a day. >> the moment, you have seconds to take a picture. you don't have 10 or 20 different moments. you have two or three moments in a day. [inaudible] not in a perfect way, but the best way possible. it is difficult. for me, i never received any pressure. the pressure is at least mine. i want to show the story in the best way. i want to go again and again. and sometimes these guys stop you.

tyler, you were once interviewed by chris. he asked you how it has changed you personally, smoking, drinking, exercise? >> chris exposed a lot of my history on that one. the probably took it easy on me. if you are going out into place, you have to be healthy. you have to be able to stay up with -- i am 42 years old, you go out on patrol with these guys that are between 18 and 25 years old. you have to be able to keep up with these guys. sometimes it is straight of about 10 or having to run 300 meters. -- straight up a mountain or having to run 300 meters.

there are no -- chris and i both run, go to the gym. we hope that the young guys around us smoke a lot and have slowed themselves out as much as possible. it has changed me a lot, and not just the physical stuff. but the way that you value life, friends get hurt, get killed, you learn to value life more. every time i go home, i spent time with my parents, my friends. you really appreciate what you have, especially how people are

living. libya and syria this year, the way that people live there are atrocious. i think, i am really lucky. your physical mental health are the of important things that you have. >> you just debunked the myth of the hard drinking, hard smoking war correspondent. >> i had my sleeping bag, soldiers were helping me. now i have becomed more disciplined. i have the correct box, and i'm

not bothering anybody. i can work myself. also, i have to be fit. if you have to walk of 40 degrees, and you can't do it, are you killed in syria or the soldiers in afghanistan? you have a no-losing perspective. i'm thinking that things can be really worse. this is not so bad.

>> i think you said that it was important not just for your well-being but the people that you are with that you are fit. so that you don't put anyone else in danger. >> if someone has to divert their resources, time, and attention to help you, and something happens on that control, you are accountable for that. you represent the industry, your newspaper, your wire service, magazine, a network. you have to make the impression of being a serious human being. whether it is libya and rebels or syria rebels or chechnyan gunmen, you had better be able to make it. you better not slow them down or need help. if you get hurt, you are part of

it and you will get the hell, but you better not need attention because you can't keep up. i wondered whether i would get out of this beat. i often think, the first patrol i lag on will be the day that i stopped, or if i get hurt. i don't think i could face myself if i knew that i slowed a patrol down. if you go out there like tyler said, you have to have life habits. you can't say i'm going on a six-hour patrol today. you don't know when you're coming back. things are going on and on. you have to be a bill tohang -- be able to hang.

>> and sometimes you sleep three hours in 10 days one week or when we exit like this in syria, and you have to be very quick and if you are not fit you not only put yourself in danger, you could be in danger for not only your life but all of them. >> we have a room full of journalists and there must be some questions. we have a mic here. >> i guess this is a question of rod fourrigo mo -- of rodrigo mostly. some newspapers ran the name of the boy and his father's name, some did not. just describing it in general

terms. i wonder if you can speak to those kinds of specifics and whether you think they are important, and whether they are important in humanizing the situation. and whether that matters. >> each situation is completely different. because you write the name of the person whose picture is going to risk their lives, you don't do it. there were examples and syria, it was there phase at their names. you have to respect that. you always have to respect that. if somebody reads my name, they are going to kill me.

if someone looks at my picture, they will kill my relatives. you have to respect people you're taking pictures of. that's not only a professional thing, it is a human thing. in terms of that picture, i don't think there were any problems riding the name of the little boy -- writing the name of the little boy. i don't think it was a problem. >> i thought it was a very good thing. >> there are cases where if you do it, even if you think it is correct, you are really putting into real danger the life of that person.

>> we withhold names all the time if we think that lives are in jeopardy. it is not every day, but it is not uncommon. there was an informant in forming against the president of chechnya. we waited until they got their family members out of chechnya and out of russia. a lot of times, you have to look to your conscience, not just that your -- at your scoop. >> yes, sir. >> i'm the former editor of the austin american statesman. you talk about battle coverage very appropriately. my question is more toward the broad, overarching story of what this means, how and why of the story.

it seems to me that you do that much more, summing up the pathway of a nation and its battle. cultural shifts, strategic issues that are pretty hard to pin down. you are doing that story amid chaos. you only have one or two or three sets of ties rather than vast platoons of reporters or photographers. your resources can be good sources, but they can be bad, too. how different is it coming up with the howl and why story -- how and why story? when do you know that you have it? when you come to grips with that?

>> when you talk about the pathway of the nation, do you talk about the nation's in which we are working or this nation? >> [inaudible] >> i would like to pop the balloon here. we talk about what we do as if it is fascinating and important. it is a smaller part of a much larger enterprise. we cover field hospitals, rebels, front lines, or live back from the front, how it is affected. the way that you cover a war is not just to go to the frontline. you have to go to the cemetery, the mosque, the church, the congress, tracking what candidates are saying. you have to have reporters on both sides of that point to the extent it is possible.

withnot really possible the taliban at this point. everything we do fits into a much larger conversation. i don't think that i have to write a story that defied the decade of war. i don't take that as possible. i think i would look back on it and laugh at. everybody's work fits in with everybody else's. you make this great big mosaic. some days i have to back up and provide some of the more broader views. sometimes the editors asked for it, sometimes i feel it in my bones. you get a point of view. about a lot of things. sometimes it finds its way into my copy. sometimes it is a magazine

piece. but i try to keep in perspective. i don't think that at the end of my career, my body of work is going to tell you that much. i hope it will answer the question you said. you can't swing for the fences every day. >> [inaudible] >> it tells a big story, thank you. but it doesn't tell the entire story. i rely on those that do things differently. i am really glad that there are people that do it well. i remember in the marine corps, i was committed to it. how does eric schmidt know things about the marine corps that i don't know.

it was really good, it was really true. i was in that culture, and he was adding to my understanding of it. if you have a good picture or a good story, you can increase the reader's understanding a notch, that's great. three notches is incredible. re-order the world with one story, i can't do that. >> bill with usa today. the lead story in the times this morning is the u.s. joint effort to equip and pay rebels in syria. based on your time and experience, what is the nature and capability of this opposition that america is now supporting? >> having spent a good amount of time in libya at the beginning of that conflict, something i can say about the

abilities, something that i touched dodd and the article that i wrote for the paper -- touched on in the article that i wrote for the paper. you have defectors from the syrian army. they are small in number, but they are skilled, military people. it may not look different from a bunch of guys with weapons running around the field. when you were there, the organization and skills that is much higher -- and skill set is much higher. when they get money and weapons, which is what i have heard that they are about to get, it is not going to make their ability a lot higher, but

it will cause a much bigger flood of defections. i think that they will have an impact. and reflecting what anthony said, the hour before he died, i was standing next to him when the people that were helping us did a little interview, you are about to head to the borders with sunset. this is actually the last question that anyone asked him. do you think that we will be successful? do you think we will win this war? he said, i do. i think you will be successful, but it will take a very long

time. >> i think it is fitting that we and with anthony's last words. i appreciate the service that you do, i value the work that you do, and i thank you for your generous donation of time today. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> president obama is in florida this afternoon. he will also be talking about his tax reform proposal, the so- called about the role which require americans making $1 million annually to pay at least 35% of their income to taxes. mitt romney getting the endorsement of iowa governor in a news conference within the hour.

mitt romney himself campaigning today in delaware, having a town hall meeting in wilmington. we will have that life for u.s. will just before 6:00 at 5:55 eastern on c-span. >> next, a discussion on the work of the aclu. participants include the executive director, the solicitor general and the new york times a supreme court reporter. among the topics, policing, torture, campaign finance and same-as sex marriage. this is one hour 35 minutes. >> i want to thank cardoza for having me here tonight. as soon as i sat down, i remember the feeling that it was the home of the starship enterprise. [laughter]

i want to thank you for putting this all together and for inviting me. anyway, i am glad to be here. her subject tonight is the aclu. it has been involved in some of the most contentious cases since world war i. at the same time, it is one of the most polarizing nongovernmental organizations we have.

anyway, i am glad to be here. her subject tonight is the aclu. it has been involved in some of the most contentious cases since world war i. at the same time, it is one of the most polarizing

nongovernmental organizations we have. a card-carrying member of the aclu is a badge of honor for some and not for others. i would like the least tried to demystify a little bit of what this organization is, in part how it goes about making decisions as well as some of the cases themselves. the idea is to have a free- wheeling discussion that i will lead. no speeches. in opening statements. -- no opening statements. i would discourage everyone to jump in, to feel free to pick up on one another's comments, agree or disagree. and remind us briefly what those cases are about. onward. the briefest of introductions, i want to get everybody involved really quickly.

since september 2001, just before the attack on the world trade center. when i talked with anthony the other day, he said, i am happy to do this. i want to go into the things we have done wrong. here is your shot. fill in the blank. it is a poll raising organization because it is -- what? >> because it has not done a good enough job explaining what we do and why we do it. i think often, and we are trying our best, but we need to do better. when we take on a case, and the issues are unpopular, and it is self-evident to us why we take on the case, we need to go the extra step and explain. even among friends of mine and family members of my, when we

defend the civil rights of the homophobic, disgusting reactionary christian minister to mao funeral -- to mouth funeral protests at the burial of men and women coming back for more, saying that the the reason that men and women in uniform are being killed is because god's protection because we're giving the people like me their rights. i get a phone call from my sister say, are you kidding me? what happened to you? [laughter] and we have to really unpack it. i do not think it is self- evident. by sister is brilliant. i sister is a good person with great values. it is not just a hypothetical that you allow these loathsome points of view to be centered than the points of view that you like -- then the points of view that you like our next to mine. it is like tear gas.

you think it is blown in one direction and the wind will blow it back into your eyes. you think you but censorship anyplace where it belongs. you better close your eyes. >> ted olson was the solicitor general for the bush administration who argued many important cases before the supreme court. the aclu is a polarizing organization because it is what? >> i disagree in the bill with the premise. i know that the aclu is unpopular in some places because it does what it does, which is to represent unpopular causes. but i never felt that way, personally. i know that other people do, especially conservatives. and i think of myself as a conservative.

but i oso think of myself a little bit as a libertarian. in a conservative world, there is not a monolithic conservative world or republican world. there are a lot of libertarians are people who carry a lot about liberties at that part of the political spectrum. anthony does not want this to be a love fest, but i will try to say unpopular thing so he can defend me. [laughter] and i will always love you. [laughter] ofwe're getting more out this than i ever expected. >> hi thought maybe we would have the proposal take place in private. [laughter] but i am personally very

grateful for the aclu and i always have been. i grew up in california. i think that would be silly you does is tremendous. it protects all of us. but i will not go on and on about that because you did not want this forum to be that. but i think that it is very important that we recognize that the aclu takes these petitions because -- these positions because someone is accused of a crime something like that and the aclu is protecting all this. i think that one of the things we will eventually talk about is that the choices that the use tip -- the still you makes, -- that the aclu makes, the civil liberties of one person can infringe on the civil liberties of another person >> absolutely. >> darrow purse fine -- debora parole stein -- debora perlstein.

>> we are a pretty friendly group. >> if things don't work out, i may come back. [laughter] >> the door's always open. >> as i was watching the film, i was thinking about the history of my first awareness of the aclu. and it was around the not the case in illinois and thinking i had exactly that reaction. i grew up sort of been a jewish household, a liberal household,

and my jews community thought thought, -- that was not designed to be content specific. it is so polarizing and it can be because it attacks the issue. it attacks the issues that are most profoundly divisive. most profoundly counting to us personally as individuals in this society. these are issues. what do we mean, really, when we say free speech?

these go to the heart of who we are as a people. sometimes, we are all susceptible to the idea that it is clear with the answer is in this case. that is a very tempting and seductive way of approaching being a citizen. repeatedly by taking positions, they force us to confront the cases in which it is not that easy. confront the cases in which that is not that easy, where there are pre commitments to some principles require rest to support people we could not possibly dislike more or challenges to really test what it was with what we believe been in the first place. and that is an unbelievably comfortable position to put people in. but you draw something from our nation constitutionalism panel yesterday. there was a concept and roman society that required this is essential to take a certain position. it is not good citizenship to

just stand back as a society confronts major questions and crises and dilemmas. since and chip demand in gauging -- citizenship demands engaging. that is what makes it so challenging for many of us. >> high see that you went to the law school on that other california coast. >> stamford. >> what is your take? >> what is so striking about the aclu is the issue switch have been polarizing in the past have now become completely part of the american fabric. we cannot imagine how it was seen as a fundamental apocalyptic threat to the nation to pass out literature about

communism or union organizing. so the aclu has rallied defined what it is to be in america today and i am grateful for those crusades of the past. my recollection of the aclu is going to your city in the late 1980's when the city was at probably its near anarchy, lawlessness, public places had been taken over by one set of individuals in many instances of mentally ill street addict,

vagrants, that had made public spaces like public -- grand central terminal unusable to other individuals. not to the government, but to other individuals who had a legitimate expectation of being a will to use public transit or public libraries. for all the good that the aclu means to do with its free speech cases, continuing to police the boundary between church and state, i think in many instances, it has been a force of regression against enlightened urban policy.

the prime example is continuing to go on in los angeles where there and villaraigosa, -- where mayor antonio villaraigosa has skid row near downtown that has been and still is because of the court battles that police are fighting a locus of smaller in depravity unlike anything you have ever seen unless you have been there. and the police have been trying to apply broken windows policing in a fair and just manner and they keep getting hit by lawsuits from the aclu and from other homeless advocates down there.

