executive joins us to discuss her story for harvard business review on the u.s. banking industry. calls,oday's news, phone e-mails in tweets from "washington journal." ♪ host: two of the higher profile political races this year, orrin hatch has won his primary in utah setting off a tea party challenge. charlie is still standing after a primary fight. as the campaign continues, here is the question for you this morning. would you vote to reelect your member of congress? how is she or he doing? will you continue to support

that person this coming year? here are the numbers. the number to call for our republican line is 202-737-0002. the number to call for our democrat line is 202-737-0001. the number to call for our independent line is 202-628- 0205. a couple of other ways to get into the program. twitter. facebook.com/cspan. also, e-mail journal@c-span.org. here is the front page. "hatch seals with a kiss." there were at salt lake yesterday. he defeated his opponents, mr. liljenquist.

it says that mr. hatcher won the primary in what he says will be his final term in office. he will face the you top this s. host: here is the front page in the new york times today. a shot of charlie. he defeated at for challengers, surviving one of the toughest challenges of his career.

i'm just glad that my committee has faith in me, he told reporters. host: before we get to calls, -- we will take a call first. john, you are first. good morning. caller: good morning.

host: who is your member of congress and would you elect to reelect him? caller: where i live we have been gerrymandered into a whole different configuration. maryland is a pretty liberal, one-party state. no, i would not reelect him. host: charles, are you there? caller: yes, i am. i am temporarily away from alabama. my congressman is back in virginia. i say, no. i am disappointed with the overall performance of congress as an institution. i am also disciplined with the performance of my congressman. i say, no. i hope, i pray there will be some major turnover. generally speaking, people are

disappointed with congress, but not their own congressman. that is why they complain about carter's and in combat with a 95% reelection rate. host: we see the stories for years. what if your -- what is your congress person not bring to the table? caller: like a lot of americans, i am disappointed with the gridlock. there has to be some compromise, some by partisanship. gridlock is not government. people are upset and furious that congress cannot get together. i would love to see a return to some civility and a new spirit of compromise. if congress could put aside partisanship and put together cooperation.

host: thank you for your call. we will get some other viewpoints in. we're asking if they will vote to reelect members of congress. here is the story in the .ational journal pyridin

host: lancaster, pennsylvania. an independent spirit your up this morning. caller: i would never vote for him. he has been our congressman for the last 18 years. host: what is the problem? caller: he votes 100% like he is a robot. anything the tea party or far right wants to do. he negates anything that might help the general public. the minority constituency.

he really does not care. it's like a lot congress people. host: is there a strong alternative there? caller: we have had a few people, but the registration is like 35% -- 65%. it is kind of hopeless. -- like australia and make a voting mandatory. if you go, your finding. -- you are fined. we get a small turnout at such a small knot of people are electing these people that go into congress and in the year lobbying jobs. the previous representative was bob walker. susan washington for 20 years. now he makes $1 million a year,

as a lobbyist. he was newt gingrich's campaign manager. it is not a good situation. >host: thank you for calling. a democrat is on the line now. good morning. would you vote to elect a member of congress? caller: yes. while working for his campaign. i have been since 2006. he serves our city very well. we love him here. host: what does he bring to the table, do you think? caller: his experience. alexis said, he is very hard working. even before he was elected, here is a valued member of our city.

he served our city well in business. he is very articulate. and he fights against my senator, mitch mcconnell. host: what the make of congress overall? we and make much about congres'' approval rating being of low. caller: i'll say this. my center is mitch mcconnell. he is the chief obstruction and the reason that congress's approval rating is very low. it is because of him. he puts up barriers to everything. he has the highest number of historic filibusters in the senate. he is the worst and the main

source of all this obstruction. host: how would you vote and would you vote to reelect a member of congress. one message from twitter comes from oregon. back to the national journal. there are some other races out there. this is navy reserve pilot who came at the incumbent from the right. we also have this piece about the republican nomination for a new york's seat. there is also this. the republican in colorado has

won a fifth primary despite a challenge. all from "the national journal" this morning. good morning to you, scott. guest: good morning. host: take us to the biggest races, mr. hatch and mr. fel rangel. guest: he did everything that the opponent failed to do. he engaged with the electorate. he cut off fundraising for his opponent. he engaged with the grassroots and got his own supporters into the gop convention in utah. he basically just cut his challenger off at the knees.

