal government, more power to unelected bureaucrats, they can organize our lives, or as our economies, run our businesses seamlessly, make society run better. it is is the loss of the they have been pursuing a long time -- this loss of the they have been pursuing a long time. guest: what the president is doing -- this is a very important point, one that is overlooked -- at the time that government almost defaulted because some of my colleagues on the other side were reluctant to raise the debt limit for the first time in american history, a deal was finally made it and did not go into default.

do note, however, that because of that unprecedented -- really nothing like it in american history -- debate, one house took down the aaa rating. at that time, the budget deal was reached, ryan, paul ryan, has walked away from the budget deal. the budget deal said that for the next two years, this was the baseline that both parties agreed to for federal spending. instead, to please what appeared to be the tea party republicans, paul ryan has reneged on that agreement. the president has stayed within the agreement. by the way, the reason they

reached this particularl discretionary spending line is because we are in a recovery. now, after 2013, we will see faster, deeper cuts in the federal budget. but to keep from stymieing the recovery, this line was agreed upon. here is where we are now. the senate is saying we will stick with the deal. we were headed for a government shutdown. host: when? guest: sometime in perhaps september if the republicans insist on reneging on the deal they agreed to at the time with the budget control act, which is what settled the deficit ceiling debate and got us finally to raise the deficit ceiling.

phone cause.et to carl is a republican. caller: what is going to happen when the chinese and thus more money? we are heading over the cliff. when you compare public wages and benefits to the general public, it is almost doubled. i think federal employees' wages and benefits should be predicated on the average american citizen. host: all right, let's take those points. guest: this is an important one and i appreciate the caller racing and although it is not double, let's look at what the caller is talking about. the average american, middle-age people to people who make even more money than federal employees. the federal employee work force is a very upscale work force because of the nature of the federal employment.

it affects their background, their education, and the needs of the federal government. that is why the wages are greater at than their back wages of the "average" in the country. host: hi your skilled worker, then. guest: you cannot get this job without at least two years of college. as computer programmers, technicians with very high levels of training, people who go into the private sector and earn more money. the federal government has to have a workforce that is at least competitive when you consider the range of missions the federal government has. host: dan, democrat in charlotte, north carolina. caller: "usa today" wrote a story in the last nine months

that said that you are more likely to die than be fired by a federal government agency. you know, you have situations like the madoff thing where you had a private citizen called the ftc repeatedly saying that we need to stop this guy, but you never hear anybody being fired. a question is, would you agree that in private business we ought to tighten our belt and just say look, all agencies need to reduce their workforce by 15% to save money? guest: oh, sure, we should be reducing the work force and that is what the president's budget dies. the ryan budget said that for every three federal employees left, you could replace them with one federal worker. what is very unusual -- the office of management and budget

in a statement said that that kind of replacement mechanism would make it hard for the federal government to meet its mission. that is what you might expect a federal agency to say, but it is the omb who cuts the agency before the budget comes out. yes, the federal government should be downsizing, is downsizing. the request and is it do you want your social security check, do you want the border protected? these are the workers that do that job. i hope we did not, considering how highly skilled and dedicated they are, make them into what they really are not. tweet.ost: this

guest: the president is not going to do the budget or deficit reduction is through the rear preparation process. his blessed with the discretionary -- his budget was the discretionary spending line agreed upon in the deal. my republican colleagues walked away from the table. that is the only way you get the kind of budget the american people deserve at time of recovery when we have come out of the deepest recession in his street. host: why then were there not the votes from democrats to support the president? guest: it was not the president's budget in that sense. the ryan budget is not a budget. what it calls for, for example, are cuts -- he is very specific

about cuts, more than 60% of the cuts from the poorest people in society. he is completely non-specific about how he is going to pay for it. the ways and means committee or some other committee will talk about how you pay for it. the president's budget, what is called the president's budget -- it is his request to congress for how they, and it is based on the baseline budget control act that the republicans and democrats agreed to in order to get to raise the debt ceiling. host: independent in pikesville, tennessee. caller: good morning, delegate norton. pleasure to ask you this question. i am glad you give the explanation of the budget

process so people understand what is going on and how things are done. that is pretty much the problem we have in this country, that we don't know how things are done and what goes on. the question i want to ask you was what is your feeling about the way the president -- every move he makes seems to be met with opposition and dis information? what do you think can be done to combat this? i see even the so-called liberal media tends to misrepresent and not truly -- in tune with fair and unbiased, or that is the push, but it is more about the questions that are not

asked with a, it's not given that what they are putting out -- host: got it, rick. guest: some of the criticisms of the president are patently unfair, more than the criticisms you expect from an election year. even when it is is what you expect from an election year, people wonder why this president seems to get no cooperation from the other side of the aisle. that is the real question. there comes a point -- i have been in the congress almost 22 years -- there comes a point when both sides recognize that you have to make a deal or the american people are not going to get anything from this congress. there is nothing, no signature legislation, that the republican house, for example, has passed -- typically the most popular bill in that country, the transportation bill, because

every district has roads and bridges and transit. we had to do a 90% -- a 90-day extension because we cannot pass thatt. if it means cooperating with the president, the way democrats cooperated with reagan or republicans cooperated with clinton, they would as soon have nothing and have no signature legislation to show for being here almost two years. guest: this is one of the untold stories of the federal government. beginning with president clinton, there has been a huge reduction in the number of federal employees. something like 50 years ago,

hundred 30 federal employees -- 130 federal employees for every american -- now it is something like at 72. the greatest efficiency in the federal government since then -- when you have is that people put all government in the same back as the federal government, state government, local government. people may remember that the downsizing of the federal government. my only concern is that sometimes when the federal government downsizes, and this has certainly happened, private contractors get to do the work that federal employees were doing. one of the things we are insisting upon is to downsize everybody, not just civil servants. host: dave on the republican online. caller: hi. i am a retired diet, military

for years, i watched c-span, fox, you name it. you asked the question of what plans were to cut the deficit, what you are going to cut. all i ever hear from the democrats is that we have to achieve that balance and we have to tax the rich and stick it to republicans. what are the democrats doing to cut the deficit? are they doing anything? guest: the president's budget does cut the deficit, and if republicans would come to the table, we would get the numbers to cut the deficit. it does is it cuts the speed and the rate at which it goes up. as i indicated, the president started off by freezing federal employee salaries, trying to

lead by example, and this budget is full of cuts. there is virtually no agency that gets the and increase. federal employees frozen for three years -- that is a huge cut in their salaries. if an agency gets no increase but is cut, even though the cost of living goes up on the cost of supply goes up, that is a cut. the president has cut agencies across the board. the difference in the ryan budget is where the cuts come from. the ryan budget takes the cuts from programs that serve the neediest americans, and in 10 years, more than 75% of the cuts would come from them. in violation of the budget control act, the deal that was made, he would raise the amount we give to the military.

that drives people nuts, because they don't see the kind of our cross-the-board cuts -- the president doesn't raise the military. the president tries to even out these cuts. the difference in democrats and republicans is how you get the deficit reduction. do you take it only from programs for the very pour or do you -- and put that money to reduce the deficit, or do you take some money from them but also take money from the bush tax cuts? let's do that bennett rule, where everybody pays at least $1 million -- host: buffett rule. guest: what did i say? host: bennett rule. guest: look at what

representative ryan does to medicare. he does virtually the same thing he did before. why don't both sides come to the table, which is the only way you'll get social security and medicare cuts, and sit down and work on a deal? the way we work on the budget control act. host: "the new york times" has numbers to at to what eleanor holmes norton is saying. let's go to steve >>, a democrat

in atlanta, georgia. caller: i am a blue dog democrat. i thought bush and the republicans were babbling idiots. i voted for president obama. however, he has greatly disappointed me. i don't know what world this delicate and the people in congress are living in. spending is up dramatically. i don't care if there are less employees. the spending is up. if you don't understand the people in the rest of the country and the rest of the world are going to cut spending, then you are out. i would like your comment. guest: first, i would like to comment.i welcome this we may not know what a blue dog democrat is, but we are hoping

to pick up more blue dog democrats, who have more conservative principles and tend to be concerned with budgets and spending. you ust quoted the difference between the ryan budget and the president's budget, and i am not sure that my friend who is a blue dog democrat would agree with paul ryan that we should raise military spending instead of cutting military spending. if you want to talk about a the militaryet, budget -- one of the things since the tea party republicans came to power that we've ever had a deal on -- i think i guess the only thing -- i think it is the only thing -- is the budget control act, which is a top spending limit. deficit reduction and cuts that republicans agreed to.