the addicts who are trying to go clean, the elderly residents of the sro's are terrified to go out on the street. and the people who are supposed to be beneficiaries of these are getting preyed upon by other advocates. in some instances, the aclu has lost a common sense of balance of rights and responsibilities that has made the effort to reclaim urban spaces and return american cities to the vitality that they should have and can have as new york city demonstrates and made that more difficult. >> and dave shapiro, it is time to call on you. he is the legal director of the aclu for a long time. >> right. >> would you like to respond to that? lost its balance. >> let me just say that the aclu

does not support squalor. we occasionally support depravity. [laughter] but we do not support squalor. if what we're down to is debating how the aclu response to using tactics and broken windows strategies that i think we have already reached consensus on 95% of what aclu does. that is a pretty good score card. our position is -- i lived in new york, light. i was here not only in the 1980's, but also in the 1970's when it was worse. the question is not whether we all want to live in a more hospitable environment and not whether we want our government to provide services to people who need them, including the homeless and people were suffering from addiction of one sort or another, whether the government is doing that in a way that is an assistant with

the rights of the people it purports to be trying to help and in a way that respects their basic human dignity is. so is not a disagreement over gold, but over tactics. and the issue is more salian today, not so much over questions of homeless policy, but, if we're going to focus on your city for a moment, on the stop-and-frisk policy in the inner-city police department. -- in the new york city police department. but when we are stopping over 600,000 people in the street, less than 1% leading tour rest -- leading to arrest and the majority are racial minorities, then we're getting into public safety and we are losing in terms of the ability of people of color to live in this city

and feel like they're not suspect just because they live in the wrong neighborhood or attend the wrong schools. >> i want to get into that. >> you'll get into the middle of this debate to request i have to get ataman year. -- but i have to get at them in here. he has been a very busy man. there have been some dramatic events in washington. jump in here. >> people seem to think that there is bad faith on both sides of the debate. and the aclu is accused of a certain kind of naivete, particularly about war on terror issues. anthony talks about the false case pitted it is important, but, in a way, it is an easy case. these are not people who pose actual threat to the united states.

these are homegrown puny anonymities. but what about the people we actually have reason to be afraid of? in the last decade, the aclu has fought like hell and achieved very little. there is a product of -- there is a provocative article saying that some of these efforts have been counterproductive. if you go to court and ask for an answer, you may get locked into an answer you do not want. it is polarizing because there are really two different world views that are drifting further and further apart over whether the issues that engage the aclu and these important national- security measures where detention policy, rendition policy, all that stuff -- and

even now when some of the domestic surveillance in ordinary law enforcement like the gps case and the strip search case -- we really start to live if we are living in a different era. if the courts and american society are receptive when we move away from puny anonymity. a peace keeping group that offered to provide the nine assistants to a group that had been labeled as -- provide assistance to a group that had been labeled as a security threat. that kind of benign speech can be made criminal by homeland security. i would be interested to hear some responses from stephen anthony about the strategic choices they have to make day after day over whether they have to even go to court to give

an answer. >> anthony, go ahead. >> he is exactly right. in some cases, the faults cases easy. but you get the phone calls and the outcry is often from people who feel grief. >> i completely agree with you. the national security cases are among the most controversial adopted. i think they are the gold standard of our case.

i get this all the time. why do you care so much about 150 some odd guys? you have 2.5 million prisoners in america. why would we spend millions of dollars on kalik shiek muhammed? why would we bring a case on the drone? in those cases, you are talking about the most critical exertion of government power. the number of individuals directly affected is maybe 100. but when you have the highest rank of government decide to hold individuals without charges or trial, to ship them off to black sites, to

authorize torture, which was hitherto illegal, and then endeavor to obfuscate that from the entire practice, lawyers, the public, you're talking about a high-stakes game that can literally change the course of american history. and when we allow a government like ours to hunt and kill one of its own u.s. citizens, not in a theatre of war, with no assertion of legal framework, no assertion of the fact, and then killed him without any judicial review, where the executive branch is to be judge, drury command executioner, the stakes are enormously high. those powers, once taken, are very hard to take back. in the case of mr. lucky, we have had enormous discussion. i think it is -- mr. lockheed, we have had enormous discretion.

i think it is one of our product cases. i have gone to washington, d.c. with members of the democrats and the republicans and everyone in the room thought that we got anwar lockheed. and they all said, well, we got him. and i was the only one of the table who said how do you know? what proof have you got? how do we know that he did not have a massive conversion last year when he was being hunted by his own government. we now believe that people can change their mind, the people can lay down their weapons. what proved to we have that is man's rea, the minute before he was executed by his own government -- i am glad to take

on the hard ones. that makes this more fun. where are the checks and balances? you have the president of united states, the attorney general who was appallingly pedestrian in his speech when he talked about due process does not mean judicial process, right? i am quoting verbatim. what is due process mean? it has to be the big adjudicative method for due process. they cannot confirm or deny the it existence of this program that i just laid at you in excruciating detail kit you have to say, my god, what type of republic are we talking about?

at times, it often feels that we are at the cusp of losing the very basic rules -- and i am not exaggerating -- the most basic protections of what defines a republic. and those checks and balances, even if it is only one person in yemen, we ought to be very skeptical. >> you were there at this very debate of executive power post- 9/11. >> it is not ours that easy. i do not like the idea of defending a program where we kill american citizens without some sort of process or things like that.

but i think you have to look at it from both sides when we're having this kind of a conversation. if you have individuals and if you are in the executive branch and you are sworn to defend the people of the united states and they are engaged in activities -- and they are plotting and you know that -- they are plotting to blow up a flight on which our citizens will fly or they are going to blow up a synagogue, one of the similarities we have in this country is the right to fly, the right to travel on an airplane, the right to go to a wedding or a public building, to have their children protected when they are trying to go to school, protected from things that happen in israel all the time -- synagogues being bombed and school children being killed

with missiles -- if your responsibility is to protect the american people from that and you have someone who is in another country that you cannot possibly bring to justice before that crime or that mass act of terrorism is committed and you're unable to go to those places and bring them to justice in a courtroom, not going to be able to bring the witnesses and put them on trial, and you have the capability of preventing the disaster from happening, you are now thinking about the civil rights of this individual who is preparing -- and anthony says, maybe the moment before the missile strikes, he is having a conversion, but maybe he has killed lots of americans

already. and he has equipped other individuals to kill other americans said that is already going on. now you have the rights of that individual to something that anthony calls judicial process, which you cannot possibly bring about. >> the question should be decided by the general? >> i'm getting to the dilemma. this is not an easy thing to answer. and you put those rules civil- rights -- those civil rights against the people your sworn to protect against acts of despicable terrorism. you do not have a choice to do it the way everybody would like, which is to bring someone into court, have all the witnesses, miranda rights, brady writes, all of those kinds of things -- you do not have that choice. so you allow that to happen until you do the thing that you cannot do, which is to bring about this judicial process or use a drone or some other method of killing that

individual. i think it is extremely difficult. you could kill the wrong people. you could kill children there in the vicinity of that suspected terrorists. it does happen. it does happen in war. and it happens when you send soldiers into the field and they are defending themselves. they do not have the luxury of stopping someone and then giving their rights and giving them a lawyer and then trying them. they have to shoot and kill or they will die. so these things are -- i am with the aclu on these things. i am glad you're there. i am glad you are fighting for those things. but at the end of the day, sometimes, people in positions of responsibility have to make decisions because this is not a perfect world. >> i work with anthony and stephen when i went to guantanamo on the first trip

that they let the ngo's -- >> after a very long and hard day looking at the military condition. [laughter] >> it was a very special trip. [laughter] on many levels. i wanted to get back to the broader point that saddam was raising and that goldsmith has been talking but in his book, the notion that the still huge positions in these cases has been either not at all productive -- they have not especially achieved anything in terms of promoting liberty -- but they may also be counterproductive. i guess i really think that is

wrong and i at least think that the answer is a lot more complicated than that. for example, torture is an issue that i spent an enormous amount of time working on when i was at an ngo working on these issues. there was a time before, in 2002, where we have reports out of afghanistan where prisoners had blunt force trauma and we couldn't get anybody to listen. in the meantime, you had people on the right and left say, of course, you can torture, depending on how scary the issue is. then we have a grave -- we had of a grave -- we had abu graib. tens of thousands of pages of documents showed more than 100 detainee's died in u.s. custody. then they have different interrogation tactics. it was a radically different debate.

there's a passage of a bill in congress saying that you cannot treat people in custody with cruel and degrading treatment and there was a series of executive orders by obama that effectively ended the use of those tactics in american custody across the board. that is one example of what i think -- we don't even talk about it anymore. it seems like the sort of helped fix that. is it eradicated? no. to the extent the claim is that this is counterproductive, what is the argument? is the argument that, if the aclu had done nothing, we would have been better off because the hundred people that were at guantanamo would have been

released anyway -- because the 800 people that were at guantanamo would have been released to you? it does point to a question that is about the budget of strategy. the aclu has the best negation shops in the country. how did you decide when to lee did -- when to litigate and when to negotiate. the odds are you will lose. so what are you gaining potentially in terms of calling attention to the issue and everything else versus what your potentially losing if you get a losing decision at of the court that changes the law is going forward? that is a tough call. >> let me just make a few quick points.

nobody pretends otherwise. it is also true on this specific tissue around terrorism that the united states is not the only country facing terrorism. is the only country that uses the drones against its own citizens. in answer to the question of how the lawsuits been counterproductive, especially a lawsuit that you meant as a going in that you may lose, that is a question that we ask ourselves every day in the office. this is a mantra that people have heard me say over and over again give if we think the chances of winning are slim, we are not in the business of

losing lawsuits, unless we can identify other benefits that we can obtain simply by fighting. the mere fact that the lawsuit brought promise to the issue, which forced public discussion, which led to the attorney general's speech, which is then leading to a whole series of responses, none of the debate would have taken place or it's not for the spotlight that the loss to created. adam was saying that the earlier cases in the movie were simple. they were simple in hindsight, but not at the time. there is a famous concurring opinion where he votes to uphold the detention.

and then he said he wished that the military would pick up these people and put them in camps and no one would come to ask your approval. then, after the war, everybody would have gone back and we would have not done anything through law that would have lasted more permanently. but now you ask us to ratify this and that principle hangs and you can call upon it in the future. >> you sounded sympathetic to the goldsmith argument. >> i was trying to be provocative. [laughter] half a lot of the work that the aclu has done -- >> a lot of the work that the aclu has done has

gone a long way. the foil litigation used to be done more because we were richer. the aclu has taken on their role that we should still be doing -- clinics popping up in places like yale law school which is a measure of how much less of an economic engine the press is. on this question about drones

and killing people, it is right in the war paradigm. before the soldier shoot, he does not have to get a warrant. but if the attorney general is going to invoke the concept of due process and then redefine it, i do think you want to stop and active -- and ask if that is due process to you. it does seem to be the presentation of evidence, the ability to counter that evidence, a neutral party, perhaps a lawyer representing to you. some kind of testing of the evidence. i would think that in a setting where it can be judged by the

public, to see if our government is doing the things they want them to be doing through some kind of paradigm that sounds like with the attorney general is talking about. but we have no idea. we don't have a clue what kind of procedures are going on here. >> heather, you got us going here on the domestic front. -- >> heather, you got us going here on the domestic front. to the same arguments apply in the broader context? >> said think they do. -- i think they do. i think these are agonizing questions and i applaud the aclu for taking on a democratic administration. many of the traditional allies of the administration have gone silent. -- silent on the continuing

challenges presented by the war on terror. i think they have shown themselves to be very principled and they are raising very important questions. but there is a discourse out there that criticizes the growth of lawfare, that we are imposing on a war context too much of a due process paradigm in a war context. the parallel, in a domestic context, mr. shapiro mentions the issue that we all want to , economically people on the street. and that is true. i think they're using the court as a surrogate for making social and economic policy and courts are not good at treating off competing interests. so if they get on the order, for instance, on prison

litigation where we spent x amount on prisoners' rights, that may be dispensable in the abstract, but -- defensible in the abstract, but it ignores the fact that public bodies have to make trade-offs of what they spend here versus what they spend there. and judges rightly are not often politically accountable so they are short circuit in in think, in many instances a political process. as far as the issue of public safety and policing in new york, i would place that as a rights issue as well. or there has been no greater public's disgust over the past quarter-century -- no greater public policy of the past quarter-century with such success.

gvovernment has never achieved anything like it has in -- in new york city, where you have 10,000 minority males who are alive today, who would have been dead, had new york homicide rates remained at their early- 1990's level. no war on poverty program has brought that degree of thatvement to inner-city saiies assertive data-driven policing has done. stopping frisks and hotspot policing is an essential part of how new york fights crime, but it has nothing to do with race. nothing. every week, the commanders in the new york police department meet to discuss the worst crime areas of the city. and they are concerned about one thing and one thing only -- where are the victims? and race never comes up.

and when they find crime- fighter's occurring, they will -- find crime patterns occurring, they will deploy officers there because, unlike the rap against police for years ago which was that they ignored crime in minority neighborhoods because, all well, we know that is how those people be a, the process that has come -- how these people behave, the process that has come to be known as comstat, that holds precinct officers responsible. it holds them responsible for the safety of the poorest citizens of the city. they use stop-and-frisk when they see suspicious behavior. it has nothing to do with race. by intervening early in suspicious behavior, they prevent crime from escalating. new york city and new york state has had a prison decline unlike many other states, in large part because we are arresting crime before it happens.