here is a very charismatic former state senator who ran a paul ryan-style platform. but no one knew who he was. hatch ended up making the most of his incumbency instead of suffering for it. host: so many of these stories talk about the t party challenged -- tea party challenge. guest: the way to defeat it is to recognize the danger early. this is something that's richard lugar failed to do in indiana. orrin hatch recognized pretty much as soon as his former colleague lost a primary in 2010 that he was going to have similar trouble. host: how about charlie rangel

in new york? several challengers and a somewhat redrawn district. take us to new york. guest: 80 and ethics problems are some that have gone the way of convicts -- gotten in the way of incumbents. he was running a newly hispanic district. he was hoping to harness that community toward an eventual victory. in the end, he only had three or so months to figure things out. charlie rangel had a 40 years of name recognition to work with. that and of making the difference. host: are there other races that stood out? guest: john sullivan losing in

oklahoma was a surprise. he told the associated press a few days ago. he is an example of someone who did not engage early enough in the race. host: were there any other common issues that led to the results? guest: it seems to be very localized. in oklahoma, you have local issues driving things. in new york, you have the redistricting aspect. in utah, you have orrin hatch's incumbency. host: move the story forward, if you can. were you looking forward to in the coming weeks or months? guest: the new york primary, especially in upstate, democrats got the challenger the wanted. but after some disappointing

results, i think the democratic national campaign committee will be very happy with the results last night in new york. it probably gave them their best chance going forward to maximize in a state that will be critical for the battle of the house. it varies from state-to-state. turnout was very low. even the charlie rangel one, he got significantly fewer votes. -- won, he got significantly fewer votes. in utah, perhaps because of met ronnie, it was higher than people were expecting. host: the status of the parties and how they're doing? guest: again.

it is less about the parties and more about incumbents. on one hand, you have a democrat and charlie rangel who can vastly outspent his challengers in his district for his house primary. on the other hand, you have republican orrin hatch in utah, again, cutting off fund-raising to his opponents and having a massive money lead. this is a situation where the washington connection is the real money story here. host: he is the editor of the national journal race hotline. thank you. we're asking you if you would vote to reelect a member of congress. it democrat standing by. it thank you for waiting. caller: just jumping off the top of the category, no. it is bewildering on how we hate

congress but we keep reelecting our local representatives. it is bewildering. what he said. the charges that charlie rangel has in congress, his health, just in general, increasing influence that his full block of the congress, that liberal wing, barney frank. most of them are leaving or quitting. and here he comes in last night and is able to pull off this facade of being a champion of progress. not just looking at the deterioration of the district over his tenure, but the deterioration and seeing how he has been there for 40 years as that putting the map together

that maybe he is the problem. still, he gets reelected and reelected. peoples of this voskhod of being the champion of the people. joining with obama who might be out himself. it is bewildering. i am talking as a democrat. in a guy who loves obama. -- i am a guy who loves obama. we have to keep reelecting these people who are winning for us. you see their power deteriorating. host: thank you for calling from the home of charlie rangel. in south carolina, i don't know much about duncan. cincinnati, jerry, independent.

good morning to you. caller: thank you for taking my call. i would not elect federal on the republican side. we have a republican governor here in this state. he is tearing this state completely apart. he is doing flat next to nothing. host: is there an alternative for you? caller: not at this time, no, sir. i am 75 years old. once the republicans when the house, the senate, the presidency -- man. the middle class and the poor, we can forget it. they're going to take their money and buy it their way.

we will not have any say so whatsoever. host: ok. moving on. caller: the problem with the house and congress is they're always running for office. once they are in, the shares represent all of the people and said according to state and vote according to the wishes of the people of the state. they're not supposed to represent the republicans or the democrats, but the people of the individual states that sent them there. that is the problem. host: we are asking folks if there reelect their members of congress. of course, there waiting for the big announcement from the supreme court on its ruling. in the hill today, a lot of

stories. congress close to deal on loans and highways. bids \ [applause] host: in a blow to the coal

industry and other regulators. host: ohio, an independent. good morning. caller: i agree with everyone else, so far, on the 11% approval of congress. the 90%+ of reelection. basically, 25% of those eligible to vote are picking our leaders. in the last 20 years, both parties have had control of all

three branches. one of the big problems is that party leaders are elected dictators. if you want to be reelected you either follow the party line or they cut out all of your money. a redistricting is another problem. we had a district here in ohio and it runs from lake erie all the way to the east coast of ohio and of the mississippi river -- the ohio river. there is no way one person could cover that much territory. most people do not know who the rep is or how they vote. one thing that would cure all this is a c-span was available to everybody. because on c-span, the what would these people are saying. is not have all these talking heads on 24 hour news telling me

what they just did. and another thing, i think, is to talk about term limits. you have them every two years, except on the supreme court. to me, the should be an age limit for congress. president and vice president. there ought to be a term limit on all judges. host: all right. ohio. lots of thoughts there with mike. please contact your table. a couple of comments from facebook.

go to dallas, texas. mary, a democrat, good morning. caller: would i vote for my congressman again? we need some new blood of been there. it is like the guy said. there needs to be an age limit. host: who is the new blood? caller: there are people but they will not let them in. we need some new people up there. there should be an age limit. host: carroll, a republican in colorado springs.