reneging on that and coming back with less spending and virtually all of it coming from the middle-class, especially from the poorest people in society. host: here is a tweet. guest: i think the president did not not support the bowles- simpson proposal. it was on the floor and had the support of a number of democrats, as well as republicans who signed onto it last week. i think the bowles-simpson proposal remains and will be the basis for negotiations that must go on between democrats and republicans. host: you mean in the coming months? guest: in the coming months or at some point it may be after the election, because it will be a period where everybody knows

it will be elected where you might see these things happen. host: you think it comes up again? the bowles-simpson at plan is the foundation for negotiation? guest: no question it is the foundation. look at what it says. a very tough. if you want to grow your economy, you cannot only cut. you should have something like the surface transportation bill that balances it, but those are very tough. social security and medicare and medicaid cuts that come in my judgment, what is on the table, and both sides will have to come and say how much of this do you agree to? i think what the president is the right thing not go in this climate, you will not see it the negotiant take place -- host: before the november election? guest: almost everything that

will get done will get done before those negotiations began. host: busy december. [laughter] chris in michigan. caller: my thoughts go along with that the last caller a little bit. but i don't understand is that government employees are paid by taxpayers out of roughly 52% of all workers pay for everybody else. the math doesn't add up. i also understand that my grandson, under the best case scenario, already owes $40,000 -- he is two years old -- before he has his first job. just a question -- do democrats ever take math class? it just does not add up. guest: well, with all respect,

the 52% is for everybody else. i'm not quite sure what that means. federal employees become scapegoats. it is a tiny fraction of what .e're talking about i would ask the caller, if we could have a civil discussion, would he agree that the military shouldn't contribute something, would he agree that people who make $1 million should contribute something? if he agrees with that, they whatever put their money in the collection box just does -- just as much. guest: this is a very important

question. what is the defense department heights a much? i remember in my early years, all the women in congress went for the appropriation bill to argue angrily at for an increase in breast cancer funding. what were we doing there? what we were doing there is an appropriator at woodmont a -- had put money in for breast cancer screening. the defense budget is so he might is that it would take an army of -- wsso humongous that it would take an army of auditors. you will have the first proxy for auditors in my lifetime. host: will they be made public?

guest: it will be part of the probation hearing, and there is already calling and screaming. -- howling and screaming. there will be people who say it not just that we want the military to have money, but that when we cut this or that material or aircraft carrier, you are cutting jobs in my district. host: what you think about sequestration? guest: the ryan budget already violates sequestration and kind of invites it. we have reached the pivot point after the election -- what he does is try to take the military budget out of the possibility of sequestration. the will never happen, the president will veto it. sequestration is what he least once. -- least wants.

maybe that hoary possibility will get people to sit down -- that horrid possibility will get people to sit down with what you and i were discussing earlier with simpson-bowles. host: little rock, arkansas. democratic caller go ahead, david. caller: pleasure to speak with you. all the bush partisans brought up the debt and are still bringing it up. no child left behind, two wars, all these programs that bush had that were unfunded. the problem with the democrats is still this. certain democrats will not go along with the president and a vote, they are really republicans. these people need to be primar ied, like mary landrieu. the tax issue.

if you people do not raise taxes, the democrats, for one -- we are not coming to vote because if we cannot get you to do anything for us, there is no reason to vote for you. host: tax policy is our topic, and up next on "washington journal" in about 10 minutes. go ahead. guest: raise taxes and cut spending so that he will not drive us back into another recession, and we will grow ourselves out of recession while at the same time cutting the deficit. the weight in which every budget experts as you get out of our recession when you have a big deficit is you begin gradually to cut the deficit while growing the economy. if you cut it to starkly, you cut your ability to grow. the caller makes a very good

point. we have engaged the first time in american history in two wars without paying for them. he is talking about prescription drugs, where we did not pay for that. republicans in a sense are trying to make up for what they did pay for the 4. if you want to make up for it, make up for it by going to those who are making the greatest benefits, those who received the push tax cuts -- bush tax cuts, have everybody at the table and say ever been passed to contra boot. host: we want to tap into your legal background -- law degree from yale.

the ap notes that he is often the swing vote. what did you hear they're on the constitutionality of the health- care law? guest: i have argued before the supreme court, and i cannot tell whether i won or lost. i happened to have one. it was a free-speech case. host: oh, really? guest: the other thing is that i am looking more at the chief justice that i am at the anthony-- atg kennedy, because he understands the gravity of overturning the affordable health care act. it would be the most serious act since the social security act was passed.

there is some possibility he will join other justices. i am speculating the way i say you should not speculate. host: [laughter] guest: to save the affordable health care act, you could do it by looking at the mandate, for example. the mandate is very broad. much of it has to do with catastrophic events. you get hit by a bus. you could save the mandate -- host: the individual mandate, is that what you're talking about? guest: i am. it is very broad. you could save the mandate by saying that to the extent that the mandate deals only with the package that causes the increase, because everybody

needs to have health care, or the burden to on others, this mandate is constitutional. in other words, you could look more closely at the man did and see if any part of it could be saved, and you get some sense if you listen to his argument that he was least likely to want to just roll off the law and say that is it, the way that, for example, justice scalia added. host: does that mean you have given up on justice kennedy of voting with the administration? guest: the what i am -- the one i'm focused on is the chief justice. stevens is unpredictable in the way he makes his argument -- host: justice --

kennedy.sticc e he has been known to change his mind after he goes to conference and talks with fellow justices. host: a few more calls. ed in georgia. caller: it looks to me that the democrats pretend to be the party of the downtrodden, but they are controlled by the rich radical environmentalists and the rich movie stars who can afford those electric cars, $10 gasoline, and $9 coffees. i think the liberals have lost their mojo. guest: well -- host: [laughter] guest: he says the democrats are controlled by the rich. all i can tell you is that the democrats are the ones who are saying they should be taxed more heavily than the middle-class. we want to put more taxes on the

rich radicals. in terms of environmentalists, there are environmentalists -- the europeans have got at -- not at gas prices is to make it very expensive. that is not the philosophy of the democrats. they want to bring down the gas prices, and the first thing they what to do is make sure that it will convert its to the deficit and we go out exploring for oil -- that oil contributes to the deficit and we go exploring for oil in the future, and up for grabs other energy sources. we see countries like china getting a hold on oil leadership on those other ways while we hang back to focus on one way and only one way.

the president is right when he says that you have to look at all the sources, whether it is oil or press for a long time, but you don't want to lose its leadership on wind and sun the world is clamoring for. guest: let me tell you why i think not. every country in the world, including the most free-market countries -- singapore, countries with no regulations -- every country that does health care has a central way, whether it is through private insurance or government taxation. the theory is that if you want to bring down the cost of health care, you have to spread the money and every american understands that.

the reason all of us are injured instead of buying insurance on the market is we want to be in the market, whether it is insurance or other kinds of insurance. we want to be there with the biggest pool, because the bigger the pool, the less the cost. that is the long and short of that. if we get the entire country in the pool, we drive down the cost of health care. host: 1 last phone call. paulette, democratic caller in new york. caller: hello, ms. norton. i respect you a great deal. guest: thank you. caller: i'm a federal worker, and i have not gotten a raise in how long did i did not know that obama was responsible for that. when we going to get a raise again?

guest: when budget talks began a couple years ago, the president did something that a lot of us thought was a bit much. he started by saying to freeze federal employees for is because hyou lead by example. what he thought that it needed to is that it would lead to republicans getting everybody on the line. it did not work. now the republicans are taking advantage of it that they are in washington, and most of them are not and washington, but taking advantage of that to cut federal pay disproportionately more than they are asking us to cut to be to deficit reduction. host: delegate eleanor holmes norton, thank you for coming back to the "washington journal" table. appreciate it. >> coming up, president obama will deliver the keynote address

at the american society of news editors' conference. he will talk about the 2013 budget as well as the republican budget that passed the house last week. he joins every president since calvin coolidge in addressing the american society of news editors. you can see that live at 12:30 eastern on c-span. tonight, "road to the white house" coverage continues. we will have speeches from candidates at primary night headquarters along with politico's coverage. it starts tonight at 7:00 p.m. eastern on c-span. tonight on its c-span2, booktv in primetime. starting at 8:00 eastern, a look at the lives and careers of notable conservative spirit first, carl bogus talks about his book "buckley."

then, "the life and tunnel to was times of pat buchanan -- and tumultuous times of pat buchanan tal." and now, remarks from christine lagarde, head of the international monetary fund. she is speaking at the annual conference of the american society of news editors and the associated press. >> -- have transformed the disk cooperative. i believe the ap is on the verge of turning a digital corner with the tools, strategies, and skills needed to compete in our new media era. you will hear more about that from tom shortly, and how we can share many of these tools

strategy is to help drive our own businesses. you all know how i feel about the associated press, but its success is crucial to our democratic society and to the world at large. a free press is the cornerstone of democracy. the ap is the cornerstone of our free press. it bears repeating that the ap is the only international news organization whose sole mission is news and whose sole support comes from its news gathering efforts. time and again last year, we benefited from ap's reach, depth, and especially its insistence on accuracy, whether it was refusing to relate rumors of a joe paterno's death, as so many other media did prematurely, or holding off on reports that egyptian president

hosni mubarak had stepped down, which he hadn't yet, the ap always insist on getting it right. get it first and fix it later may be the fashion of the day. but i would bet my money that what times in the end in this -- what triumphs in the end in this new media era is knowing that your news is trustworthy. what i want to talk about today is the role all of us have in ensuring the future of quality news reporting, whether it is ap or the newspapers are presented in this room. before we talk more about the responsibility all must share in maintaining a vital press, that's a thank the departing directors who have helped lead at the ap for challenging times. this year, two directors, in addition to myself, will be retiring from our board after