we are not waiting for felonies to occur. we are intervening in suspicious behavior. somebody who looks like they may be casing victims, we will ask questions. averting crime, pouring out someone's open whiskey bottle was drinking in public at 11:00 a.m. rather than waiting until 11:00 p.m. when a person is jogd and drunk and could get into a fight and a homicide. i think the aclu has done a disservice to police departments across the country by charging them with racial profiling, charging them with going after suspects on the basis of race, when in fact they are looking of behavior and they are addressing the demands of law- abiding people. if you go to a community meeting in harlem or brooklyn, they want police on the streets and they want them to arrest drug

dealers when they come back and they want more quality of life public order. that has nothing to do with race and the new york police revolution has given a voice to the law-abiding residents in neighborhoods that never had it. >> of.i will ask one question. i will let my boss take over. i think others confusing a lot -- i think heather is confusing a lot of -- or converging a lot of different things. there are things in their policing that are objectionable. if they are only stopping people when there is reason to believe they might be up to something nefarious, which is the constitutional standard, one has to question why 99% of the

people who are stocker never arrested -- who are stopped are never arrested. >> they may be doing something nefarious but there is no evidence for appeared the police cannot always be right. you cannot always assume that everybody you stop and question is going to have evidence of crime on them. it does not mean that the stop was not following a reasonable suspicion standard. but i would also like to ask you a question. the police are often criticized for their stop ratios that do not match the population of the city, that that analysis that -- but that analysis, which is what the aclu frequently uses to charge racial profiling -- in new york city, blacks are 25% of the population and get 55% of all stops. what should the proper stop

ratio be given that blacks commit 80% of all shootings in new york and 66% of all violent crime? the flaw in the aclu's racial profiling analysis is that it uses census data as the benchmark for policing, not crime. crime drives everything at the -- everything that the police do. given the crime disparities, what should a stop ratio look like that would satisfy the seaaclu? do you think that because whites are 35% of the population, they should be 35% of all stops, even though they commit only 1.4% of all shootings? >> anthony, you want to? >> were to begin, really? -- where to begin, really? i grew up in public housing. i lived on the 12th floor. the elevators never worked. the family next to mine was murdered when i was 7 years old. i had traumatic nightmares as a

child. i had cousins who ended up in gangs. i do not to relive the facts that i remember. however, let's just leave aside the arguments for a moment. -- the constitutional arguments for a moment. we'll get back to them. if i want the police to -- thdos it make sense to alienate the families who are essential to fighting crime in these neighborhoods, when you so with these police practices? when you so anger and make good hard working class people like my family fear the police, which we did, and you get harassed like our clients and did in a recent lawsuit in new york where police were stopping people in the hallways because they're black or latino, when you make

communities an essential part of good policing skeptical of calling the police, of giving tips, you are not doing anything for public safety. let's get down to brass tacks. if you're making enemies -- and i would love to go with you to some of these community town hall meetings. you pick some and i will pick some and we can compare notes. it is not all a kumbaya moment for people of color in the bronx when they see police walking down the street nor have they been held relentlessly accountable. read the newspapers. we cannot even get convictions for cops who rape women when they are on duty. i think there are some very fine men and women in uniform and i have one cousin, joey. [laughter] there are very many problems with the ways in which they are asked to do what are very difficult jobs.

that being said, we also cannot look to the fact that some crimes get more attention in police department. i want to get back to national security, but the local issues are very important. civil liberties has to be a product you deliver locally. you have to have offices in many states. we have offices in states across the country. you have to work locally to deliver civil liberties. that being said, the issue is how you deal with crime. we are the only organization in the country with on the ground staff presence in every step across the country because you have to work locally for civil liberties. that said, the issue is how you think about crime. it is amazing to me the lack of prosecutions in the neighborhoods by for the most, wall street. we want to talk about crimes and we talk about the great tragedies of stripping people's

pensions and homes and we look at the fbi, the police department, the justice department and the policy record of going after career criminals -- white collar criminials and pushing communities into further deprivation and poverty. policing is not all even-handed. i would have to check the statistics on how many community members are committing crimes. figuring out the balance on these issues there are big tradeoffs in these big cases. there are always trade-offs. the question is where you come

at it philosophically. the question is whether or not, in the name of the common good, you will be willing to abide an infringement of civil liberties. or whether you believe in protecting all civil liberty, you promote the common good. and we've become so reductionist to from it that way. you're right. there are many calls to make in government. but sometimes the intelligence is wrong. we have gone to war over intelligence that was wrong. that was purposely positioned to the american people and the world community as wrong. sometimes the facts are not as clear and that is why you need some kind of judicial body to make sure that what they assert is not just what they assert, but the truth. at the end of the day, when the stakes are so high on life or death, literally, you do not

have the luxury of resurrecting some when you have killed wrongfully. that is where scrutiny is most necessary. you convict someone for the wrong crime and the dna is there and you can let them out. but you cannot resurrect a person that you target for assassination. that raises the stakes of why we pick these cases. they are life-and-death circumstances. the power that is being exerted is such a at a level and nature that it is enormously troubling and provoking. there is torture going on in american prisons every day. so why do we care about the torture in guantanamo and thandm more than torture of the l.a. county jail. because the torture in guantanamo is done b-- is

sanctioned by the highest levels of government. i will close with this. heather, you say that we short- circuit a political process by filing lawsuits. we short circuit -- the notion that a short circuit the political process by bringing a lawsuit, i think that we kickstart the political process by bringing a lawsuit. there is no way that there is a political constituency for the guantanamo detainee or the people were targeted by the government. you have to turn to the courts. that is the role of the courts. to protect the minority from the winds of the majority. on criminal-justice issues, the reason why we're having so much success on criminal justice reform -- and we have -- just read the newspapers. i can send you the clips.

geriatric prisoner bills enacted in louisiana, mississippi enacting a law reform efforts, new york, california -- that is because we filed the lawsuit ans and becaue legislatures were forced to take a look at the set of questions and now we can resolve it with to do legislative process. when you carry a big stick, sometimes you use it and create political will on issues that are difficult to convince people on because they're not very nice people -- criminals or terrorist suspects -- and you force political leaders to take on water sometimes very difficult -- what are sometimes very difficult issues by forcing them down the road. >> i would say that, on skid row -- i would disagree with your characterization of client s of the aclu as typically

politically powerless. i would say that, on skid row in los angeles, there is no shortage of advocates who takeover the entire pedestrian routes for their encampments of people shooting up drugs and attacking each other. -- in 2006, a meantlly -- meantally -- a mentally ill woman was stomped to death by a parolee. that night, there were 82 shelter beds available on skid row. the business improvement district could persuade only t wo people who are living on the streets to use them. those people have lots of advocates who were living on the streets or advocates who are immigrant entrepreneurs who are coming in the morning, having to clean hypodermic needles or feces from their doorsteps, or other business owners down there who needed to get to work and they are mostly immigrant workers.

i think there is also -- it is not just individual rights against the government and the common good. that is simplified. it is one group of individuals against another group of individuals who are not these days very well served by our advocacy groups or by the courts. the judges in downtown l.a. who have been ruling on the ruling -- rolling set of lawsuits that have been brought do not seem to have spent much time on skid row to actually see the efforts of the police there to try to convince people to get treatment, to take advantage of the services that are available to them and improve life for everybody. >> all of these issues deserve panels of their own, don't they? but there are even more issues to be put on the table. we have four students here and it is their school. so, i want to bring them in.

they can raise some of these. i will start with you. >> you want to ask a question about citizens united. please. >> thank you very much. >> i read that there has been some controversy over thwithin e aclu's ranks over the citizens united decision. i read the organization filed an amicus brief in favor of the petitioners in the case before the supreme court. that raised a lot of -- dander with critics of the decision. i was wondering what the aclu curr opposes current position hs changed or whether it remains the same. what can you tell us -- what can you tell us what if any impact that debate had on their position?

position?aclu's >> before i answer, could i ask you? you raise this at the beginning. you said this was a great moment. >> i did. >> i do not remember if i mention citizens united. >> i did. [laughter] >> but i did not. [laughter] i will be glad to say a word or two because i know a little bit about it. the briefs that were filed supporting what i would say as the right of organizations to participate in the political process by expressing their views about the qualifications of candidates for office, the amicus briefs were filed by the aclu, the fl-cio, the sierra

club, the nra, the chamber of commerce, the democratic party. and the republican party. there was a immense broad spectrum of a meek as briefs -- of amicus briefs supporting was ultimately the supreme court's decision. the case involved a nonprofit entity that was created to be an advocacy organization. it was formed as a corporation, it is like the aclu and the naacp. they also had an amicus brief in that case. and so, and i think the question relates to what the aclu has done subsequently with respect to contributions. i do not think you have changed positions with respect to expenditures that happen to be formed into a corporation. nonprofit corporation, small business corporation, a hardware store corp. -- the new

york times corporation, bless its heart, has written maybe 22,000 editorials against the citizens united case. [laughter] maybe it is fewer than that. one of the things the new york times says a bout that is that it is wrong that corporations have these constitutional rights, overlooking the fact that new york times versus sullivan is one of the leading firmament of the aclu adnd everybody else who -- >> we will break away and take you live to pennsylvania for campaign an ounce and from rick santorum. -- a campaign announcement from rick's santorum. >> thank you very much. it is always an honor to be here.

it is a beautiful town, gettysburg, such a historic town. first and foremost, i want to thank everybody for the outpouring of paris over the past weekend -- of prayers over the past weekend. we had a difficult weekend. good friday was a little bit of a passion play for us with our daughter, bella, who is the joy of our lives, getting unfortunately -- getting, unfortunately, very sick. she is a fighter. she is doing exceptionally well. she is back with us and the family. we look forward to spending a lot of great time with her. but it did pause -- cause us to think. as the role that we have as parents in her life and with the rest of our family, this was a time for prayer and bought over the past weekend. just like it was, frankly, when

we decided to get into this race. my wife and i and the kids sat at the kitchen table and talk about our hopes and fears and concerns. we were very concerned about our role as being the best parents we possibly could be to our children and making sure that they have a country where the american dream was still possible. i think a lot of concern that we had for our family was that, what was going on in washington, d.c., and all the problems that you've heard me talk about on the campaign trail, that the american dream was slipping, not just from the hands of average americans, but for all americans, that that dream was slipping away. as the parents, that we ought to go out and do what we could take and that responsibility for our children and for children across this country.

we started out almost a year ago now. i told my story, our story of our family, my grandfather, who came to this country and worked in the coal mine. my father, who served our country in world war ii. we have talked throughout the campaign about my stories and the stories of our family. after a while, it became less about my stories and more about what -- what kept us going were your stories, the stories of people across america that we had the privilege of getting the chance to know and to interact with. when you travel around -- one such story was a guy named jack who had a pickup truck -- chuck who had a pickup truck, who joined our team. drove around for months in his dodge ram truck because he

believed that we had the best opportunity to turn this country around. i met a lot of folks in iowa but i will never forget. -- in iowa that i will never forget. a man of strong convictions welling up with tears, about what is going on with our country, particularly national security. the constitution is one of the vitally important legs we have forgotten. alike -- people like wendy, our best volunteers. she passed away shortly before the caucus. she is someone i remember, her passion for the least of us. those of us on the margins of

society, as many would have looked at her. even today, it is because of our daughter, bella, folks into our rally one after another -- folks came to our rally one after another. children in wheelchairs saying, "i'm for bella's dad." just a beautiful idea of a not- story, but their stories. -- of not my story, but their stories. we wereforget it, still winning, touching issues and raising issues -- touching hearts and raising issues that people did not want to have raised. a young man came to our first event in oklahoma.

he had spina bifida. he wanted someone who spoke about people who are overlooked by society or do not seem to be as valuable as others in society. folks like the duggars, the duggar family who traveled with us in their bus and gave us their time and energy because they believe in the importance of having strong families as part of a strong country. we cannot have a strong economy, as you have heard me say over and over, without strong families and a strong moral fiber that makes us the moral enterprise that is america. even on things like a sweater vest -- [laughter] amazing thing, that sweater vest. it happened on a night i was doing in a bent for mike huckabee -- doing an event for

mike huckabee. i gave a pretty good speech that night. all of a sudden, the twitter saying "itwild, must be the sweater vest." from then on, the sweater vests became the uniform of the campaign. we sourced it to a company making them in united states. we went to that little company in minnesota in the middle of winter. it was a beautiful day. we got a chance to see that little plant that had been around for almost 100 years. it turned out where the best customer that the mills there have ever had in their history. it has been a wonderful story

after story of people who have come forward. those who put together a song in tulsa called "game on." over 1 million hits on youtube 4 that catchy little tune -- for that catchy little tune. even those who want to make it a winner-take-all primary. it has been inspiring to me, the stories that we have been engaged with. it turns out that it really was not my voice i was out communicating. it was your voice, the voice that you gave me from the stories and experience i had. people say, how did this happen? how were we able to come from nowhere? it was because i was smart enough to figure out that if i understood and felt at a very

deep level what you were experiencing across america and try to be a witness to that, tried to beat an interpreter of that -- be an interpreter of that from your voice be heard and miracles could happen. mircale after -- miracle after miracle happened. i want to thank god and thank you for everything you have given. a voice to those who, in many cases, are voiceless. have tried to be a witness not just for your stories and your voice, but to provide a positive vision, not an negative campaign. we did hundreds of town hall meetings. we were not trashing anybody. we painted a hopeful and positive vision for our country, one that was based on how we could get this country turned around, not just economically,

not just economically, but reflecting the hopes of americans, not just the fears of americans. the hopes of americans confronting the violent, radical islam, the surge of iran, what we could do to take on the problems of a sluggish economy as washington has grown so big. we put forth a solid and concrete plans, many of which came from the people i had an opportunity to interact with throughout the campaign. we did focus a lot on the families, and the dignity of human life and a moral enterprise that is america. one of my favorite articles was one that joe klein wrote. "rick santorum was inconvenienced -- "rick santorum's inconvenient

truths." we talked about how we would build a copy -- a country from the bottom up and we carry around our copy of the constitution. that got the tea party folks excited. we talked about the operator's manual of america being discarded by those in washington. i tried to bring to the battle what abraham lincoln brought to this battlefield back in 1863, november 19. he talked about this country being conceived in liberty and dedicated to the proposition that all men are created equal. he was quoting the declaration of independence. we talked about the declaration as the heart of american exceptionalism. we will never be a country that can go forward as a great and our book country unless we remember who we are -- great and powerful country unless we remember who we are. that is what our campaign was about -- what made as americans, how we built the country from

the bottom up, how we could be successful in the future, how we must believe in ourselves and leave in the ability to go forward and do the same thing. against all odds, we won 11 states, millions of voters, millions of votes. more counties than all the other people in this race combined. we spread the message far and wide across the country. what we found is support and a deeper love for this country. every state that i went to -- everyone who follows as around would hear me say, i love this state. it was a love affair for me, seeing the differences. seeing the wonderful people of this country who care deeply about where this country is going, who care deeply about those who are out there feeling left behind and, in some respects, feeling hopeless.