caller: my representative is a tea party man all the way. he just recently dealt won his primary, mainly because we're having fires here and very few people got out to vote. i am a fiscal conservative republican. i'm a moderate, but i'm not a tea party person. the varied little time because yes this oil and gas special interests behind him. no. it is very frustrating. he is as following the two-party line. host: which is talk to him on camera, but here is what he wrote .

host: in addition, on the hill, for those folks running for reelection, there is also the boat in the house regarding eric vote in the housevoke regarding eric holder.

host: look for this vote live on the floor of the house tomorrow on c-span. we remind you that charles rangel, who we have been talking about, will be our guest tomorrow. charlotte, north carolina, michael, good morning. caller: what is going on and good morning, america. i think more than anything, we should be aware of this sect of

the tea party and these republicans. all of this not wanting to cooperate. this is the greatest country ever, but we're looking at something now. republicans realize with the tea party, sara palin, all these people are doing it to stop this country from being the greatest country ever. so, why is up. vote democrat. get these republicans out of here. host: let's move on to new york. it is john on the independent aline. caller: in here. good morning, c-span. .y representative is gibson di

i have a problem with these people saying to vote democrat, vote republican. we clearly need term limits. these guys are like 70 years old. they're up there. they are shaking. they're still giving speeches. and only like 25% of the people -- people do not vote. they do not know what is going on. they pretty much just argue between democrats and republicans. they both pretty much do the same thing. once they get in there, they try to hold power for 30 or 40 years. this is the way was designed. we have to have term limits. the voters never vote them out. they hold on to the power. they built it up and corrupted. there are just there forever. their interests really are not the voters of best interests.

they're not voting for their interests. it doesn't matter which party. they really are not helping you. we have to take the responsibility out of the people's hands and a limit these terms. we cannot have these people in here for a generation or two. it is just not right. host: richmond, virginia. a democrat. caller: first of all, i love all these calls. i'm a first-time caller. in the chief officer in richmond. we need to vote them all out. they all need to get out. we need to get fresh blood. i think any one of us could do better than they have done. when i worked in washington, d.c., for example, i realized something. all of these people -- republicans, democrats,

independents -- they all know each other. they are all friends. when i look back at eric cantor, all of them need to go home. and just to go home. what is happening here right now, we have a real free fall in the government. they are not helping us at all. since when is my job to bail out a bank? since when is it my job to bail out the auto industry? host: thank you for calling. we do get to the point. there is a new poll out in "the wallstreet journal."

host: maryland, thank you for

waiting. caller: we had chris von holland. we have one party out here. latinos have just got another amnesty, which, by the way, ronald reagan gave back in 1986. what is obama going to do for black people? it is mind washing to me. i ask, why can't we get some training for our men and young people? back in the day, vocational schools. if he has done nothing for black people, but they are going to vote for him, just like a boat one party in maryland. it is starting to fall apart out here. of black people over the world not realizing that everything they have never gotten a republican has given to them. i just do not get it.

in a tea party person. the key talking about getting new blood, but guess what. that is what we did in 2010. we're going to do it again. it will not stand. you can't take money from other people. i worked very hard my whole life to get what i have. i can assure you, i've not had any welfare. my mother did not raise as that way. i want black people to realize that you can't demonize the people who gave you the jobs which happens to be white republicans. a common on twitter. -- a comment on twitter.

the pentagon does an about- faced. the marine captain was relieved of his command, stood in a auditorium and openly discussed his sexuality. i happen to be gay, but more importantly, in a marine. for the first time in history, the pentagon a celebrated lesbian, gay, bisexual, and transgendered month. you can watch the event at our website, c-span.org. our next call is from montana. republican. would you realize you're a member of congress? caller: no, i would not.

is the one who wrote the health care bill or helped write it. host: what are your issues these days? caller: i have a business. it is not doing too well. we just do not have it. most of the businesses out here are connected to new homes. is very disappointing. the epa is trying to shut down our herb kohl process out here. -- our coal process out here.

coal, i do not see it looking to do too much. the epa will shut them down. host: thank you for your calls. host: more political news. this is from "the new york times." in case you have got heard this story, another democrat will skip the national convention this summer. one would think that a nominating convention would be a command performance .

she is fighting for reelection in a state that polls show is leading towards mitt romney. there are all seeking tea party support. she is skipping the democratic national convention. jackie, a democrat, good morning. caller: good morning. my representative has been in office for nine terms. he goes across party lines to work with the democrats on several occasions. he is doing what we sent him down there for. until the last to terms. he is gone the way of the tea party. he has gone lockstep with the gop, against anything that would

help the working men and women in ohio. it is a shame. he has it locked up. the county is pretty much all republican. why would he continue to vote against change that would help the people that need the assistance, need the jobs? it is a shame that the tea party and money has so corrupted our system. t -- thank you. host: a couple of other pieces before rao times. -- out of time. .