nine years of service. they are john mitchell, gary prewitt, president, chairman, and ceo of the mcclatchy company. gary will not be straying too far. in a few months, he will take over as president and ceo's of the ap. john and gary have served the ap faithfully and have been remarkable contributors during a period of transition. please join me in thanking them for their service to the ap. [applause] the election inspectors certify that we had a quorum by the election deadline. we reelected three directors and elected six new ones. the reelected directors are betsy brenner, publisher and

president of "the milwaukee journal," the chief operating officer of the hearst corporation, and the chairman and ceo of the times publishing company. the new board members elected to three-year terms are the president and ceo of the e.w. scripps co., the publisher of -- the president of kohl's publishing co., the owner of the santa fe "new mexican," the publisher of the concor"concord monitor" in new hampshire, the publisher and ceo of "dallas morning news," and the president of ogden newspapers. you come on board during an interesting and critical time for ap. will all of you newly elected

and reelected please stand so that we can give you a rousing and thank you in advance for the work you will be doing? [applause] finally, let me congratulate mary john, chairman and president of lee enterprises, who will take over as chairman after this meeting. tom and i know that we leave ap in state hands with mary, who is so well respected in the industry and has shown her devotion to ap and its mission. i shouldn't be so obvious to mention that she is the first woman chair in 80's 166-year history, -- ap's 166-year history, but it became clear to us that the best man for the job

is a woman. it's about time. mary, would you please stand? [applause] there certainly will be challenges ahead for gary, mary, and the board, just as there will be for all of us in the news media. 2012 will be a tight year for the ap financially. we are counting on investments in infrastructure and product development at ap has made to have a positive impact on revenue this year. last year, ap's operating results were consistent with those from 2010. revenue and operating expenses declined slightly. lower in revenue was 2010, but we up successfully present ap'-- frozen ap's

pension plan and have embarked on cost-saving initiatives that is expected to result in significant savings in 2012. you will notice that the bottom line that shows a large loss this year. because of accounting rules, ap was required to provide a of valuation reserve against tax assets this year. while this reflects the intricacy of esoteric accounting rules -- i'll never understand them -- it is and expands on the tax line. i can assure you we did not pay $170 million to the irs this year. we strongly believe that ap will realize all of these tax benefits in future years. you could find out more about our financial in the report handed out today. before i hang my hat as chairman, i want to talk about

what my experience on the ap board at all the years and the media have taught me thus far in life. many of you recall my call to arms in the annual meeting in san diego. i said that we are fed up and we're not going to take it anymore. how can anybody forget that? like it or not, it got headlines, and it spurred action towards ending a uncompensated use of the news we all produce at such great financial and human costs. three years later, we'll still only inching along. let me revisit that rallying cry today. it is time for us to put aside differences and take on our common enemies. instead of each building our own national ad networks and publishing platforms, which

should come together and drive up larger audiences collectively. i don't mean just newspapers. building audiences today is a lot different than when most of us got into this business. we need to join forces with the not just fellow publishers, but with broadcasters and others -- yes, including the portals. we need to fight for the news we produce to be paid for. a thinner wallet does not mean a weaker spine. we need to fight those who free ride on our content. we need to fight for better internet deals. we need to be prepared to walk away from the bonds were not fair value for the work we provide. most importantly, we need to work together. i truly believe that if we get enough of the right people and

content together, we can get the money we need to sustain our mission, which is so important to our society. the sum is truly greater and more powerful than the separate parts. tom is going to talk about some of things ap is doing to move us further down the road. i want to thank him for the guidance envision he provided for the ap in what is certainly the most challenging pooch out in -- most challenging period in ap's history. everything he has done during his tenure here has been with the goal of supporting ap. tom is perhaps the best ceo i have ever encountered. he and i have worked together as a team, and i'm proud of what we

and the board have accomplished together in these difficult times. tom, thank you. i have enjoyed working with you, and we wish you the very best in your retirement. [applause] tom is indeed a hard act to follow, but the board has chosen a president and ceo who can ably step into the big shoes tom leaves behind. gary started his career as a first amendment attorney, and the values that have been the standards will all hold so dear. he did a remarkable job of balancing economic reality, news quality, and digital innovation while chairing mcclatchy. 9 years asris as -- c-span.or an ap board member, he became a

part of the fabric of ap. central casting could not have found a better person for ap. before our outgoing ceo speaks, the incoming ceo has a few words for us. gary? [applause] >> thank you. i am deeply honored to become the next president of the associated press. i believe the ap is the most important news organization in the world, and i will do everything in my power to sustain it and further it. i was struck by an article i saw in "the washington post" last month, which traces the birth of modern journalism to the civil war, where the hunger

for more news brought thousands of journalists to washington, d.c. 8 recounted that the life of a newspaper reporter at the time was marked by insultingly low wages, uncertain job security, and frequent charges of inaccurate and biased reporting. in a way, not much has changed in the past 150 years. [laughter] many of these reporters were young and inexperienced. some were newcomers that peddled rumor, gossip, and sensation. most were partisan. some even traded flattering accounts of politicians and they covered for cushy government jobs. and yet the "post" reported that the senior ap man in d.c. at the time never ran into those conflicts or that kind of trouble. ap's dispatches served republican and democratic papers, and he was described as one of the earliest objective

reporters, impartial, unbiased, untainted by fear and favre. he planted the seeds of modern journalism right here in washington, d.c. it seems appropriate, doesn't it? roleught to myself, ap's has not changed that much over the years. in a similarly partisan world with all kinds of competitors and newcomers, in the confusion and uncertainty, ap must remain accurate, impartial, and unbiased to maintain trust, value, and relevancy. i began my career as a first amendment lawyer from berkeley. as you might expect, i am passionate about free speech and free press. i hold a deep appreciation and respect for ap's leading role in advocating for transparency, public access, government

accountability, and press freedom worldwide. fewer media organizations are doing it. in these challenging times, it may be tempted to reconsider that effort. but ap must never back down from shining a light. we must continue to advocate for accountability and freedom of the press around the world. if we don't, no one will. over half the world population comes in contact with ap news a daily basis. the world is counting on us to tell the truth completely every day so kids can go to school, the chance to fall in love, and get to be cool.

find newlenge is to revenue sources. in a few moments, you'll hear from tom curley. i believe the strategy is that tom and ap have identified are the ones that we must continue. video and digital are critical to our future. tom curley has done an outstanding job as president of ap. he's gone to be a tough act to follow. i plan to put my heart and soul into building upon his foundation so we can continue the global mission and legacy of the associated press. thank you very much and now here is tom curley.

[applause] >> good morning. in analyzing the shift, the ap staff has concluded there moving from sports metaphors. i offer a refrain from the beatles. "it is getting better, better all the time.' today i offer three simple messages. gratitude, the next up on how to raise the value of content. third is a salute to the journalists. if you consider the challenges of the last decade, it is tough

to imagine another time in history that has been as breathtaking. the ap board through all has been exceptional. at a time of intense pressure, they kept the members interest as their cause. they cheat clear consensus that has enabled management to act with purpose -- they have achieved a clear consensus. there are different people with different skill sets. the come together with their devotion to this business. dean has been an outstanding chair. he has been insightful about what the industry needs and how ap should contribute.

mary is the essence of collaboration. she is an inspirational leader. to them and all the directors, i say thank you for commitment to ap and your incredible council over the last decade. from the start, the ap staff has been welcoming. this generation showed creativity in figure out how to deliver content faster on more platforms and formats than ever. if final thanks to the management team. i told them for years we have to climb the mountain. the jury has been anything but straight up -- the journey has been anything but straight up.

i am glad they had a sense of humor when we got lost. ap is stronger and a fragile moment for the news business. agencies elsewhere have been -- ap is more competitive with more filing capabilities. ap has been helped by strong business diversification and steady revenue growth in all areas other than member fees. i filed my first story on a basketball game nearly 50 years ago. it was a bit of a stretch since i also played in that game. [laughter] the news cycle back then was about 12 hours and we knew it as a.m. and p.m. newspapers.

s evolved.yuval the cycle had declined to three hours. today that news cycle is about 30 minutes. audiences have been fragmented. social media have transformed how and to whom the news is communicated. all of us have struggled to remain relevancy. this spring shows impressive new problems. know how people will be consuming the news and the business models they will be comfortable with. that is a huge change from just a few years ago. facebook was still limited to a

campus in cambridge and there was no such thing as an ipad. some are combining new business models and adapting what they do in terms of creating products. they are seeking audiences beyond traditional geographic boundaries and they are charging differently for the range of products that they are creating. we have long known that we have to become more than a wholesaler of news in this digital marketplace. we've been putting in place a powerful new set of capabilities towards creating -- those capabilities are ready today. we want to change the conversation to "how can we help?" we like you to appoint an ap

product manager for your newspaper, who will cut across departments and get programs implemented. we make that ask because we have reached the point where we believe our collective energized efforts can start raising the value of content in our revenues. the way to reach audiences is taking many paths. we have to connect the dots and the dollars quickly. the revenue for you is positive and growing. i have asked three colleagues to join with me to illustrate to range of opportunities we see developing. you said one of your biggest needs is access to the video news. this provides a self service

platform for getting access to wear a video news content. here to tell you about it is our senior vice president. >> hello. i'm talking to you from london, videoheart of ap's operations. ap has been upgrading our video capabilities. whether our equipment or our distribution networks. what does that mean for our customers? broadcast customers will contain to get broadcast quality news from around the world with the same speed and accuracy they have come to rely upon from the ap. but now it is fully digital. we have completed the transition

of entertainment into sports news. all of our output will be fully high-definition by the time of the olympics. there is a new audience emerging for ap's video content. a new player has entered the market with an increasing market for video news content. we will be launching a platform that allows anybody who values news content to download ap's content at the click of a mouse. this includes our archives. and all this comes at a time when we continue to invest in our journalism not just in terms of the tools are journalists use