ladies and gentlemen, we made a decision to get into this race and our kitchen table, against all the odds -- at their kitchen table, against all the odds. over the weekend, we made the decision that this presidential race is over for me and we will suspend our campaign effective today. we are not done fighting. we will continue to fight for those voices. we will continue to fight for the americans who stood up and gave us that air under our wing that allowed us to accomplish things that no political expert would have ever expected. there is a lot of greatness in this country. we needed leaders who believe in that. who are willing to give voice to that. who are willing to raise us up instead of trying to provide for us and do for us what we can better do for ourselves. that is the message that came to

me. it is one that i feel very good about continuing to talk to americans about. i walked out after the iowa caucus victory and said game on. i know a lot of folks will now write game over. but this game is a long way from over. we will continue to fight and make sure we defeat president barack obama, that we when the house back, and that we take the united states senate, and we stand for the values that make us americans, that make us the greatest country in the history of the world, that shining city on the hill, to be a beacon for everybody for freedom around the world. thank you very much. god bless you. [applause]

>> thank you, everybody, for coming. appreciate it very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> two weeks ahead of the pennsylvania primary, rick santorum says, "the race is over for us, for me." news reports indicate that he called mitt romney to tell him of his plan. the candidates talk about the weekend spent concerned about their youngest daughter, the santorum's youngest daughter, isabella, bella, who was in the hospital this weekend. ericsson terms of spending his campaign. we want to hear what you have to say -- rick santorum

suspending his campaign. we want to hear what you have to say. go to facebook.com/cspan to let us know what you think. coming up, we will take you to boca raton, florida. president obama will be talking about the buffett rule. he will be speaking at florida atlantic university. that is at 2:55 eastern. we'll take you there live when it starts. mitt romney has a campaign event today. he picked up the endorsement of the governor of iowa. he will speak this afternoon at 5:55 eastern. >> while we wait for the

president, we will bring some of this morning's "washington journal." host: vice president joe biden will make another pitch for the bill on thursday during a campaign stop in new hampshire. the white house is targeting gop

senators in florida, ohio, missouri, pennsylvania, iowa, north carolina, and that, as well as tennessee, massachusetts, maine, nebraska, alaska, and indiana. democrat, 13 of whom have co- sponsored the bill, give the measure little chance of -- democrats relished the prospect of putting freshman on the record on the subject. "the washington times" said this morning that, although the president portrayed the tax increases as a necessary ingredient of the opposite production, it would raise an estimated $47 billion over the next decade, less than 1% of the deficit projected under mr. obama's own budget forecasts. on the campaign front this morning, here is "the washington post," out with a new poll. in a hypothetical matchup between the president and the

former massachusetts governor, mitt romney, a new poll shows that president obama holds an edge over likely republican presidential nominee mitt romney on personal attributes and various key issues. president remains vulnerable to discontent with the pace of economic recovery and the two pressing issues of the race, economy and jobs, the contest is more competitive. santorum, the former and pennsylvania senator, is back on the campaign trail after he took a break due to his daughter's hospitalization. he says that he will be out on the campaign trail today, tuesday. in his home state of pennsylvania. also this morning, it says in the papers that president obama is in a tough spot on the issue of gay marriage. in the game marriage opinion poll, president barack obama faces pressure to declare

support for gay marriage. more people think it should be legal. march, 2010, 52% said it should be legal compared to 43% who said illegal. this is the washington post/abc news poll conducted on march 7 through the tent. this was reported this morning in the baltimore sun co -- in the "baltimore sun." we are opening up the phone lines. kim, a democratic caller in houston, texas. caller: how is it humanly possible for the righteous right -- the concern to christians to entertain putting a mormon in the white house? i want them to bear in mind this question. what god he be praying to?

the one that he was able to do 14 steps to become a god? i think that is part of their ritual. also, could you guys have something on regarding that organization? bye-bye. host: a program note. we will be talking about social conservative issues and religion next with dr. richard land in about 40 minutes. chris, a democratic college in atlanta, georgia. -- caller in atlanta, georgia. >> i want to, -- caller: i want to comment how you read that article about obama and gay marriage. most americans are starting to come along and be ok with gay marriage. obama is closer to them than the gop. why would the headline not the

top spot for gop as opposed to "tough spot for president obama "? this is what the talk about when they say c-span is a gop political arm. it is as simple as that. "the washington times," "the washington post," "washington journal" -- they are all conservatives. you do the headlines. the headlines are misleading. >> we also do -- host: we do a lot of different papers. ""the boston globe," -- we do not write the headlines. we're just letting you know what people here in washington are reading and what the headlines are. that headline that you reference is "the baltimore sun. -- sun." supporters of gay marriage want a president ought to include this in the democratic platform.

ray, a republican >> good morning -- republican, good morning. caller: romney said that he is conservative, but he is not because of the fact that he is a mormon. mormons go for mormons. christians follow the teachings of christ, which is the opposite of what the mormons believe. host: is this enough of an issue that you will not vote for mitt romney if he becomes the nominee? caller: that and the fact that i am a christian and i do not believe in abortion. he is pro-abortion. host: so, you do not trust mitt romney on social conservative issues? caller: that is correct. he is moderate. moderates can turn around and

change. host: ray, are you still there? is rick santorum your candidate? caller: yes, he is. -- n't see how romeny romney -- they already have them as the candidate. host: we will leave it there and move on to tennessee. go ahead. caller: good morning. i was calling to talk about the gop and the negative ads. they could put all the money that they want out there, but people are looking at what is going on in their lives. they want the control. they did not want to help people get jobs. they say there are the job creators -- they say they are the job creators.

they are just destroying stuff. they just want to destroy obama. they are not thinking about the poor people. they are taking all of that money -- and that could be used for people. >> -- host: you might be interested in the breakdown of people. there is no double-digit advantage for either candidate. one is creating jobs. president obama gets 46% to mitt romney's 43%. on social issues like abortion and same-sex marriage, presented obama comes in with 76% of those and he leads over mitt romney's 38%. no double-digit amended when it comes down to those issues. , today's washington post

"romney's woman problem." more than 60% of american voters don't even know romney's position on the mandate, a topic they rank near the bottom of their political concerns. when pressed, a majority of women affirm that religious institutions should be exempted from the mandate. this is not particularly good news for romney. his difficulties would not be saw by handing out the pill at his rallies or by a balloon drop of inflated condoms at the republican mentioned in -- at the republican convention in tampa. stamford, conn., but, a republican -- bud, a republican. we are on open phones.

caller: thank you for c-span. i am against the idea of legalizing gay marriage. first of all, it is hijacking the word marriage. marriage is a union between a man and woman for the purpose of having children. hijacking the word marriage just writs against my grain -- just grits against my grain. waht a -- what about aids? did that just go away. it is suddenly acceptable, so somebody gets elected to the white house for a second term " to mark i am totally against that idea? -- or second term? i am totally against that idea. host: the syrian foreign minister said the government has begun withdrawing forces from syrian cities. we will continue to watch this story. the headlines in the papers this morning say this. here is the "wall street journal."

serious fight spills over borders. today is the deadline, april 10, for the u.n.-brokered peace plan. special envoy kofi annan brokering that with the leader of syria, but it looks like, according to the "wall street journal," u.s. was outraged by the cross-border attacks. turkey condemned monday past attacks and said the cease-fire was -- confer -- turkey condemned monday's attacks and said the cease-fire was now void. they called for the prosecution of those two words -- those who were responsible for the cross- border deaths. they say this un-brokered peace deal is a failure. a civil war is taking place in syria. mr. obama may believe that --

that is "the washington post's" opinion. "the new york times" says -- we will talk again more about the situation in syria as well as afghanistan when we go live from the united states institute of peace from located about 20 blocks from where we are on capitol hill, close to the state department and across the river from the pentagon. it is a new, permanent home for the squad as a federal agency.

-- for this cause i-federal agency. -- or this quasi -- for this quasi-federal agency. we will talk about what it does on its own as well as with the money it receives from the federal government. an independent from tennessee, good morning. you are on the air. go ahead. caller: someone a couple of calls back was talking about obama and jobs. he was a union president. he turned down jobs for south carolina, tennessee, and the pipeline. at and we live another four years under a president that would not -- how can we live another four years under president that would not give people a raise on -- yet the house of representatives got raises?

the poor people did not get a raise for three years. the only reason they got a raise on their check this year was because it is an election year. now he has got the job bill's going -- bills going. host: earl, you are on the air. caller: is for taking my call. i was listening to the previous program about -- thank you for taking my call. i was listening to the previous program about latino americans. i want to know the difference between an undocumented american, a latino american. what is the difference? host: why is this important to you? caller: we grew up in a certain debt -- in a certain generation. we have seen the conditions change. undocumented-- is someone who has come in legally and does not have papers?

what's the difference between hispanic, which most of us consider to be from mexico, and latinos? we normally think about argentina, somewhere like that. host: which party is better on this issue of immigration o, in your opinion? caller: think the democratic, on the whole, is better. i understand the republican party. in many ways, i am conservative. i look at both points of view. they both have certain things going for them. republicans are looking at it as a way of maybe retaining power in certain areas. latinos -- hispanics seem to vote democratic. the democratic party is looking at it as a way to get more votes. but i do not think they take into consideration the broader american people's point of view

is that, at this time in american history, immigration, particularly illegal immigration is killing jobs. it is a job issue with the majority of americans. it has nothing to do with what country they come from. host: when you go to the polls on nov. -- in november, 2012, where does this issue right for you in terms of how you will vote -- rank for you in terms of how you will vote? caller: i will vote democratic. host: no matter what? caller: i would not say no matter what. you'd have to go pretty far to change my point you. on immigration, i am about 50%- 50%. i have seen pro and non-pro. host: let's hear from a republican in minnesota. you are on the air.

caller: good morning. it is interesting that people like democrats always complain that there isn't enough money to go around, but we will not control our border where all the money is going out. the illegals and the money back to central america and mexico. all them black people keep on voting for obama and get that obama money. if that is what they are, they have been slaves for 40 years since the war on poverty. there are more people in poverty in the black population now, percentage-wise, then there were in 1964 when lyndon johnson was president. host: some other headlines for you this morning. usa today --

that is down 44% from 61.8% in 1991. the article goes on to say, in "usa today," that -- there was no change in the percentage of sexually active teenage girls, but significant increases in the use of contraception, which suggests contraception is driving the numbers. that is a front-page story in "usa today" and other newspapers this morning.

also in "usa today," "autism puzzle coming together." today on the front page of the paper -- it is still a mystery across the country for researchers. autism now afflicts more than 1 million children across the united states. it is associated with the spectrum of disabilities. also the business section of "the new york times" has this story about the minimum wage. minimum wages that are higher -- new york, new jersey, massachusetts, connecticut, an illinois are among the states -- and illinois are among the states considering raising the minimum, some to $10 per hour. willy in jacksonville.

caller: good morning. i want to say for the folks in the trayvon martin caisse -- case. the people who think that mr. zimmerman was correct in his actions, they do not have anything to worry about. they have this lady from jacksonville, the va -- the d.a. or something. they have 105 justifiable homicides here. nobody has been prosecuted here. for the family and friends of mr. zimmerman, don't even worry. she will have it like you want it. host: are you referring to the "stand yourr ground -- "stand your ground" laws? caller: that and the integrity

of the person running it. she cannot handle it in jacksonville. this is worldwide. this is on al jazeera. host: the headline you refer to is in the "new york times." "florida prosecutors kips grand jury review in maarten shooting case." -- caller: attorney-general hol, go back to the election of 20008 and there were some misappropriated people in philadelphia in a bunch of black hoods and they kept people intimidated to keep them from voting. he was charging $1,000 per

person to buy drugs in istanbul. the worst drug in america is alcohol and nobody does anything about that. attorney general holder has all the money to the party in europe. do people in c-span have gone so far to the left. now you do not even take calls in order you're given them. you people are a joke. host: rob in mason city, iowa. caller: you guys are probably the most fair and balanced option for people to give their opinion. the last caller, i think is way off base. this is regarding to the caller refused calls ago saying "the washington post" is a right- wing newspaper. i don't know. host: independence in

philadelphia. what is your name? -- independt caller? are you there? i do not think i have the right number. caller: how are you doing? host: what are your thoughts? caller: brandon from dover. the one caller that just called in about taking phone calls, i think he was perfectly right. i get upset because i hear people calling in telling their side of the story, but nothing ever happens. i almost feel like it's a waste of time for me to call in because nothing ever happens. host: what do you mean nothing ever happens? caller: everybody has the same problems, illegal immigrants, jobs. to me it seems like an easy fix.

the people in washington are making it harder than it really is. they do not want an easy fix. we're living in an oligarchy. they are all working together because we are on the same team. you never have one that does not like abortion and does not like the death penalty. they all switch up about what they like and do not like. none of them stick to their true actual values that their religious preferences are. they cannot because the world is to divers. it obama says he is a christian, he should not be for gay rights. he cannot because then he will not get any votes. it is the same with other people running for president. there are certain things, i do not care what your religious preferences. they need the votes. host: speaking of washington and

who is in power, the most tenured gop senator is in peril. senator richard lugar, struggling to deflect an onslaught of attacks by tea party to but pfizer's trying to oust him in favor of state treasurer murdoch. the national rifle association here is a leg at the two republicans inside the paper this morning. he is 7 percentage points behind the incumbent there, senator lugar, whose approval ratings have been in the 70%-75% range for two years. it is rating has now dropped and he is struggling to reach even dipped a% of support. the front page of "the boston globe"as the this story about

scott brown. >> we will break away from "washington journal" and go live to vote cretonne florida. president obama is speaking at florida atlantic about his tax proposal. live coverage on c-span. >> hello, florida. [cheers and applause] thank you. [cheers and applause] how is everybody doing today? welcome it is great to be back in florida. it is great to be back in boca. it is great to be here at the

home of the fighting owls. i want to, first of all, thank a denver not only leading us in the pledge of allegiance but also giving a great details about burrowing owls. explain it all to me and then told me he wants my job. i explained to him that the constitution required for him to be 35 years old. i will keep the seat warm for him. for a few more years. i want to thank for back out for that extraordinary performance. -- thank rebecca for that. she wants to be a teacher. she is an english major. we need great teachers out

there, so we are very proud of her. i want to thank your president, m.j. saunders, the mayor of boca raton for hosting us here today. we also have your outstanding senator and former astronaut, which is really cool, bill nelson in the house. [applause] a wonderful congressman, ted george, is here. and my great friend, congressman dan wasserman shultz's here. -- debbig wasserman shultz. and you are here, which is exciting. >> we love you! >> i love you back.