, but also in the way that week tell stories in new and changing markets. this is a part of a strategy to respond to customer needs and to ensure that we continue to maintain our position of leadership in the video news worldwide. >> the digital line is being transformed, too. we have a new version of ap mobile. here is jim kennedy to tell you what ap is doing to drive traffic and revenue to you. >> this is not just a technology

show anymore. people cannot do without these devices. we have questions about what happened to the future of news as these things continue to roll out. we know people's habits. we know people will connect with these devices 365 days a year. scope and scale win. they will win again in mobile. we have a brand new local section that improves on the original version of this by enabling you to pick a city and get whatever brand of content is available. we can pick from any city that

we have and take a local brand and dive right in. the local editors can carry these pages. we can also point out from these pages. you can click fruit back to the members website or to their app -- you can click through. >> these projects represent serious technology and investment. we have spent $25 million on the cameras alone. we are integrating our services directly into your work flows. sue visited the new york daily news to catch up on how they

were dealing with one of our efforts and she's here to tell you about it. at thesue and i am here new york daily news building. the new york daily news was one of the first newspapers that are dissipating with ap in developing a new market. this enables newspapers to take their sunday circulars and expanded into the mobile world on these devices. "the daily news" has had tremendous success. advertisers like this because it is a one-stop shop. they can reach many mobile newspaper applications. this is a way to build that market faster and with more reach."the daily news has had

great success with these circulars in the new york markets. we hope to duplicate the success across the country. >> we plan to showcase their range of the services with the kickoff of the new football season. when i got to ap, and a decision that turned out to test the stand of time. there is not a newsroom that has adapted as much to the changing times. we have had a great partnership. we dealt with hostage situations or too many serious injuries. ap could not have had the impact

without kathleen's leadership. ap is all about the news. i have seen them work under the emergencies of war zones with the pressures up government threats. i've watched them at their exhaustive best. i have cheered when they tell a story because it has not been verified to their satisfaction. they embody the history of journalism, to make sense of global culture and content. to paraphrase, whether or not your tweeting, we are the tweet you can trust.

now to kathleen and a special newsmaker. [applause] >> thank you, tom. you're is sheer love of the craft of journalism and the people who practice it. this has made a difference to us. our guest speaker attracts a dazzling array of superlatives - -firm, tough, chic, smart. they do not say that about us at the ap somehow. christine lagarde is rightly called one of the most powerful people in the world today. she takes the helm at the time of economic turmoil around the

world. christine lagarde brings a unique background to these challenges. she was born in france. and went to law school a graduate school. she joined the international law firm of baker and mckenzie where she specialized in labor, antitrust, and mergers and acquisition, becoming chairman of the global executive committee and then chairman of the global strategic committee. the last six years were spent in chicago and baker and mckenzie. she moved back to france and was named finance bannister of france, the first woman to hold that post in any g-7 country. christine lagarde has broken

many barriers in their career. she is a powerful person. "the financial times" named her financial minister of the year. turn to facebook and you'll find frequent postings on the christine lagarde page in several languages punctuated by photos and videos. on youtube call you will find her interview with john stuart -- jon stewart. throughout her career, christine lagarde has championed the need for more women in fields like finance, saying, "there should never be too much testosterone in the room."

the financial questions over which he presides have never been more urgent. she has warned against becoming "so optimistic that we give a false sense of security." ladies and gentlemen, please join me in welcoming the managing director of the international monetary fund, christine lagarde. [applause] >> thank you very much. apologies for my appearance. i'm capable of breaking my knee. good morning. i like to acknowledge tom curley, who is stepping down as

ap president after a lifetime of distinguished service in journalism. i want to thank kathleen very much for who she is under kind words of introduction. speaking of warm, you know, it is a testament to associated press. to have a french woman as the opener for the president of the united states, which in french which translate into -- "the american opener." well done. it is important for the imf to have an open and fully dialogue with its membership, particularly with the yen's

states of america -- with the united states of america. thank you very much for having me. i don't know how you managed, tom, but this is complicated. i'm going to lift my paper. i came this morning with the simple message. the world needs u.s. economic leadership. now is not the time to withdraw or to phase out. now is the time to engage. we have seen the united states leadership indispensable, bringing people together around shared values and an abiding vision of human potential and economic potential. we saw this after the marshall plan, after the second world

war. we saw it again during and after the cold war. and we've seen it again over the past half century. the result has been a more successful and more peaceful world. today we stand at yet another moment in history were the united states working closely with its partners can help lead the world to a better economic future. these are trying times. the global economy is trying to emerge from a deep crisis since the depression. the world is growing smaller and more interconnected, thanks to you. we feel so much more vulnerable as well as with many more

opportunities. with this in mind, what i would like to try to do this morning is to try to answer three questions. where does the global economy stand today? why the united states in particular needs to be engaged? why corporation is so vital and what does the imf must play a bigger role? let me begin with the global economy. things have improved quite a bit over the last two months. there are signs of improvement -- this started back in the summer. right in the middle of august.

people should never go on vacation in august. [laughter] frome encouraging signs financial stabilization in europe. we are seeing encouraging signs in the united states as well. manufacturing activity. as you said, we should not delude ourselves into a false sense of security. the recovery is still very fragile. the financial system in europe is still under heavy straits. debt is still high. stubbornly high unemployment is straining the seams. oil prices are another cloud on the horizon.

policymakers make use of the current moment. breathing space to put in place the policies and contained the job they have started. i would say to take a matter of completing and continuing the job. remember that we are here not because of random circumstance but because of strong policies that were decided a few years ago. the strong coordination initiated by theg g-20. the bold policy actions taken by central banks. so what should be done to keep things on course? i see three key dimensions. the first one is stability.

we must ensure financial calm. i welcome the decision taken by the europeans to strengthen their -- it could help stop contagion and this should support a stronger global -- achieved in part by increasing the resources of the imf. we also need a stronger and safer financial sector. this means better and more coordinated regulations. we have seen some results here. this is a step in the right direction. coordinated and better regulations. more needs to be done.

it will be a question of coordinated implementation and of better regulation as well in areas that are still in the dark. i am thinking of derivatives and the shuttle banking. -- shadow banking. putting in place circuit breakers. that was the first objective, stability, particularly in the financial sector. the second is growth. in the short run, what matters most for growth is going to be demand. here comes the canadian approach. demand is fine but we cannot possibly meet supply -- leave

supply by the sideline. supply will take us further in a steady and solve way towards growth. boosting growth means using monetary policy to support activity, a special with no real signs of inflation. it also means using fiscal policy to support policy whenever possible. most countries need to bring their debt down, particularly in the advanced economies. some of those countries need to take a hard measures now to reduce the deficits now. those countries that can borrow at low interest rates can also slow the course, take a bit of time. this is probably the case for the united states of america.

it should not move too quickly. we cannot be complacent again. the u.s. debt exceeds one after gdp.of its curbing the growth of entitlement spending and raising more revenue. the recovery is being held back by the burden of household debt. some of the statistics are just mind-boggling. over 1.5 million mortgages are seriously delinquent. measures have to be taken to restore the capacity of those households by taking advantage of it easier refinancing and

mortgage write-downs. the u.s. administration has made good proposals in that regard. remember, banks were helped to give credit again. households must be helped to begin to consume again. jobs. there is no magic bullet. it allowed to be reinvented from the ground in each economy where it is needed. there are over to order million people -- 200 million in search of a job. to see those young job-seekers in pretty much every country --

their so much renaissance for those looking for a job who have the training and whose trading is adjusted for the needs of the job market. there is hope but nothing to match it. americans might think to themselves, "why should i bother? we have our own problems." you know better. the answer is simple. we cannot afford the luxury of staying in our mental backyard. we have to look beyond. some of you might have the same experience and the same feeling as i do. when we were younger, life was simpler. not just about kansas.

well, our livelihood depended on what we were doing, what our country could produce. but things have changed dramatically. today, we live in a world that is densely woven. since 1908, the volume of world trade has increased fivefold. compare the volume between 1995 and just before the crisis, it has tripled in such a short span of time. let's take a practical example, cars. cars are made of roughly 40,000 different parts. if any country -- let's take japan, with the dramatic

earthquake and tsunami. there was a shortage of energy. car dealers around the corner will be short vehicles to sell. that is one example. the financial networks circuits that allow money to move across the world's. the financial crisis is -- this is probably due in this country to the fact that the financial sector is in large and sizable sector. the same is true for the uk. our analysis shows foreign banks hold about $5.5 trillion of u.s.

assets, while u.s. banks hold $2.2 trillion of foreign debt. it is fast and it is deep. trade. the united states is heavily integrated into global trade. the u.s. accounts for 11% of total trade around the world. 11% of u.s. trade -- 11% of total trade is accounted for by the united states. this connection is strong with your. europe accounts for about 60% of

the trade. 20% goes to the united states. the same is true with direct investments. of the top-10 markets for the u.s. invests, five of them are european. 3.5 million jobs are with european-based company's. ies. the woven between these regions is strong. as the european economy falters, the u.s. recovery and jobs might well be in jeopardy. america has a stake in making sure that european economies and world economy goes better. that brings me to my third and larger point.

if integration poses great problems, it also is a promise for great rewards. it will only be so if there's heightened corp. between the nations. when nations faced common challenges, everybody wins. when they retire to their own backyard or the operate in isolation, everybody loses. we have seen it. "the reason why the world lacks unity is because man is disunited with himself." this concept -- two visionaries back in the last century really got it. an american man and englishman

figured that out. they live to the hardship when countries pulled apart and sometimes toward each other apart. they were the founders of the imf. the idea behind the imf was simple. if countries brought together and help each other in times of need, everybody would prosper together. this idea was important in 1944 and it is equally important today. what is the imf? that is a question i asked myself when i decided to join. i have to keep it simple for myself and everybody else. the imf is and economic club

like a giant credit union with 187 members, nations of the club. they operate together with one single purpose -- better financial stability. what we do, we are a conduit between them. if any of 187 members is in trouble, the others can come and rescue. we pool resources, reallocate, loans that are always reimbursed so that any member that is in trouble can have the benefit of it. of the imf is not for poor country. the imf is for all countries, 187.

we have a program -- the imf has been in the trenches all the time, helping the members overcome all kinds of challenges in order to bring them back to their feet so that they can just face the necessity of financing themselves and dealing with the economy. when european nations clutched rtto the marshall plan and try o rebuild their economy, we were there. when the newly independent countries in africa and asia hoped to find a new footing, we were there. when latin american countries tried to break through from debt

in the 1980's, we were there. when the berlin wall came crashing down and new nations stepped out into a brave new world trying to build institutions from the bottom up, we were there. when the global economy almost collapsed three short years ago, we were there. the imf can provide a circle of protection that will help countries get back on their feet and face sustaining their economy. but to do this in today's world, we need more resources. now that the europeans have moved first, the time has come to increase our firepower.

you wouldn't know that and i asked my team to look for it. the ratio -- the capital of the funds -- the ratio of funds quota relative to gdp is a hreet to four times less that was at the creation of the fund. we need more resources. i must also point out that the imf is quite a good investment for all the membership, including the united states. the imf does not give grants or does not give the nation -- the imf lends and gets its money back.

your money is only drawn upon when needed. your money earns interest. your money is used prudently. were put in place a program that has condition now is that we check on every quarter or so to make sure that they are satisfied. the money is not lent randomly but with conditionality. no one has ever lost money when investing in the imf. it will be the same under my watch. last point. you were the prime witnesses of this tectonic shift that we are seeing in the global economy. countries like brazil, india, and china are just reaching a

stage where they are no longer emerging but emerged -- not on a per capita basis for some of them. they want to have their seat at the table. quotas, ate reassess " th and reforms have been decided that now need to be implemented. we can implement those changes that will give more say, more votes, and a heavier burden on those countries that are emerging and ask for their seat at the table. it is fine to engage. anyone with these reforms, the unites states of america was

still remain my lead shareholder, as it should be the case for the leading economy which leadership is much needed. i would like you to lead with 3 concluding messages. corporations can deliver. it has happened in the past. i have witnessed this on the european scene. u.s. economically leadership is needed for cooperation to work. in a world driven by an infinite of interconnections, the idea of corporation is as urgent -- "geography has made its neighbors, the economy has made us partner and." this is another time when that

has to be demonstrated. the imf was founded by an american and englishmen who had a vision. that division is still true today and the imf continues to serve the community. all i would say to you is that use us. work with us. we will serve you and we will work with you. thank you very much. [applause] >> we will take a few questions. madam director, you spoke about the needs of the imf and spelled

out general resource needs. how much do you need and where do you see it coming from? >> there's a sequence issue and then there is a volume. the sequence issue has been stated by all the memberships is let's make sure the europeans come up with the right set of measures that will make them stronger and that will indicate that they do believe in their currency and the markets. then we will make sure that we participate in the global firewall of which the imf is one big portion. in terms of sequencing, the europeans have committed. there will decide how much they want to participate.

we are engaged in multiple conversations around the globe at the moment. i have some strong voices indicating their willingness to participate in this fund-raising effort. i will be able to say more at the time of the annual spring meeting coming up bint two weeks' time -- in two weeks ' time. >> he spoke about the sequencing in europe. are you satisfied with the recent actions? have they avoided the crippling bailouts that will be " required to keep them stable? do you think countries like greece and portugal will be better off outside the eurozone? >> easy questions, right? [laughter] our sense is if you put it all

together and look at what nations have done -- look at italy and spain -- what they have decided in terms of fiscal adjustments, structural reforms. in the competition market, the product and service markets, we have competition as an objective. that is one chapter. look at the european central bank with its long term facility where massive amounts of liquidity have been made available to all banks without restriction. and the governance, the fiscal compact where they have decided to be more disciplined and more

accountable to each other. you have the firewalls that they have decided which includes the $300 billion and another $500 billion. that is a solid bases where i can say, and now the time to participate and to improve the firepower that we have. the message is the same. it is a question of keeping up, keeping up, keeping up in the implementation and continuing steadily the measures that have been announced graciously by some governments, to the detriments sometimes. you have seen government the changes in europe and that is caused by the decision to implement the changes that were required and not been conducted for a long time. as to the size of the eurozone,

deeply rooted sentiment that the europeans have. what they have built over the last 50 years right up to the second world war is something that they are attached to. from discussions with many think there's't any political intention disclosed or hidden to break up that zone. it determination to keep it together and to put money where their mouth is, which is what they have done recently. to your question, i think the answer is no. >> you are seeking leadership from a country where the political parties are not

getting along, it would be fair to say, particularly over budget issues. do you have any advice for them? >> i would simply remind the american people not to mind so much. they matter enormously the world over. when the in and states of america does not work politically or economically, it has consequences and sideline affects the world over. it is not pleasant for them to have that situation, i am sure. it is not pleasant for anybody else around. the challenge is almost beyond this great nation. it affects the entire world.

the stakes are high. >> very good. thank you so very much. delighted to have you. [applause] mr. chairman, i believe it is yours to close the meeting. >> yes. there are some early departures. the rest of you not in the escorted group need to be in the ballroom by noon or you will not get in. mr. chairman? >> that is a good incentive. either you are in or you were out. >> i call this annual meeting adjourned.

[applause] >> president obama will be here this afternoon. he will deliver the keynote address. he will include his thoughts on the federal budget plan that proposed and the republicans passed in the house last week. exurbs of the speech have been released by the white house -- of the speech have been released by the white house. we'll allow the speech in its entirety at the american society of news editors beginning at 12:30 eastern here on c-span. today is primary day in wisconsin, maryland, and the district of columbia. rick santorum is in

pennsylvania. newt gingrich has no public events. ron paul will be hosting a town hall meeting in chico today. the road to the white house coverage will continue with primary results from those states. we will bring you live results and speeches and will simulcast a portion of "politico's" election night coverage. it begins tonight at 7:00 p.m. here on c-span. book tv tonight on c-span2. elected the careers of notable conservatives. "buckley." timothy stand on his book "the crusader" -- timothy stanley. winstom groom discusses his book

about robert reagan. a lot tonight on both tv on c- span2. >> today we go to wisconsin to speak with sinclair richards. hi. >> hi. >> you chose the first related to the new cigarette warning labels. >> i believe there were 12 images and their work realistic. they showed the long-term effects of smoking. it was a story that is not being told that much in the media. >> you included examples of the

old and new labels. what was your goal? >> all the images in the past were so glamorous. "you should do it because the it is cool." now they have the same images but techniques that are used to market their smoking is really, it doesn't make sense because images -- unrealisic images. the campaign -- they want people to not start smoking altogether. i think our group agree with all their standing and with the company stood for. the

students. how did those students help you understand the different sides to this issue? >> i think it helped our documentary get a lot of the points of view. it showed a lot of different people in different situations. >> will we like people to learn -- what would you like people who watch your documentary to learn? >> if people were thinking about smoking to look up the label. i do not want, that to be be." "this could really be be." that would get people to stop and think about what they are doing. >> thank you for talking with us. here is a portion of her video. >> sending this message to

smokers. it just got a lot easier. stark images that illustrate on every pack of cigarettes. for years, we watched tobacco rates fall in the country. in 1965 were at a situation where over 42% of americans smoked. by 2004, it had fallen to just under 21%, a fairly significant drop. in recent years, despite the well-known health risks, youth and adult smoking rates have been flat. they have been dropping for

decades and stalled at about 20% . >> you can watch the entire video as well as all videos and continue the asksis year's competition students across the country which part of the constitution is important to them. today's third prize winner selected the first amendment. >> our teacher sure did not do a good job explaining it. >> i don't understand the first amendment. especially freedom of speech. does it give us the right to say anything we want? >> does it allow the government under certain conditions to limit freedom of speech? >> let's do more research. ♪

["the times they are a- changing" playing] >> we have always known the fight to stop smoking in this

country won't be easy. >> ♪ >> its simple. smoking kills. sending this message to smokers or those who were thinking about smoking or thinking about starting to smoke just got more intense. these warnings will appear and everything from cigarette packs to in store tobacco displays shows stark images and bold messages that will graphically illustrate on every ad and every pack of cigarettes the painful and deadly reality of tobacco use. >> for years, we watched tobacco rates fall in the country.

in 1965, we were at a situation where over 42% of americans smoked. by 2004, the good news is, it had fallen to just under 21%, a fairly significant drop. the bad news is that in recent years, despite the well known health risks, youth and adult smoking rates have been flat. they had been dropping for decades and have stalled at about 20%. every day in america, about 4000 kids under the age of 18 try their first cigarette. about 1000 of those young americans become lifetime smokers. >> and do you think they have the right to require these images on packages? >> i think it goes back to the first amendment argument. i'm going to suggest they do but

it may be wrong. >> i don't know if it violates their first amendment rights. it seems to be crossing the boundary i don't think the government has their business sticking their noses and. >> do you think ordering tobacco companies to put these labels on is constitutional? >> i think it's fair people know kind of product they're buying. >> because smoking is related to many, many diseases -- you can start but the lungs, which is most common. it can cause emphysema, it can cause lung cancer. if you go from head to toe, the kenaf throat cancer. people who do smoke are more prone to having heart attacks. people can have strokes. it can cause osteoporosis.