[cheers and applause] i know this is a busy time of year. some of you are one month away from graduation. we have some seniors in the house. pretty soon you will be closing the books for the last time. maybe you will be making that one last trip to the beach. or coyote jack's. you will be picking up that diploma that you worked so hard for. your parents will be there, they will be beaming and full of pride. and then comes what people call "the real world." i actually think colleges part

of the real world. transitionre's a that will take place. some of the will go on to post- graduate degrees but some of the will be out there looking for work. colleges the think the most important investment you can make in your future. -- college is the single most of gordon investment. i'm proud that you have seen this through. i know that the future can be uncertain. we have gone through the three toughest years in our lifetime economically. the worst financial crisis, the worst economic crisis. our economy is now recovering, but it is not yet where it needs to be. to many of your friends and neighbors are still hurting, still looking for work. too many are still searching for that sense of security that started slipping away long for

the recession hit. -- long away before the recession hit. i have the "amen" corner over here. we'd ask ourselves is central fundamental question. what we have to do to make sure that america is a place where, if you work hard, if you are responsible, that the hard work and responsibility pays off? the reason it is important to ask this question right now is because there are alternative theories. there is a debate going on in the country right now. can we succeed as a nation where a shrinking number of people are doing really, really well but a growing number are struggling to get by? or are we better off when everybody gets a fair shot? [cheers and applause]

everybody does their fair share. everybody plays by the same set of rules. that is what the debate in america is about right now. this is not just another run-of- the-mill gab fest in washington. this is the defining issue of our times come a make or break moment for the middle-class. everybody here is aspiring to get in the middle class. we have two very different visions of our future. the choice between them could not be more clear. keep in mind, i start from the belief that government cannot and should not try to solve every single problem we've got. government is not the answer to everything. my first job in chicago when i was not much older than all of you was working with a group of

catholic churches on the south side of chicago in low-income neighborhoods to try and figure and how we could improve the schools, strengthen neighborhoods, strengthen families. i saw the work that some of these churches did doing more good for people and their communities than any other government program could. in those same communities, at the matter with how well crafted the educational opportunities were to take the place of a parent's love and affection. i also believe that since government is funded by you that it has an obligation to be efficient and effective. that is why we have eliminated dozens of programs that were not working, announced hundreds of regulatory reforms to save businesses and taxpayers billions of dollars. we have put annual domestic

spending on a path to become the smallest share of our economy since eisenhower was in the white house, which was before i was born much less you. i believe the free market is the greatest force for economic progress in human history. but here is the thing. i also agree with our first republican president, a guy from my home state, a guy with a beard named abraham lincoln. [applause] what he said was that through our government we should do together what we cannot do as well for ourselves. that is the definition of our

government. that is the reason we have a strong military to keep us safe. i suppose each of us just could grab what ever is around the house and try to defend our country, but we do better when we do it together. we have the best military in the history of the world with the greatest men and women in uniform. we pay for that. [applause] that is why we have public schools to educate our children. you know, if we did not have public schools, there would still be some families who would do very well and could afford private schools or home school, but there would be a lot of kids who would fall through the cracks, so we do that together. it is one of the reason we have laid down real roads and highways. we need to get our neighbors and friends to say we should go build a road. that is why we imported the

research and technology to save lives and create entire embassies, the internet, gps. all of those things were created by us together, not by ourselves. it is the reason why we contribute to programs like medicare and medicaid, social security, and unemployment insurance. [applause] because we understand that the matter how responsibly we live our lives, eventually we will get older. we know that at any 0.1 of us may face hard times, bad luck, a crippling illness, or a layoff. together rebuild this safety net, this basis of support that allows all of us to take risks,

try new things, maybe try to get a new job because we know that there is a base for us to rely on. but these investments in things like education, research, health care, they have not been made as a grand scheme to redistribute wealth from one group to another. this is not some socialist dream. the have been made by democrats and republicans for generations because they benefit all of us and they lead to strong and durable economic growth. that is why we have made these investments. [applause] if you are here at florida atlantic because you have a financial aid -- [cheers] a student loan, a scholarship,

which was how i finance my college education and how michele did. that just does not benefit you, it benefits whenever company may end up hiring in and profiting from your skills. it's one of you goes on to become the next steve jobs or mark zuckerberg, or when you discover the next medical breakthrough, a think about all the people whose lives will be changed for the better. we made an investment in you and we will get a return on the investment. [applause] when we guarantee basic security for the elderly, the sick, or those actually looking for work, it does not make us week. what makes us week is when cuban-americans can afford to

buy the products for businesses themselves, when your people are willing to take risks because it does not work out and they worry about feeding their families. what drags our entire economy down is when the benefits of economic growth and productivity go only to the tube, which is what has been happening for over a decade now, and the gap between those at the very top and everyone else keeps growing wider and wider and wider. in this country, prosperity has never trickled down from the prosperous you. it has always come from the bottom up, up from a strong and growing middle-class. [applause] that is how i generation who went to college on the gi bill, including my grandfather, helped build the most prosperous

economies of the world has ever known. that is why a ceo like henry ford made a point as workers enough money so that they can buy the cars they were building. there is no point in me having all of this and then nobody can buy my cars. i need to pay my workers enough so that they buy the cars and that, in turn, create more business and prosperity for everybody. this is not about a few people doing well. we want people to do well. that's great. it's about giving everybody a chance to do well. that is the essence of america. that is what the american dream is about. that is why immigrants have come to our shores, because the idea is it does not matter what your name is, what you look like -- you could be named obama. you could still make it a try. -- you could still make it if

you try. [applause] yet, we keep on having the same argument with people who do not seem to understand how it is america got built. the people we have political arguments with, they are americans who love their country. democrats, republicans, independents, we all love this country, but there is a fundamental difference in how we think we move this country forward. these books keep telling us that if we just weaken the regulations to keep our air or water clean, protect our consumers, if we would just convert these investments that we are making to education, research, and health care, if we

turned them into tax cuts for the wealthy and somehow the economy would grow stronger. here is the news. we tried this for eight years before i took office. we tried it. [cheers and applause] it is not like we did not try it. at the beginning of the last decade, the wealthiest americans got two huge tax cuts, in 2001 and 2003. meanwhile, insurance companies, financial institutions were all allowed to write their own rules, find their way around the rules. we were told the same thing we're being told now -- it will lead to faster job growth, greater prosperity for everybody. guess what? it did not.

yes, the rich got much richer. corporations made big profits. we also had the slowest growth -- slowest job growth in half a century. it the typical american family saw their income fall by about 6% even though the economy was growing. the average middle-class american was not seeing more of their paycheck. health-care premiums skyrocketed. financial institutions started making bets with other people's money that was reckless. and then the entire financial system almost collapsed. do you remember that? it was pretty recent. some of these science majors in here at -- i like that.

we need more scientists and engineers. i enjoyed science when i was young, and if i recall correctly, it is it -- if an experiment feels badly you learn from that. right? sometimes you can learn from failure. that is part of the data that teaches you stuff, it expands our knowledge, but you do not then just keep doing the same thing over and over again. you go back to the drawing board. you try something different. that is not what is happening with these folks in washington. they are peddling the same triple-down theories, including members of congress and some people running for a certain office right now who shall not be named. [applause]

they're doubling down on these broken down theories. it really did not work and we almost had a second great depression, so maybe we should try something different. they have doubled down and proposed a budget that showers the wealthiest americans with even more tax cuts and pays for these tax cuts by cutting investments in education, medical research, clean energy, health care. audience: boo. >> of the cuts they're proposing are spread out evenly across the budget then at 10 million college students, including some of you, wednesday

or financial aid cut by an average of more than $1,000 -- would see your financial aid cut by an average of more than $1,000 each. thousands of medical research grants for things like alzheimer's, cancer, aids would be eliminated. tens of thousands of researchers, students, teachers, all lose their jobs. our investments in clean energy that are making us less dependent on imported oil have been cut by nearly one-fifth. by the time you retire, instead of being enrolled in medicare, you would get a voucher to play for your health care plan -- to pay for healthcare, but if health care costs rise faster, like a house, the rest will come out of your pocket. if the doctor is not enough to buy a plan with the specific doctors and care you need, you

are out of luck. by the middle of the next century -- by the middle of this century, by 2050 come at a time when most of you will have families of your own, funding for most of the investments i talked about today would have been almost completely eliminated altogether. now, this is not a in exaggeration. this is math. the republicans objected. they said, "we did not specify all of these cuts." welcome you did not because you knew that people would not accept them. you just gave a big number. what we did is do the math. this is what it would mean. they say they did not the typical propose to cut student loans. ok. if you do not cut student loans, then that means you have to cut even more. the money has to come from somewhere.

you cannot give over $4 trillion in additional tax cuts, including the people like me to do not need them and are not asking for them, and it comes from a magic tree somewhere. it you hear them saying, "the president is making this stuff up," no. we are doing the math. the want to dispute what i'm saying, you should show specifically where you could make the cuts. [applause] they should show us. they should show us because, by the way, they are not proposing to cut defense spending, so it is not coming out of there. seoul -- show me. america has always been a place where anybody who is willing to work and play by the rules can make it come a place where

prosperity does not trickle-down from the top but it grows from the bottom, growing outward from the hearts of a vibrant middle class. [applause] and i believe that we cannot stop investing in things that helped create that middle-class, that create real come a long lasting come along-term growth. should not be doing it just so the richest americans can get another tax cut. we should be strengthening those investments. we should be making college more affordable. [cheers and applause] we should be expanding our investment in clean energy. the republicans will tell you they need to make these drastic cuts because the deficit is too high.

our deficit is too high. there are arguments may have a shred of credibility if you did not find out that they wanted to spend $4.60 trillion on lower tax rates. i do not know how many of you are math or business majors, but you cannot pay down a deficit by taking in $4.60 trillion in less money. that is denying that you will be making all of these cuts. it does not add up. it does not make sense. keep in mind, more than $1 trillion in tax cuts they propose would be going to people who make more than $350,000 per year, an average of $150,000 -- again, just taking the numbers with the details they have given us and you spread it out. that is at least $150,000 for

every millionaire and billionaire. each, on average, would get at least $150,000 and some would get much more. we added up all the investments that could take four. -- could pay for. i really do not need this tax break. i have been treated well in this life. i will be ok. malia and sasha will be able to go to college. michelle is doing fine. [applause] understand what this means. here is what $150,000 means. this is what beach millionaire and billionaire would get, on average. this could pay for a tax credit that would make a one year of

college more affordable for students like you. plus one year's worth of financial aid for students like you. plus one year's worth the prescription drug savings for one of your grandparents. [applause] was a new computer lab for this school. plus a year of medical care for a veteran in your family who went to war and risked their lives fighting for this country. [applause] plus a medical research grant for a chronic disease. aus one year's salary for firefighter or police officer. $150 and dollars to pay for all of these things. keep about that. -- $150,000 could pay for that. what is the better.

to make our economy stronger? do we give $150,000 in tax breaks to every millionaire and billionaire in the country? or should we make investments in education, research, health care come and our veterans? -- health care, and our veterans? [applause] i just want to emphasize again that i want people to get rich. i think it is wonderful. that is part of the american dream. it is great that you make a product, create a service, do it better than anyone else, and that is what the system is all about. understand the share of our national income going to the top 1% has climbed to levels we have not seen since the 1920's.

the people benefiting from this are paying taxes at one of the lowest rates in 50 years. you may have heard of this, but warren buffett is paying a lower tax rate than his secretary. now, that's wrong. that is not fair. we have to choose which direction we want this country to go. do we want to keep beating the tax breaks to people like me who do not need them? are given to warren buffett? he definitely does not need them. bill gates has already said he does not need it. or do want to keep investing in that things to keep our economy growing and keep us secured? that is the choice. [applause] boardwalk, i have told you where i stand. -- florida, i have told you were i stand.