>> by mandating these warning labels, is the government of abusing the constitutional right of freedom of speech? commercial speech does not have as much protection as individual free speech according to a supreme court ruling. the government just needs to pass to criteria. they must show substantial interest. substantial interest in the situation is alerting the public of the health risks of smoking. it could save the government billions of health-care costs. that constitutes a substantial interest. does the law further that interest? showing pictures of dead and dying people will further that interest. according to the supreme court, the government appears to have a right to mandate these labels.

>> it might cause people to think twice, like younger kids, but as far as people making quit smoking, i don't think so. >> i think some people are going to do it regardless. i think it will cause people to think seriously about it. >> would you consider smoking? >> probably not at all. >> why? >> i don't want my lungs to look like that. >> with this picture stop you? >> ps. >> guess a lot. -- yes, a lot. >> these are not too graphic. have been feel trusted by the food and drug administration. we also experience in other countries. we have learned that strong, a motive graphic labels are the best way to get the attention of young people in the best way to get people to think about the actual health hazards of smoking. there are no negative

consequences to the graphic warnings. only positive effect. the positive effects are that more people will think about the health effects of smoking and hopefully fewer kids will start. >> what is your opinion of the graphic images? >> they're very realistic and tell the tale of what happens to some people when they do smoke. >> they are real life and a lot of people are not aware of what it can really do. i think if someone sees about a package it will maybe change their mind about smoking. >> since 2001, teen cigarette smoking has decreased in canada. but at the same rate, teen smoking in the u.s. has increased by the same level. 88% believe the americans are already are aware of the risks. don't you crave those fries?

clogged those arteries. don't bother going to work today, so long as your family doesn't have any money. if you die, you will die. before you decide to throw back a cold one with your friends, keep in mind you can end up like this guy. >> by the way, we received an a on our test. >> you can learn more about today's documentary on her face but kantor pages. >> shortly we will return to the news editors' conference for remarks from president obama live at 12:30 eastern. until then, a discussion on reform in the corporate and individual tax cuts from this morning's "washington journal."

host: our topic this morning is overhauling the tax code. this comes as the u.s. marks the spot on sunday with the highest corporate tax rates after japan lowered its race. japan lower its rates. what does that mean? >> it is not a race you want to win. the u.s. has not changed its corporate tax rate since the mid '80s while most other countries have chipped away at their top rate. japan was the last holdout. they came down 1.5 points as of april 1. that leaves the u.s. rate at over 39% when you combined federal and state tax rates and

that makes us frankly not competitive with our trading partners. >> this is another piece -- when they looked at numbers from the congressional budget office, corporations are paying an effective rate of 12.1%. what do you make of that? guest: the average effective rates commonly dollars are paid, that has been at a historic level. that has to do with two factors. corporations are simply not making as much income as they used to. when a corporation doesn't make income, to pay no tax.

that further reduced the tax burden. it still remains the case that the statutory rate is a significant factor in making investment decisions. investors get to keep 50% and that will discourage investors. >> these are multinational companies we're talking about. don't they have accountants and lawyers that do more digging be on the top number and say to their ceos, the overall tax rate, the number is 39% in the united states, but we get to deduct this and that brings us down to 12%. for people saying we have the top rate -- guest: that is part of the

problem. it creates a large incentive for multinational corporations to think hard and carefully about what they can do to minimize the tax burden. the tax base should be broader and simpler and the corporation should be able to focus on their core business and less on using accountants and lawyers in determining ways to minimize the tax. host: what would you do and corporate taxes? guest: the proposal i outlined this past january is a six-point proposal. the main element of the proposal is a reduction in the corporate tax rate from 35% down to 25%. proposing that would be done in a budget neutral way that does not make the deficit any worse. that means you are going to have winners and losers. host: for corporations? guest: for corporations and some individuals.

the proposal for individuals is progressive. higher income individuals would lose some of the tax preferences that they currently enjoy, and that additional revenue would help offset the cost. host: tell us what wealthier individuals would lose under your plan? guest: it reform to the mortgage interest deduction. it would turn it from a deduction into a flat credit. under current law, the mortgage interest deduction is more beneficial the high regard tax rate. if a mortgage interest subsidy is worthwhile at all, it should be the same regardless of your income. that change would raise revenue. the other change would be to phase out the state and local tax deduction that would benefit primarily higher income

individuals and hire taxed states. -- in higher taxed states. host: how much revenue would that race? guest: about $250 billion over the window. and the second one about $350 billion. it pays for it. these are rough estimate. the final numbers would have to come from the government's estimators. but it would offset the cost of the lower rate deduction. host: 50% bonus depreciation. can you explain that? guest: there are two other provisions. that one is a provision that has been used from time to time to encourage firms usually during a recession to make additional investments. the problem is that it is yet

one more uncertainty that managers need to deal with. by making it permanent, you are reducing the cost of investment by encouraging more investment and growth. host: the second one is the limit to corporations. guest: the final is a hair cut provision to corporations' ability to deduct their interest payments. currently, the tax code provides a deduction for interest but no comparable deduction for equity financing. as a result, the tax code prefers businesses to grow by borrowing rather than issuing new shares. there is nothing wrong with borrowing. the tax code should not favor one over the other. host: how does your plan differ from republican candidates? guest: the ways and means committee chairman is a big

advocate of corporate tax reform and has proposed bringing the corporate tax rate down to 25% as well. governor romney is also proposing a 25% tax rate. one constrained i do not support is the need to -- is the ability to describe in detail what it will be. the other candidates on the campaign trail have talked about the need to close loopholes, broaden the tax base, but they have not got specific. host: on that issue, what are you saying? guest: loophole is not a term that i like to use very often because it suggests an unintended consequence of the tax code. most of the things in the tax code that people do not like were put there on purpose. limiting corporations' ability to deduct interest -- that would broaden the tax base.

host: here is a tweet for you. guest: it is a profits tax. that is true. individuals do get to deduct some of their expenses. they get to deduct their mortgage expenses and charitable expenses. but the notion of income is different on the individual side. host: we are talking about overhauling the tax code. caller: yes. the gentleman here is treading very lightly on the fact that the actual corporate tax rate is much higher than what is actually paid. from everything i can understand is his plan is just another tax cut for the rich.

if you really want a true equity of tax, you would go to a flat tax on all income including capital gains, a tax rate that everybody would pay and no deduction may be except for the first $20,000 for low income. all this other stuff is nothing but a tax cut for the rich. guest: it would increase taxes for higher income individuals. i disagree that it is a tax cut for the rich. it is a net tax deduction for corporations. i think that is necessary in order to bring down both the average rate and the affect of marginal tax rate and the benefit of the lower corporate tax rate would accrue across-

the-board for the economy. new evidence in the last two years indicates that lower corporate tax rates are associated with higher worker wages. host: do any of the republican candidates have a proposal for changing the tax code that includes raising revenue? guest: governor romney -- so, governor romney i think has been pretty clear on the campaign trail that he intends his proposals to be offset, so both on the individual side by lowering rates as well as his corporate rate. host: so lowering taxes? guest: no. lowering the tax rate is what he has been talking about a lot but he has also made clear that he intends to find offsets to fill that h thatole. -- that deficit hole. host: do you think that is a mistake?

guest: ultimately, congress will need to work with the president to find those offsets. i think growth is part of the story. the reason for pursuing tax reform if we were to is out of the belief that it will help the economy. if we can help the economy, we will get additional benefits. workers are better off. the order of magnitude is a policy that improves the economy by 1% would over a decade bring in about $300 billion worth of additional revenue. host: on top paul ryan budget, here is a piece from "the washington post" this morning --

do you agree or disagree? guest: i do not agree. first of all, i think that the budget resolution that passed the house and this is the case for any budget resolution -- it only sets the spending levels and revenue levels. the actual policies are set by committee. paul ryan's budget makes suggestions about how those spending levels and revenue levels could be reached but ultimately it is up to the ways and means committee to decide. host: good morning. caller: good morning. host: we are listening. caller: here is the problem that i have. as a former owner of a large construction company, none of these people in the private sector --

the first most important thing is this. you do not have the ability to make money. you take money. here is the problem. if you would explain to me what is the difference between an entitlement to medicaid or something else and an entitlement to halliburton in the way of tax breaks. halliburton has become filthy rich and has hurt the rest of us and you keep acting like they need the money. we own halliburton because of the iraq war. they are the only contractor there. guest: i certainly cannot speak to the specifics of one company's attacks situation. -- tax situation. we do have certain policies that advantage certain industries.