it is time for the members of congress to tell you where they stand. we will be voting on the buffet rule. if you make more than 10$1 million per year -- i'm not saying you have that, you have made smart investment, and you have your nest egg prepared for retirement, but you are bringing in more than $1 million per year, the rule says you should pay a percentage of your income in taxes just like the middle- class families to. [applause] you should not get special tax breaks. you should not be able to get special loopholes. [applause] if we do that, then it makes affordable for us to be able to say for those people who make under $250,000 per year that

your taxes do not grow up. we can still make those investments to things like student loans, college, science and all the things that make this country great. this is where you come in. this is why i came to see you. the weather is nice. the guys have been a wonderful audience. [applause] i have learned about the growing -- burrowing owl. one of the reasons i came down here, i want you to write your members of congress, send them an email, tweet them. tell them not to give tax breaks to people like me who do not need them but tell them to invest in the things that will help the economy. we need to bring down the

deficit in the balanced way that is fair for everybody. remind them who they work for. tell them to do the right thing. [applause] as i look out across this gymnasium, everybody here, from all different backgrounds, all different parts of the country, each of us is here because somebody somewhere felt the responsibility for other people. our parents, our grandparents, our great-grandparent than the sacrifices they make. some of this to the enormous risk to come to this country with nothing for a better life for their kids and grandkids. [applause]

a lot of them did without so that you would benefit. thinking aboutt their families, but they were thinking about their communities, their country. that is what responsibility means. as if you have greater and greater opportunity, the scope of you being able to help more people and think about the future expands. you're not just thinking about yourself, but you are thinking about your kids, spouse, family, grandkids, neighborhood, state, and your nation. you think about the future. now, it is our turn to be responsible. it is our turn to preserve the american dream for future generations. it is our turn to rebuild. it is our turn to make the

investments that will ensure our future, to make sure that we have the most competitive work force on earth. to make sure they have clean energy that can help clean the planet and help fuel our economy. it is our turn. [applause] it is our turn to rebuild the roads and bridges, our airports, ports. it is our turn to make sure that everybody here, every child born in what ever neighborhood that they're able to dream big dreams and put blood, sweat and tears behind it that they can make it. i know we can do it. i know we can do it because of you. you are here because you believe in your future. you are working hard.

some of you are balancing a job or a family on this side. it you have a faith in america. you know it will not be easy, but you did not give up. that is the spirit we need right now because here in america, we do not give up. in america, we look out for one another. in america, we help each other get ahead. in america, and i have a sense of common purpose. in america, we can meet any challenge. in america, we can seize any moment. we can make this century another great american century. thank you. god bless you. god bless the united states of america.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] ♪ ["stars and stripes forever"] ♪

>> president obama wrapping up the second three events in florida speaking at florida atlantic university laying out his case for higher taxes for millionaires, the so-called

buffett rule. do you think the buffett rule encourages tax fairness? c-span.org/cspan to give us -- facebook.com/cspan to give us your thoughts. we spoke with one reporter. one week ahead of the tax deadline, the president playing out his tax deadline on millionaires. john mccann is with "the wall street journal." >> this is a minimum tax on millionaires that would require them to pay 30% in the total federal taxes meaning income and payroll taxes. >> what is the typical range someone making over $1 million would pay today? >> not far off, about 25% according to the tax policy center in depth analysis. >> how much additional income is expected that this additional

tax would generate? would it make a dent in the deficit? >> it really would not make a dent in the deficit. as the estimators do these things, they would raise $47 billion over the next 10 years, which may sound like a lot but in terms of the federal deficit is not. the deficit foreseen of the next 10 years are another $6.30 trillion, so it is ridiculously less than 1%. in fairness, it would raise more money if the so-called bush tax cuts were extended. that would mean, in general, millionaires would be paying at a lower rate so imposing a new minimum tax would cost them to pay more. >> in its release today, the white house uses the term "fairness" a number of times. what are they getting at? >> there making the point that under the bush tax cuts people

at the higher end of the income spectrum have been doing a lot better. it is definitely true that statutory tax rate, the official tax rates, have been going down. that is for all income earners, but also for the high income earners in particular. their effective tax rates have been going down. the top 1% are doing better than the middle class. >> what is significant about the locale and the timing of the president's comments today? >> he is speaking in south florida. laura dock, obviously, is an important swing state, the biggest one in play -- floriday i is an important swing state. >> he is setting the table for

action in the senate? >> the senate will try to take up this issue on monday. the first vote will be a procedural vote that they have in the senate in order to end the debate and get to voting on the bill. that procedural vote is expected not to be successful for the proponents of the buffett rule. >> how risky is it among the president's supporters who are undecided to propose a 30% tax for those earning over $1 million? >> it is an issue that really appeals to some sections of the electorate and not others. it is a mixed bag for the president. it does seem to appeal to women, who are an important demographic

for the president. he did not do particularly well with women of the last few years. with the initiative, he seems to be coming up get his approval is improving among women. it also appeals to suburbanites which reflects the influence of women. it is not an issue that the appeals in particular to independents, another group the president needs to worry about. he lost a lot of their support in the first few years of office. he will probably have to look to other initiatives to win at the independent vote. >> johnmckinnon is with a "the wall street journal." -- john mckinnon is with "the wall street journal." >> "when you tax the rich, you lose more jobs." facebook.com/cspan.

a few minutes ago, rick santorum has officially ended his presidential run a few weeks before the scheduled present -- pennsylvania primary. gingrich commented that he waged a remarkable campaign. his success is a testament to his tenacity. ron paul says, "congratulations to senator santorum on mining a spirited campaign." romney this afternoon said senator santorum has proven himself to be an important voice in our party and the nation. we opened facebook up to your comments. again that is facebook.com/cspan. romney is in delaware and speaking this afternoon at a

town hall events in wilmington at a steel construction companies scheduled just before 6:00 p.m. eastern. we will have it live on c-span and c-span.org. the head of the agency regulating fannie mae and freddie mac said the two mortgage holding companies could see benefits for reducing loan amount for some home owners. they said no final decisions have been made on a principal reduction and he defended san helping homeowners face foreclosure. he spoke at the brookings institution in washington. he also talks about the impact of the principal reduction program. this is one hour, 45 minutes. >> hello everyone and welcome. i am pleased to introduce today edward de marco, the head of fhfa. he has been in his current job

for almost three years now serving as the regulator and conservator of fannie mae and freddie mac. since going into conservatorship in 2008, this has cost taxpayers $185 billion and counting. previously, demarco was the deputy office at the housing up federal office -- housing federal office oversight. he also served in the social security administration and was director of the opposite of financial and stick policy at the department treasury. -- of financial policy at the department of treasury. before that, he worked at the general accountability office. perhaps you are noticing a pattern. it is safe to say that director demarco has dedicated his life to public service. it is something he takes very

seriously which leads us back to his present position. "the wall street journal" editorial page noted he is the career civil service that drew the short straw and ended up the acting chief of the federal housing finance agency. and so he sits here today at the center of a controversy having been labeled the nation's top obstacle to economic recovery as well as being called america's most dangerous man while some members of congress calling for him to be fired. he also has a tight brookings. he was a doctoral student at university of maryland and his adviser was my colleague, a long time brookings senior fellow. when we asked hank for his recollection he said, "he was the kind of guy any father would want his daughter to marry." [laughter] hank went on to say that when

you thought ed demarco was in the cross hairs of these various groups he checked to see it was the same person he noun. it would have been hard to anticipate that a person as quiet, and eyes, and mild would ever become the center of the sort of a controversy is in. i'm sure there are many who share this thought including perhaps the director himself. director demarco will speak and then we will moderate a question and answer session. then we will have a discussion of the principal reduction issue featuring several experts in housing finance. with that, i will let director demarco take it away. [applause]

>> good morning, everyone. it really is an honor to be here today. i would like to think karen for that introduction and welcome. it is a particular privilege for me to have hank aaron here this morning. i am very grateful to him for all of the support and died and he gave me -- support and guidance he gave me. i cannot wait to go home and tell my wife how lucky she is. [laughter]

over the past six years, many efforts have been launched by the federal government to stem the losses arising from the housing crisis and to keep people in their homes. some programs have worked better than others, but almost all of them require a trial and error and were more difficult to implement than many expected. as the conservator of fannie mae and freddie mac, the federal housing finance agency has been deeply involved in many of these efforts. we have seen our share of successes and missteps. today, we find ourselves in the midst of a debate regarding mortgage principal forgiveness. with homeowners, the housing market, and the tax payer being best served to provide outright forgiveness for debtors to zero more than the house is worth. i'm grateful to the brookings institution for this opportunity to offer some perspectives on this debate and to provide preliminary findings from fhfa's

was a recent analysis of this issue. i will be not announcing any conclusions today. our work is not yet complete. in view of the state of the public policy debate on this subject, i am pleased to have this venue to enhance the public understanding of this difficult question and to expand how at a chip fay has approached the matter. -- how fhfa has approached the matter. the brookings institute is a home for challenging the policy questions to make this a most appropriate setting for this endeavor. typically, when night began a speech about fannie mae and freddie mac, or the enterprises, i set the context by reviewing fhfa's legal responsibilities as conservator. i do so because i believe it is essential for people to understand that congress considered the objectives they want itfhfa to pursue as a

conservator. they may not be easy to meet, but there are clear. fhfa's job is to preserve the assets of the enterprises and, in their current state, that translates to minimizing tax pare losses \ -- taxpayer losses. we are also charged with ensuring stability and liquidity in housing financing and maximizing assistance to homeowners. today however, i want to set the context for my remarks in a different way -- i would like to begin with a few words on the human element of this housing crisis. throughout this crisis each of us know of, or have heard about, many individual stories of homes lost through foreclosure. one cannot help but have sympathy for those who have suffered such misfortune. and surely no one can look at

the dislocations in the housing market and not feel frustration at how so many people and institutions failed us, whether through incompetence, indifference, or outright greed or fraud. yet we are also blessed in this country with people and institutions who care, who are strongly motivated to provide assistance and find solutions. the staff at fhfa has worked tirelessly since the enterprises were placed into conservatorships to seek meaningful, effective responses to the housing crises. with the staffs at fannie mae and freddie mac, department of the treasury and department of housing and urban development, and numerous financial services companies, fhfa staff has sought to develop and improve on loan modification and loan refinance programs that bring meaningful options to struggling borrowers who want to stay in their homes. in a moment, i will describe these efforts and their progress to date. we know we have much more to do and the strategic plan for conservatorship that we submitted to congress in february identifies that work as one of our three strategic goals. there is another human element in this story that does not seem to receive much attention. clearly, many households got

over-extended financially. some accumulated debts they couldn't afford when hours or wages were cut or jobs were lost. others withdrew equity from their homes as house prices soared. others bought houses at the peak of the market, often with little money down, perhaps in the belief house prices would continue to climb. yet there are other americans who did not do these things. there are families that did not move up to that larger house because they weren't comfortable taking the risk. perhaps they had to save for college or retirement, and did not want to invest that much in housing. and there are people working multiple jobs, or cutting back on the family budget in many ways, to continue making their mortgage payments through these tough times. many of these families are themselves underwater on their mortgage, even though they may have made a sizeable down payment. whichever of these categories any particular homeowner falls into, the decline in house prices over the last few years has reduced the housing wealth

of all homeowners. the federal reserve has estimated that from the end of 2005 through 2011, the decline in housing wealth to be $7.0 trillion. six years into this housing downturn, the losses persist. the debate continues about how we as a society are going to allocate the losses that remain. asking hard questions in this debate does not make one unfeeling about the personal plight this situation has created for so many. indeed, the majority of those most hurt by this housing crisis did nothing wrong -- they were playing by the rules but they have been the victims of timing or circumstance or poor judgment. in short, the human element in this unfortunate episode in our country's economic history stands out and commands our attention. virtually every homeowner in the country has suffered a loss. but that doesn't make the answers any easier. and it poses a deep responsibility on policymakers

to weigh all these factors in seeking solutions, including the long-term impact on mortgage rates and credit availability of the actions we take today. with that as backdrop, my goal today is to answer two questions. what do the enterprises do to assist borrowers through these troubled times in housing? how has fhfa assessed principal forgiveness as an option for assisting troubled borrowers? with borrower assistance efforts. some critics have concluded that fhfa's refusal to allow principal forgiveness raises questions as to the agency's and the enterprises' commitment to helping borrowers stay in their home. to put the principal forgiveness discussion in context, i think it is useful to start by reviewing the enterprises' current borrower assistance programs. the enterprises have an array of foreclosure prevention programs for borrowers that are delinquent or in imminent

default, most of which allow the troubled borrower to stay in their home. for those who are current on their mortgage, refinance opportunities allow borrowers to lower their monthly payment or shorten the term of their mortgage. the primary focus of the enterprises' foreclosure prevention programs is on providing borrowers the opportunity to obtain an affordable mortgage payment for borrowers who have the ability and willingness to make a monthly mortgage payment. let's look more closely at foreclosure prevention efforts. the enterprises' current loan modification programs are designed to help homeowners who are in default, and those who are at imminent risk of default. the first modification program the enterprises use to evaluate a borrower is the -- we will be posting a lengthy

version of these remarks on line. this chart shows that, for troubled borrowers, seeking a loan modification, the mortgage servicer will first work through -- with the borrower to determine what they are eligible for and whether they can benefit from a home affordable modification program. these are the steps that are taken to reduce the borrower's monthly mortgage payment down to 31% of their current gross monthly income. some borrowers are not eligible for cannot benefit from a modification. fannie and freddie have their own proprietary modifications or standard modifications that they also offer. the second column works through that modification approach as well. the idea is to get the borrower

into an affordable monthly mortgage payment. you a note in these columns that they both talked about for bearing on principle. with the principle forbearance modification, a portion of the loan principal amount is set aside. that is the underwater portion. the homeowner does not pay interest on that portion of the loan. this means that a lender allows the homeowner to defer payments on a portion of their principal until they sell their home or later refinance a home. during this time of the deferral, they are paying no interest. this approach allows the enterprises to reduce the payment whilethly avoiding an actual principal right off. interestingly, this is the same approach used in many government-guaranteed loan programs, including the fha program. the enterprises also offer temporary assistance. loan modification is not always the best solution. for someone who lose their jobs,

has a medical emergency, or faces another short-term issue, a lone mod is not necessarily best. in such cases, benny and make -- fannie and freddie allow a borrower to make no or partial payment for period of time. -- for a period of time. there are also plans for borrowers who fall temporarily behind and needed opportunity get back on track. since the start of the conservative ships -- the conservatorship, fannie and freddie had entered into more than 600,000 such plans. there are also non-retention options. most troubled borrowers should qualify for home retention option they have the ability and desire to stay in their homes. if the borrower does not want to remain in their home or has experienced a permanent and significant loss of income that makes continued homeownership in feasible, the servicer is

obligated to consider the borrower for a short sale, a deed in lieu, or a deed in lease. this allows the homeowner to -ell the home in an arm's length transaction. fannie and freddie have completed more than 300,000 such home forfeiture action since conservatorship. fannie mae and freddie mac's instructions to mortgage servicers are clear -- only after all these home retention and home forfeiture options have been exhausted should a servicer pursue foreclosure. let's turn to the results. while mortgages owned by other financial institutions or held in private label mortgage- backed securities have a much higher delinquency rate than those owned or guaranteed by the enterprises, the

enterprises have been leading national foreclosure prevention efforts. fannie mae and freddie mac own or guarantee 60% of mortgages outstanding but they account for only 29% of seriously delinquent loans. even though other market participants hold 71% of seriously delinquent loans, the enterprises account for more than half of all hamp permanent modifications. between hamp and their own proprietary loan modifications, the enterprises have completed 1.1 million loan modifications since entering conservatorship. not only are the enterprises leading efforts in completing loan modifications, the warrants -- performance of their loan modifications have been better than most other market participants .

this shows the re-chief operating. -- re-default date. while there are many decisions involved in what the enterprises should employ principal reduction accommodated modifications -- data on modifications from enterprise loans show that performance is not strongly related to current ltv. while not a definitive analysis, if current ltv had a strong effect, we would expect that the more underwater the borrower, the higher the re- default rate. however, fannie mae data presented in table 3 show that performance on modified loans does not vary much across

current ltv. it is important to note that the performance of modified loans is a function of the payment change, as table 4 shows. this tells us that what matters most is that the performance on loan modifications seems to be more a function of the payment of change to the borrower rather than a loan to value. the greater the payment decrease that the borrower gets, the better the re-performance rate on the modification. collectively, these efforts have made a meaningful impact on reducing foreclosures. since conservatorship, the enterprises have completed more loan modifications than foreclosures and, adding all other foreclosure prevention actions to the 1.1 million loan modifications totals to some 2.1 million foreclosure prevention actions, more than twice the number of foreclosures the enterprises have completed

during this same period. fhfa and the enterprises offered are more assistance for those who are current on their loans. the fhfa developed this program, harp. allows underwater and near- underwater borrowers a pack to refinance their mortgage without allowing -- obtaining new mortgage insurance or some other credit enhancement as would otherwise be required. the enterprises have acquired 10 million refinanced mortgages, of which more than 1 million were harp loans. these results fell short of what we believe we could have achieved. consequently, fhfa engaged with the enterprises from the treasury, and a wide array of market participants to identify

and resolve impediments to the program. the changes were made already. there has been revised -- and increased interest. we expect the volume of such loans to increase in the near future. let me turn now to principle forgiveness. in the original program, principal forgiveness was always permitted, but it was reviews. in 2010, to encourage greater use the principle forgiveness for loans with loan to value ratios above 115% from a treasury supplemented the original program with the hammer principal reduction alternative -- hamp principal reduction alternative. hamp pra is an investor option, not of our war option. it does not require the lender to offer hamp pra even if the

servicer determines it to be net present value superior to standard modification. the take a break on -- the take- up rate on hamp pra has been low. earlier this year treasury announced its intention to triple its current payment incentives to investors who use this approach in hamp. while both original hamp and hamp pra focus on a borrower's "ability" to pay, by reducing the monthly mortgage payment to 31% of a borrower's monthly income, hamp pra also addresses a borrower's "willingness" to pay, by reducing the loan balance. the rationale for the reduction in the loan balance is that a borrower whose mortgage exceeds the home's value may not be willing to continue to make monthly mortgage payments. in other words, even though the borrower may achieve an affordable monthly payment through a basic hamp modification, the borrower may not have the "willingness" to pay because they are underwater. by forgiving principal as part of the hamp modification, the

lower loan-to-value ratio should improve a borrower's "willingness" to pay. in fact, historical data has shown that the probability of default correlates with the borrower's current ltv ratio; the higher the ratio, the greater the likelihood of default. so, in theory, by forgiving principal and reducing a borrower's current ltv ratio, the probability of default is 1 reduced and losses are reduce. this type of relationship between default and current ltv, supported by previous analytic work, is embedded in the hamp npv model, and thus has been explicitly factored into fhfa's repeated analyses of principal forgiveness. some proponents of principal forgiveness would limit eligibility in various ways such as precluding it for cash- out refinance loans or loans with mortgage insurance.

there is no consensus on what such limits should be nor does the hamp pra option impose any beyond the basic hamp eligibility requirements. however fannie mae and freddie mac might apply principal forgiveness, it would have to be clear and transparent, having a basis in the conservatorship mandate and a general acceptance of reasonableness if not fairness. and it would have to be clearly and publicly described so that more than a thousand mortgage servicers could apply the rules the same way. at the most basic level, the comparison between the loss mitigation strategies of principal forbearance and principal forgiveness is related to who gets the upside. for both principal forbearance

and principal forgiveness, if a borrower defaults the enterprises lose the same amount. however if a borrower performs successfully on the modification, in a principal forbearance modification, the enterprises retain an upside up to the forborne amount, but in a principal forgiveness modification, the borrower retains the upside. the borrower redefaults, the loss is the same. if the borrower redfaults -- redefaults later, the loss could be less through forbearance than forgiveness. there is an opportunity for the taxpayer to be repaid the entire principal amount if forbearance is used.

in the case of principle forgiveness, the loss is the same. this basic relationship -- this basic relationship between principal forbearance and principal forgiveness largely explains the results in the analyses that fhfa provided to representative cummings in january. before more fully describing the earlier analyses, one key point is worth reiterating. any analysis of employing principal forgiveness involves more than looking at the npv results. at a minimum, fhfa would have to consider the operational costs of implementing the program, and borrower incentive effects given that three quarters of the enterprises' deeply underwater borrowers are current. in the january analysis, fhfa did not need to go beyond the npv analysis as the results did not indicate that principal forgiveness would produce superior results to principal forbearance.

now let's turn to the latest change to the hamp program, the triple-hamp payment incentives. fhfa is still in the process of analyzing whether they will offer principle predicts this as part of hamp with a triple incentives provided by treasury. i will provide some preliminary findings from repression our earlier analysis, incorporating the triple incentives and altering our model work based on the critiques that our previous work has received. as i noted earlier, in considering principle forgiveness as a loss-mitigation tool, besides the npv impact, we need to consider operational cost and our work-incentive effects. questions or raised about the methodology that we employed in our earlier analyses. to address these concerns, we have made the following adjustments. we have lowered delinquent

borrower fico scores by 100 points to better reflect the current credit standing of the borrower rather than where they were at the time the loan was originated. we have raised delinquent borrower housing payment that income ratios. those that were below 45% have been set at 45%. those above 45% have not been adjusted. we have applied the code level rather than state-level house price indexes to estimate what the current loan to value ratio is of the mortgages. rather than doing the analysis as simply forbearance only versus forgiveness only, this time around, we used the full hamp pra and regular hamp waterfalls to work through what the actual payment for the borrower would be. we have incorporated the triple-incentive payments that

would come to fannie and freddie from doing principal reduction. in addition, the original analysis that we produced considered all enterprise loan that had a current loan to value above 115%, not just the delinquent borrowers. this time, to provide an estimate of the potential hamp borrower pool, the analysis limits it to borrowers that are deeply underwater, above 115% loan to value, and are delinquent on their mortgage today. we did allow for some portion of those who are still current today to roll into delinquency. we assumed 5% of the enterprises' deeply underwater borrowers who are current on their mortgage would roll into becoming delinquent and then be considered for the loan mod. this was not randomly decided.

5% is the rate that we saw from the end of december, 2010, to the middle of 2011. let's look at some of the results. this slide shows that the enterprise losses on these loans are expected to be almost $64 billion if they are not modified. you can see in those columns the $63.7 billion. if we do principle for parents, the model results tell us -- principle forbearance, the model results tell us it would be $55.5 billion. if we use the -- $35.4 billion. the losses could be $55.5 billion to fannie and freddie. principal reduction is better for the enterprises.

it reduces the enterprises' losses by $1.7 billion. the total potential incentive payments from the treasury to the enterprises in this analysis would be $9.5 billion. the expected incentive payments that would actually be paid as much less. it would be $3.8 billion. that is the bottom of the last column. the reason for this difference is that the hamp model allows for and predicts that a good number of the borrowers that get this loan modification are still going to default anyway. if they default anyway, not all of these ends and the payments would get paid. the incentive payments from treasury are paid out over several years. in summary, on a net present value basis, this updated analysis shows a positive benefit to the enterprises of

$1.7 billion and treasury incentive payments to the enterprises of $3.8 billion, which would imply a net cost to the taxpayer of $2.1 billion. this does not account for any offsetting benefits in terms of greater housing market stability if principal reduction reduces total foreclosures relative to standard hamp mods. that benefit is difficult to quantify. as i have noted the npv results alone are not the sole basis for the decision on whether the enterprises should pursue principal forgiveness. one factor that needs to be considered is the borrower incentive effects. that means, will some percentage of borrowers who are current on their loans, be encouraged to either claim a hardship or actually go delinquent to capture the benefits of principal forgiveness? this is a particular concern for the enterprises because

unlike other mortgage market participants that can pick and choose where principal forgiveness makes sense, the enterprises must develop the program to be implemented by more than one thousand seller/servicers. in addition, the enterprises will have to publicly announce this program and borrower awareness of the possibility of receiving a principal reduction modification will be heightened among enterprise borrowers. so as opposed to more targeted individual efforts, or the current opacity of the hamp process, there is a greater possibility that borrower incentive effects would take place on an enterprise-wide principal forgiveness program. it is difficult to model these borrower incentive effects with any precision. what we can do is give a sense of how many current borrowers would have to become "strategic modifiers" for the npv economic treasuryprovided by the ham

incentives to be eliminated. in this context, a "strategic modifier" would be a borrower that either claims a financial hardship or misses two consecutive mortgage payments in order to attempt to qualify for hamp and a principal forgiveness modification. this table provides some sense of the results. if principal reduction was successfully done on all 691,000 borrowers that i talked about, the enterprises would need to have 90,000 additional borrowers strategically modify for that to wipe out the benefit to them of receiving the treasury incentive payments. that is not likely. we are not going to get 100% pull-through on lamont's offering principle forgiveness. -- on loan mods offering principle forgiveness. we will need roughly 50,000

strategic modifiers. if we only add 1/4, we would need only 20,000 current borrowers to strategically modify in order to wipe out the benefit to the enterprises of the incentive payment. keep in mind that the enterprises have about 2 million deeply underwater borrowers today who are current on their loans. finally, in considering whether the enterprises should adopt principal organist under -- principal forgiveness under hamp, fhfa has other things to consider. we have costs to consider. they are not -- not trivial.

there would be other more indirect costs. these include the costs for launching a new program, including the development of guidance to and training for servicers, which is critical for consistent, quick, and efficient program delivery. the indirect costs also include the opportunity costs of diverting existing resources from other enterprise loss mitigation activities, or some of the goals recently announced in fhfa's strategic plan. all these cost factors would have to be carefully considered in coming to a decision to employ principal forgiveness or not. in closing, let me try to summarize all of this into a handful of conclusions and observations -- the issue before us is not about whether fannie mae and freddie mac provide support to families having trouble making their mortgage payment. clearly they already do, and it remains fhfa's and the enterprises' collective objective to do so. as fhfa makes its decision on whether the enterprises should offer principal forgiveness with the hamp triple incentives, we will look to the issues i have described -- the npv impact; borrower incentive effects; and operational costs.

those are the issues that are within our responsibilities as conservator of the enterprises. whether fannie mae or freddie mac forgive principal or not, the universe of enterprise borrowers potentially eligible for a hamp pra is well less than one million households, a fraction of the estimated 11 million underwater borrowers in the country today. this is not about some huge difference-making program that will rescue the housing market. it is a debate about which tools, at the margin, better balance two goals -- maximizing assistance to several hundred thousand homeowners while minimizing further cost to all other homeowners and taxpayers. the anticipated benefit of principal forgiveness is that, by reducing foreclosures relative to other modification types, enterprise losses would be lowered and house prices would stabilize faster, thereby producing broader benefits to all market participants.

the far larger group of underwater borrowers who today have remained faithful to paying their mortgage obligations are the much greater contingent risk to housing markets and to taxpayers. encouraging their continued success could have a greater impact on the ultimate recovery of housing markets and cost to the taxpayers than the debate over which modification approach offered to troubled borrowers is preferable. a key risk in principal forgiveness targeted at delinquent borrowers is the incentive created for some portion of these current borrowers to cease paying in search of a principal forgiveness modification. in closing, the population of underwater borrowers -- current and delinquent -- remains a key risk for the enterprises, taxpayers, and the housing market.