that is certainly the case. there is nothing barring those policies from being revoked in the future. in 1986, the last time comprehensive tax reform was undertaken, and member of the tax brackets were removed at that time -- a number of the tax brackets removed at that time. caller: good morning. i readily admit i am not intelligent enough to belong to anything tank or institute. -- any think tank or institute. the first thing you have to do is bar any money to congress. i think that will immediately solve any problems. host: george, do you think that because lobbyists get provisions put into legislation, special interest groups get a deduction for this industry and

that industry? is that why you were saying that? caller: i believe the lobbyists are the ones who control this country. it is not washington that runs this country. 8 is wall street and -- it is wall street and k street. guest: i do not have much to. there is certainly the lobbying community in washington which is how policy makers can get information about what is happening to affected parties and constituents. most large organizations in america whether they be big business or labor or of the social issues or economic issues have somebody here in washington helping make sure that those interests are protected. i do not think that

communication between communities, organizations, individuals, and the government is inherently evil. i think more information will lead to better decision making. host: from twitter -- i went to get your reaction to a piece written back in december. guest: that is accurate. a better way to measure it is not the number of companies but the share of their activities that are taxed.

if you look at it that way, it is about 50/50. about half comes from c corporations and about half comes from small businesses or entities. host: new jersey. caller: good morning. can the guest speaker about foreign profits that multinationals make in other countries? is it true that we subsidize the tax they have to pay to foreign governments as well as give them a tax break when they shut down a factory in the united states? host: mark says this on twitter -- i think that was what diana was speaking to. guest: that is a great question. in simplest terms, a basic

description of how the tax code treats foreign income -- u.s. companies when they operate abroad in a foreign country paid taxes in those jurisdictions. a u.s. company operating a plant in france would pay corporate income taxes in france. when that money is returned to the united states, the u.s. income tax is due but they are granted a tax credit for any tax that has been paid in a foreign country. if the tax in france is 25% and the tax year is 35%, they get a credit for the 25% and 80 the remainder here in the u.s. the complication comes when that u.s. tax is paid. under current law, that tax is not paid until it is returned to the united states. it creates more of a level playing field in france for

u.s. businesses competing with french businesses. democrats have proposed increasing attacks, making it do immediately or in some way -- increasing that tax, making it due immediately. republicans have looked at this issue as well and have gone the other way and recognized in order to help u.s. companies grow abroad, we should not ask for that tax to be collected. that is how most of our competing countries tax income. host: jim is joining us, a republican. caller: hello. good morning. i would like to ask this gentleman what he thinks of texting revenue versus income. i would like his thoughts on the importance of knowing what

the rules are in the future as far as you know tax rates and rules and regulations that govern business in order for a business to plan ahead and invest. guest: so, two questions as i understood it. the second one had to do with uncertainty in the tax code. i think this is a significant issue. not only is there a series of provisions that are temporary in the tax code set to go away in a few years or less, that creates a lot of uncertainty for managers and ceo's. looking at our larger this court challenges and recognizing the growing debt burden that we face, it means that someone in the future is going to have to pay more taxes to cover the debts that we are occurring

today. that uncertainty i think dampens our ability to grow and investors willing to take risk. your first question was about the tax base, what the appropriate measure is and what it is we should be taxing. the system we have in place today is an income tax. i think that tax and revenue -- taxing revenue would be an alternative way when we think about some of the value-added taxes, some of the consumption taxes. they will take us more in that direction. but we do not want to increase the burden on everything we do. we do not want to impose a tax only when a profit is our. host: jim on twitter --

guest: there is a host of reform proposals are far more radical than mine that are pro- growth. a flat tax would be one way. >> we will leave now to go to president obama speaking at the american conference of news editors this morning. he's expected to discuss his budget plan and the republican plan passed in house last week. this is live coverage on c-span. we expect to see the president shortly. >> he introduced himself as a skinny kid with a funny name. in 2006, as the junior senator from illinois, he spoke to our annual luncheon about his vision for america. two years later, in 2008, as a

presidential candidate, he spoke again to the ap annual luncheon. after his speech, i asked him a question from the audience related to how he might deal with obama bin laden if elected. in his genteel way, he asked might you be referring to osama bin laden? [laughter] it was a slip of the tongue heard around the world thanks to our digital age. we do have the answer to the question. [laughter] [applause] today, there is no mistaking his name and even i can't mess up.

it is mr. president. president obama made history as the first minority to be elected president. even many who opposed his election felt proud of our country as he took the oath of office. as president, he inherited the headwinds of the worst economic recession since the great depression. he pushed through congress the biggest economic recovery plan history and what a government reorganization of two of the big three american automakers to save them from oblivion. he pursued domestic and foreign- policy agendas that are controversial to many, highlighted by his signature into law of the most comprehensive health care legislation in history. the budget plan's proposed by the president on the one hand and republicans on the other hand are not even on the same planet. many democrats believe his

agenda doesn't go far enough and many republicans believe it goes way too far. while we fought be to doubt -- while we thought the 2008 white house race was rough and tumble, the 2012 race makes it look like bumper cars by comparison our country has become even more polarized. the 1% and a 99% are at each other's throats. campaigns are now funded by secretive, multimillion-dollar superpacs. the only thing anybody seems willing to compromise on is -- i can't think of anything. [laughter] really, who would want this job in the first place? we are honored today to have the man currently holding the office and aspiring for another term and, with apologies to al green, my new favorite singer.

ladies and gentleman, the president of the united states of america. [applause] [applause] >> thank you so much. thank you. thank you very much. please have a seat. good afternoon and thank you to dean singleton and the board of the associated press to inviting me here today. it's a pleasure to speak to all of you and to have a microphone i can see. [laughter] feel free to transmit any of this to vladimir if you see him. [laughter] clearly, we are already in the beginning months of another

long, lively election year. there will be gaffes and minor controversies, there will be hot microphones and etch-a-sketch moments. you will cover every word we say and we will complained vociferously about the unflattering words you write, unless you are writing about the other guy, in which case, good job. but there are also big, fundamental issues at stake right now. issues that deserve serious debate among every candidate and serious coverage among every reporter. whoever he may be, the next president will inherit an economy that is recovering, but not yet recovered. from the worst economic calamity since the great depression.

to many americans will still be looking for a job that pays enough to cover their bills for their mortgage. to many citizens will lack the sort of financial security that started slipping away years before this recession it. a debt that has grown over the last decade, primarily as a result of two wars, to massive tax cuts, and an unprecedented financial crisis will have to be paid down. in the face of all these challenges, we will have to answer a central question as a nation -- what, if anything, can we do to restore a sense of security to people were willing to work hard and act responsibly in this country? can we succeed as a country where a shrinking number of people do exceedingly well while a growing number struggle to get

by? or are we better off when everyone gets a fair shot and everyone does their fair share and everyone plays by the same rules? this is not just another run-of- the-mill political debate. i have said it is the defining issue of our times and i believe it. 2008 and it's in what my presidency has been about and it's why i'm running again. i believe this is a make or break moment for the middle class and i can't remember a time when the choice between competing visions of our future has been soaked unambiguously clear -- and so unambiguously clear. keep in mind, i've never been somebody who believes government can or should try to solve a problem. some of the know my first job in

chicago was working with a group of catholic churches that often did more good for people in their communities than any government program could. in those same communities, i saw no education policy, no matter how well crafted, can take the place of the parents love and attention. as president, i've eliminated dozens of programs that were not working, announced over 500 regulatory reforms that will save businesses and taxpayers billions, and put annual domestic spending on a path to become the smallest share of the economy since dwight eisenhower held this office. since before i was born. i know the true engine of job creation in this country is the private sector, not washington, which is why i have cut taxes for small business owners 17 times over the last three years. i believe deeply that the free

market is the greatest force for economic progress in human history. my mother and grandparents to raise the value personal responsibility. i also share the belief of our first republican president, abraham lincoln. a belief that truett government, we should do together what we cannot do as well for ourselves. -- truett government. that belief is the reason this country has been able to build a strong military to keep us safe, and public schools to educate our children. that belief is why we have been able to lay down roads and highways to facilitate travel and commerce. that belief is why we have been able to support the work of scientists and resources -- and researchers whose discoveries have saved lives, unleashed

technological revolutions, and led to countless new jobs in new industries. that belief is also why we have sought to insure every citizen can count on some basic measure of security. we do this because we recognize that no matter how responsibly we live our lives, anyone of us, at any moment, might face hard times, might face bad luck, might face a crippling illness or lay off. so we contribute to programs like medicare and social security which guarantee health care and a source of income after a lifetime of hard work. we provide unemployment insurance which protects us against unexpected job loss, and facilitate the labor mobility that makes our economy so dynamic. we provide for medicaid, which

make sure millions of seniors in nursing homes and children with disabilities are getting the care that they need. for generations, nearly all of these investments from transportation to education to retirement programs had been supported by people in both parties. as much as we might associate the gi bill with franklin roosevelt or medicare with lyndon johnson, it was a republican, lincoln, who launched the trans continental railroad, the national academy of science, the land grant college. it was eisenhower who launched the interstate highway system and new investment in scientific research. it was richard nixon who created the environment protection agency. ronald reagan worked with democrats to save social security. it was george w. bush to add a prescription drug coverage to medicare.

-- who added prescription drug coverage to medicare. what leaders in both parties have traditionally understood is that these investments are not part of some scheme to redistribute wealth from one group to another. they are expressions of the fact that we are one nation. these investments benefit us all. and they contribute to genuine, durable economic growth. show me a business leader who would not profit if more americans could afford to get the skills and education that today's jobs require. ask any company where they would rather locate and hire workers, a country with crumbling roads and bridges or one committed to high-speed internet and high- speed railroad and high-tech research and development? it doesn't make us weaker when we guarantee basic security for the elderly, sick, or those who

are actively looking for work. what makes us weaker is when fewer and fewer people can afford to buy the goods and services are businesses sell. when entrepreneurs don't have the financial securities to take a chance and starting a business. what drags down our entire economy is when there is an ever widening chasm between the ultra rich and everybody else. in this country, broadbased prosperity has never trickled down from the success of the wealthy few. it has always come from the success of a strong and growing middle class. that is how generation who went to college on the gi bill, including my grandfather, helped build the most prosperous economies world as ever known. that is why a ceo like henry ford made it his message and -- made it his mission to pay his workers enough so they could buy

the cars that they made. that's why research has shown that countries with less inequality tend to have stronger and steadier economic growth over the long run. yet, for much of the last century, we have been having the same argument with folks who keep paddling some version of trickle-down economics. they keep telling us that if we convert more of our investment in education, research and health care into tax cuts, especially for the wealthy, our economy will grow stronger. they keep telling us if we strip away more regulations and let businesses pollute more and treat workers and consumers with impunity, somehow we will all be better off.

we are told that when the wealthy become even wealthier and corporations are allowed to maximize profits by whatever means necessary, it's good for america and their success will translate into more jobs and prosperity for everyone else. that is the theory. the problem for advocates of this theory is that we have tried their approach on a massive scale. the results of their experiments are there for all to see. at the beginning of the last decade, the wealthiest americans received a huge tax cut in 2001 and another huge tax cut in 2003. we were promised that these tax cuts would lead to faster job growth. they did not. the wealthy got wealthier, we

would expect that. the income of the top 1% has grown by more than 275% over the last few decades to an average of $1.3 million a year. but prosperity sure did not trickle down. instead, during the last decade, we had the slowest job growth in half a century. the typical american family actually saw their incomes fall by about 6% even as the economy was growing. there was a time when insurance companies and insurance -- and a financial lenders did not have to abide by strong enough wedges -- strong enough regulations and found ways around them. what was the result? profits for these companies soared, but so did people's health insurance premiums, patients were repeatedly denied care, often when they needed it most, families were enticed and

sometimes just plain tricked into buying homes they could not afford, huge, reckless bets were made with other people's money on the line and our entire financial system was nearly destroyed. we tried this theory out. you would think after the results of this experiment in trickle-down economics, after the results were made painfully clear, the proponents of this theory might show some humility. might moderate their views a bit. you would think they would say, you know what? maybe some rules and regulations are necessary to protect the economy and prevent people from being taken advantage of by insurance companies or mortgage lenders. maybe, just maybe, at a time of growing debt and widening

inequality, we should hold off and giving the wealthiest americans another round of big tax cuts. maybe when we know that most of today's middle-class jobs require more than a high-school degree, we should not get education or lay off thousands of teachers or raise interest rates on college loans or take away people's financial aid. but that's exactly the opposite of what they have done. instead of moderating their views even slightly, the republicans running congress right now have double down. they have proposed buzzed -- proposed a budget so far to the right it makes the contract for america look like the new deal. in fact, that renowned liberal, newt gingrich, first called the original version of the budget

radical. he said it would contribute to right wing social engineering. this is coming from newt gingrich. this is not a budget supported by some small group in the republican party. this is now the party's governing platform. this is what they are running on. one of my potential opponents, governor romney, has said he hopes a similar version of this plan from last year would be introduced as a bill on day one of his presidency. he says he's very supportive of this new budget and he even called it marvelous. which is a word you don't often hear when it comes to describing the budget. [laughter] it's a word you don't often hear generally. [laughter]

here is what this marvelous budget does. back in the summer, i came to an agreement with republicans in congress to cut roughly one trillion dollars in annual spending. some of these cuts were about getting rid of waste, others were about programs we support but cannot afford given our deficits and our debt. part of the agreement was a guarantee of another trillion in savings for a total of about $2 trillion in deficit reduction. this new house republican budget, however, breaks are bipartisan agreement and proposes a massive new cuts in annual domestic spending. exactly the area where we have already cut the most. i want to go through what it would mean for our country if

these cuts were to be spread out evenly. bear with me, i want to go through this because i don't think people fully appreciate the nature of this budget. the year after next, nearly 10 million college students would see their financially cut by an average of more than $1,000 each. there would be 1600 fewer medical grants, research grants for things like alzheimer's, cancer and aids. there would be 4000 fewer scientific research grants, eliminating support for 48,000 researchers, students and teachers. investments in clean energy technologies helping us reduce our dependence on foreign oil would be cut by nearly a fifth. if this budget becomes law and

cuts were applied evenly, starting in 2014, over 200,000 children would lose their chance to get an early education in the headstart program. 2 million mothers and young children would be cut from a program that gives them access to healthy food. there would be 4500 fewer federal grants at the department of justice and the fbi to combat by the crime, financial crime, and helped secure our borders. hundreds of national parks would be forced to close for part or all of the year. we would not have the capacity to enforce the laws that protect the air we breathe, the water we drink, or the food we eat. cut to the faa would likely result in more flight cancellations, delays, and the complete elimination of air- traffic control services and parts of the country.

over time, our weather forecasts would become less factor because we would not be able to afford to launch new satellites. that means governors and mayors would have to wait longer to order evacuations in the event of a hurricane. that's just a partial sampling of the consequences of this budget. you can anticipate that republicans may say that we will avoid some of these cuts since they don't specify exactly the cuts they would make. but they can only avoid some of these cuts if they cut even deeper in other areas. this is a math. if they want to make smaller cuts to medical research, they have to cut even deeper to things like teaching and law enforcement. the converse is true as well. they want to protect child education, it would mean further

reducing financial aid to people who are trying to afford college. perhaps they will never tell us where the knife will fall, but you can be sure that with cuts this deep, there is no secret plan or formula that will be able to protect the investments we need to help our economy grow. this is not conjecture. i am not exaggerating. these are facts. these are just the cuts that would happen the year after next. if this budget became law, by the middle of the century, funding for the kinds of things i just mentioned would have to be cut by about 95%. let me repeat that. those categories that is mentioned, we would have to cut by 95%. as a practical matter, the

federal budget would basically amount to whatever is left in entitlements, defense spending, and interest on the national debt, period. money for these programs that have traditionally been supported by bipartisan basis would be basically eliminated. the same is true for other priorities like transportation, homeland's security, and veterans' benefits for men and women who risk their lives for this country. this is not an exaggeration. check it out for yourself. this is to say nothing about what the budget does to health care. we're told medicaid would simply be handed over to the states. that is the pitch. let's get out of the central bureaucracy, the states can experiment, there will be able to run the programs a lot better.

but here is the deal the states would be getting. they would have to be running these programs in the face of the largest cut to medicaid that has ever been proposed. a cut that according to one non- partisan group would take away health care for about 19 million americans. 19 million. who are these americans? many are someone's grandparents who, without medicaid, will not be able to afford nursing home care without medicate. -- without medicaid. many are children. some are middle-class families with children with autism or down's syndrome. some are kids with disabilities so severe that they require 24- hour care. these are the people who count on medicaid.

then there is medicare. because health care costs keep rising and the baby boom generation is retiring, medicare, we all know, is one of the biggest dryers are long term deficit. that is a challenge we have to meet by bringing down the cost of health care overall for seniors and taxpayers who share in the stakes. but here's the solution proposed by republicans in washington and embraced by most of their candidates for president. instead of being enrolled in medicare when they turn 65, seniors to retire a decade from now would get a voucher that equals the cost of the second cheapest health care plan in their area. if medicare is more expensive than at private plan, they will have to pay more if they want to enroll in traditional medicare. if health care costs rise faster than the amount of the voucher, as, by the way, they have been

doing for decades, that's too bad. seniors bear the risk. if the voucher is not enough to buy private plan with bit specific doctors and carry need, that's too bad. most experts will tell you the way this voucher plan encourages savings is not through better care or cheaper costs, the way these private insurance companies save money is by designing and marketing plans to attract the youngest and healthiest seniors, cherry picking, leaving the older and sicker seniors in traditional medicare where they have access to a wide range of doctors and guaranteed care, but that makes the traditional medicare program even more expensive and raises premiums even further. the net result is our country will end up spending more on health care and the only reason the government will save any money is at -- is because we money is at -- is because we have