there may still be improvements to current efforts that can mitigate this risk in a cost- effective way. fhfa remains committed to working with the administration and congress on these difficult questions, recognizing our shared objective of preventing avoidable foreclosures, minimizing taxpayer losses, and bringing a greater measure of stability to housing markets across the country. thank you for inviting me here today. [applause] >> i think these are our seats. first, let me thank you for coming and giving such a thoughtful speech. we share with you the ambition to try and inform the debate. i think we have a good panel set

up to probe into this further. you mentioned today, as you did -- as you suggest every time you give this speech, your legal responsibilities. one of those is to conserve the assets and properties of the agencies, in effect to protect the taxpayers. the key question for your new analysis, which you alluded to, is, how much do these new treasury incentive payments change the equation? in the role of your legal responsibility, do you view the cost of these -- these are payments from the taxpayer. is this viewed as a cost during your analysis? is this money coming from another source, therefore, if it is enough to fill all and make the principal reduction work it -- in some sense, that is not your problem. that is a different pilot taxpayer money. it is not part of the analysis. >> our responsibility is to

conserve the assets of the taxpayer. we are looking at what those costs would be to fannie and freddie. it cannot help us but to be aware. we are conserving assets on behalf of the american tax payer. if we engage in principle forgiveness because there is money being taken from another taxpayer pocket, we are trying to provide transparency that that is the case. while it may make fannie and freddie's losses lower, if it makes the overall cost to the taxpayer higher, we are trying to provide clarity to that point. we recognized that congress gave us the responsibility on it -- and a mandate. it gave the treasury oa differet responsibility and a mandate, as well as a funding source with tarp bonds. tarp funds have not been used or fannie and freddie modifications. the treasury department is determined for the first time this january, if we were to do

principle forgiveness modifications, it would use tarp money to fannie and freddie. we are trying to provide clarity about how this all works. our responsibility is to that of conservators. it will be about how it affects the net present body to fannie and freddie. it will also include these other considerations that touched on in my remarks. what is the operational cost. one of the borrower incentive effects. those are very hard to measure. >> do you have a sense of when the final analysis will be available? >> this issue needs to be brought to a conclusion. there is an awful lot of new information. obviously, the treasury offer is fairly new. we really have to take time to go back through the analysis. we are looking to wrap it up in the next few weeks.

>> again, on your responsibilities and how you see your role. you mentioned affordability. i think you talked about the fundamental point of the loan modification is making it affordable for the borrower to make the monthly payment. i tried to scribble quickly. you distinguish between ability to pay and willingness to pay. it is quite likely that there are underwater borrowers who might be able to afford their mortgage, if you give them forbearance or lower their rate, the could have for their mortgage, but they are so far underwater that they make the decision that they will walk away. i think i got the quote. you said "general acceptance of reasonableness, if not fairness." if principal reduction of

-- does this go into your calculus of how to do that npv analysis and how to go forward? from a bottom-line point of view for fannie and freddie, if you have a borrower who will walk unless they get a principal reduction, it is better to give them a reduction. >> you have to be careful with the incentives. the point i was trying to make about this being reasonable if not there was in the context of -- if not fair was in the context of -- the situation of fannie and freddie in determining to offer principal forgiveness and who to offer it to is different and individual mortgage servicers who may make this decision for their own business. that individual service certification can go through their book and decide on whatever factors they want whether to offer forgiveness.

there is no regularity. that servicer can do its thing in the way that it seized best. for fannie and freddie to do this, they are working through over 1000 mortgage servicers. everything that they do have to be much more transparent. we have to write guidance that get published and posted publicly. it goes out to these 1000-plus mortgage servicers. it says, ok, a borrower comes in and needs a loan modification. here is how you go about evaluating that our work. if we are offering principal forgiveness, we have to be clear and transparent about the rules that these 1000-plus or research are supposed to apply. because there is that amount of transparency in how the rules are applied, it raises a concern for us that that makes it easier

to be strategically modified. that is relative to an individual service or who does not have to provide that kind of transparency to the borrowers -- servicer who does not have to provide that kind of transparency to the borrowers. >> it might make sense to give borrowers forbearance or reduction, but it is hard to distinguish which. what you're trying to say is, setting up rules that you can identify one versus the other is difficult. he may be faced with at current year -- you may be faced with a clunkier system. >> that is part of it. it just to clarify a little bit more on principal forbearance. it takes most or all of the underwater portion of the borrower's loan principal, set

it aside, charges 0% interest. there is no repayment against that. it just sits there silently until the buyer -- are work goes into foreclosure if they fail in the modification -- it just sit there silently until the borrower goes into foreclosure if they fail in the modification. it lets its that there -- it lets it sit there. it the modification is successful, the bar were retained that obligation to pay off that forborne principal amount. that gives the taxpayer the opportunity to share in the bar were possible upside. it is no modification is successful and has allowed our work to stay in their homes -- it this loan modification is successful -- if this loan

modification is successful and has allowed the bar where to stay in their home, then the taxpayer gets to share in the upside down the road. that is why the public is that of our work is getting the same monthly payment either way -- the point is that the borrower is getting the same monthly payment either way. how do we get the taxpayer to share in the success of the borrower? >> that brings up another question. is there a way to do s share appreciation model -- to do a share appreciation model? >> the question is being talked about. principal forbearance is a form of shared appreciation. it is a less complicated form of it. we do not have to do a new loan instrument. the operational tracking is much simpler. it is, in fact, a form of shared

appreciation. we set aside the forborne amount. down the road, if there is a recovery, the investor, in this case fannie and freddie, gets all the upside up to the forborne amount and the homeowner gets the rest. and that it is a useful exercise -- >> it is a useful exercise on how much this could affect the broader number of borrowers and the broader housing market. there is a range for the incentive payments. i think the incentive payments are lower for people who have been without payment or in the foreclosure process for a longer time, over six months, i think since the last payment. i think that is acknowledge in

that, if somebody has not paid their mortgage in over six months, even with the reduction, they might not be recovering and staying in their house. the latest numbers -- there are something like 11% who have been less than six months since our last payment. is this something that is going to have to figure into your analysis. you gave a number of less than 1 million. that also addresses this issue that a lot of new peak -- a lot of people might be too far into this that even principal reduction might not be helpful to them. >> first of all, in the preliminary findings that we reported, the assumed treasury and the payments to fannie and freddie were scaled according to the rules of the program. the amount of incentive payment did very on the loan -- vary on

the loan. what sort of universe are we talking about? there is a common testament that there are 11 million underwater homeowners in this country. estimating this is pretty difficult. it involves using the house price indices. there are all sorts of measurement issues. taking all of that as it is, for fannie and freddie, if we use a code level data, fannie and freddie have about 2.5 to 2.6 million loans that are what we call deeply under water. the current loan to value ratio on these mortgages is above 115%. 2.5 million, 2.6 million. of that, approximately 2 million are still paying their mortgage. the group that is delinquent, whether it is 60 days delinquent or they have not made a payment

in four years, it is on the order of 500,000 borrowers to 600,000 borrowers. that are the -- those are the people we are trying to reach right now with the various laws- navigation tools that talked about. it is -- the various loss- mitigation tools that i talked about. these can give people a better opportunity to continue to pay their mortgage. >> we will take questions. we have time for a few questions. i think there is a microphone. please introduce yourself. we are limited on time. >> i will not stand up because of the camera. 2/3 of fannie mae's loans in nevada are under water. at of them have loaned the value of 125%. hmap mods are -- hamp mods are

temporary. payments begin to rise again after five years. in places where amortization and depreciation may not bring these borrowers back to positive equity in five years, do you think the current modifications in these parts of the country are sustainable? >> that is a fair question. i think they are. when questioned about what happens in five years -- as the interest rate gets lowered beyond 2%, it rises. the principal forbearance does not change at the five-year mark. there is a resetting of the interest rate. the program can lower the rate to 2%. after 5 years, it will rise 1 point a year until it is at the

time -- rate it was at at the time of the loan mod. there will be a gradual increase from 2% to 4% or 4.5%. the other thing i will observe about the question is that -- when we talk about these underwater borrowers, these are not randomly or uniformly distributed around the country. they are concentrated in certain markets that were -- that experienced a big housing bubble and a big burst in the bubble. most of this is concentrated in a handful of states. >> i have an analytical

question. to what extent did you subject your calculations to the real estate equivalent of the banks' stress tests? that is to say, to what extent did you build into your analysis the possibility that real-estate markets might perform significantly better or worse than the best guess? and, if so, what was the sensitivity of the calculations to such variations? and a related question to that -- you stressed the fact that the interventions you are discussing are relatively marginal in the larger sweep of delinquencies. but the impact of even marginal shifts in behavior of homeowners on the course of the housing market coudl have feed

-- could have feedback effects on the calculations you are making. i am asking you for the error properties of your model. >> fair enough. the model assumes home prices stay flat. there are no appreciation or depreciation involved. we do other analyses that do that. in terms of assessing the individual borrower for a loan modification, that is not part of what we do. the incentive effect is part of what we are wrestling with today. that work is not complete. on the one hand, if principal forgiveness achieves its stated

objective of accelerating the stabilization of house prices and the feeling that borrowers are going to continue to stay and we will not seymour foreclosures, that is a positive feedback effect. if principal forgiveness offered to borrowers who are deeply underwater stop paying their mortgage, it creates a sense across the country among the borrowers paying their mortgage that, what am i doing this for? i am at 140, 180 ltv. i am doing this because i have an obligation. but the government is encouraging activity the other way or providing certain people with an opportunity to get this principle -- principal writedown, it is a negative feedback effect. the more we see that kind of behavior, the more it could build on itself.

it is interesting the various participants in this debate tend to take one side or the other. but both are plausible. to your point, the feedback effect in terms of how it may affect borrower behavior is very -- >> what about an increase in prices or a decrease? >> i feel like this is a dissertation defense. i do not believe i can report on that. >> in the back. >> i am with national public radio. could you talk more about the shared appreciation approach?

you describe what that was more complicated. $50,000 get pushed back, -- gets pushed back, no interest paid, prices recover. the homeowner would get $25,000 of the upside, fannie and freddie would get $25,000. it is different from strategic the fall -- strategic default. it is instead to stay with the payments -- it is incentive to stay with the payments. is not actively being considered -- is that actively being considered? >> in a principal forgiveness modification and then a separate agreement, there is a new instrument that does not exist. we would have to figure out the basis for the shared appreciation. operationally, this would be

harder to track overtime. the ability to take this loan and -- it would probably have to be on the balance sheet of fannie and freddie, which we are trying to schwshrink. it would all have to be worked out. the operational systems, the financial accounting systems that are in place already allow for principle -- principal forbearance. we can do that easily. we know how to track that. it is one way of doing shared appreciation. we are, in the fact, doing shared appreciation mortgages using the technology and tools -- in the fact, doing shared appreciation mortgages using the technology and tools that already exist. >> does that mean you're not considering the more complicated one?

or are you descent it is more complicated -- you just saying it is more complicated? >> i will leave it there. >> let's take one more. >> to what extent do you think the mortgage is no longer backed by collateral? what does that imply about the future return of the private sector? >> let me say this about the underwater borrowers. i talked about how many are fannie and freddie. there are a lot better in private-level -- lot that are in private-level services. what does not yet reported enough is that most americans that are underwater realize -- what does not get reported is that most americans that are underwater realize they signed a contract and they are obligated. they are paying their mortgages.

the important point is that folks who are under water on their mortgage realize that they have an obligation to make their mortgage payments. they continue to do so. they should be encouraged to continue to do so. in terms of bringing private capital back into the market, private capital is going to want to look for a number of things to be fixed relative to the way the market operated over the past decade. a strategic plan for conservatorship that was sent to congress is one measure of the steps that we at fhfa are seeking to take to fix those problems with the mortgage market. we think they are part of what needs to be done in order to attract private capital back into the mortgage market. clearly, private investors are going to look for -- are going to take a whole lot harder look at mortgage credit risks as they reenter the market space. >> i want to thank you again.

we have a panel following this. you are always welcome to stay. >> thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> i am happy to introduce this panel of experts that will dig a little bit deeper. there are longer bios outside

for them. i will give a short bio from left to right. mark fleming is the chief economist for corelogic. , xt to him is paul nikodem the executive director and head of mortgage credit research at nomura securities international. and my right is -- on my right is andrew jakabovics, senior director for policy development and research at the enterprise community partners. he worked at hud and was the director for housing and economics at a center of american progress. on my right is tony sanders, a distinguished professor of real estate finance at george mason university. i have asked them to give brief

intros. mark talk about the state of the housing market and the options available. take it away. >> first, i probably need to apologize. i and my colleagues are the source of the problem that is encircling us. the issue of the concept of principal forgiveness and forbearance focuses on that $700 billion number and what we need to do about it. ed very eloquently describes a lot of these issues. it is not really a problem of $700 billion. folks who are delinquent -- 750,000 of the 11 million. it is significantly less, not

700 billion, but maybe a couple hundred billion dollars of those who are delinquent. the vast majority of these individuals do continue to pay their mortgages. also, this concept of ability and willingness to pay. we have built models and looked at this analysis carefully to try to understand the willingness component. that is key. how do we innocent individuals to continue to pay on their mortgages -- how do we incent individuals to continue to pay on their mortgages? negative equity is not going away in las vegas in 10 years. when we study the cards at a couple of years ago, we look at it and said, if you assume house price forecasts -- let me be the first to say what house prices are going to do over the next five years to 10 years. we are putting that question -- punting that question. punting that question.