host: that is an "the washington times." the lead story. host: a couple of stories regarding syria there. a couple more of your cards. joseph, -- a couple of your calls. joseph, good morning. caller: the rep for this district is voluntarily not running again and he has only served three terms. yes and a good job. he has been fairly balanced.

the other thing i would like you to take a look at would be in harrisburg. that is on a subject we're trying to have people discussed in the international news. that would be the admission yesterday by the senate leader for the republican party here in pennsylvania, admitting in plain english that the voter i.d. law was designed specifically to try to ensure that romney would win this state. i think that is significant political news. it is something that ought to be covered on a network like c-span instead of ranging all over the world with these other pieces of news that can be gotten. host: thank you for the heads up. we will look into it. cathy, a democrat.

your chance to talk now. hello. go right ahead. caller: i just wanted to say that people should try to support an independent. i did not vote for the republican representatives that were voted been lately. i would like to see -- run again. i think he was a great man. i also feel like an independent party could solve the gridlock in the federal government. host: thank you for calling. and, you are up. caller: i would not vote for my congressman. he's a republican.

i do not pay attention because i'm a democrat. it is very important. it feels like people think that when you become president you become king. that is not true. congress is very instrumental in what happens with the president. the obstruction. the way things have been going. i want to make sure that people in my town pay attention to congress and the senate just as much as they do the president's. if we can put the president back in and back him up with people that will vote yes and back him up as we should, the leader does need people to leave in order to become successful. host: certainly no shortage of health care stories today. politico has no grisette --

regrets over their health care vote. you can read it at political.com. this story that the gop is in no rush. and republicans still have only one thing in mind when it comes to president obama's health care law. full repeal. house republicans will not rush. they go on that there will not pass legislation to cover people with pre-existing conditions. -they're not in a rush, they are saying.

a republican, good morning. caller: where do you go to do anything that you do not have identification? i do not understand these people. you cannot let people invade your country and vote for who they want. i do not understand it. besides that, i don't think people of notice. since obama got in there, he has taken got out of everything. this country will fall because of that. the children cannot even salute the flag. they cannot sing a song with god in it. they want to take the cross down. ig understand people. rather than many atheists in this country?

" god bless america. host: tim is a democrat. caller: i would vote to allow some of my democratic colleagues back in. it is because of lobbyist correct -- corrupt money. i really think that we should be concentrating on changing the supreme court justice. when they allow all this money to come from outside places, that is our system. the boat doesn't really count that much. all of these people are complaining about these different things that are going on. it will not change a lot. the problem is the money and republicans. host: that was our last call for

this segment. we're appreciative everybody who called then. we will talk with a couple members of congress in this next hour and a half. or so -- hour and a half period or so. and later, republican mike pompeo. we will look ahead to the supreme court decision on health care. we will be right back.

the >> this is the conversation we to have that nobody is willing to have. what role should the government play and housing finance? >> and the pulitzer prize- winning columnist details the subprime lending collapse and the continuing issue of government subsidize home ownership. >> if you want to subsidize housing in this country, and you want to talk about and the populace agrees, then put it on the balance sheet and make it clear and evident. make everybody aware of how much it is costing. but when you deliver us through these third party enterprises, fannie mae and freddie mac, and you delivered subsidy with private shareholders and executives, that is not a very good way of subsidizing home ownership.

i think we have seen the end of that movie in 2008. >> more at sunday -- on sunday at 8:00. july as seventh and eighth -- on the campus of lincoln university. >> this is probably our most famous book. this is the one we like to show the visitors in the coming. this is a book about harriet tubman. it is called here it, the moses of for people. this book was written in 1866. the second thing is that harriet tubman made her mark and it is the most famous autographs if

you want to call it to that. obviously, she could not read or write. so she left her mark as the sign of the cross. quartz watch it in at jefferson city, missouri. -- >> watch it at jefferson city, missouri. host: it is one of those aboard districts, raul grijalva. thank you for being here. what was your take on the court's action? guest: i thought it was a mixed decision for me. essentially, what the court did in striking down the three

sections, the clear message is that this is a federal aggressive responsibility. that is where they belong to nine. i think it is a very powerful issue. the role was on the table. there's one session open to be defined later. i thought it was an important and pressing issue. reasonable suspicion. the kind of discretion given to local police authorities to do that. i think that will happen soon. but around civil-rights and the 14th amendment. host: here is what arizona governor denver had to say about the ruling.

-- jan brewer had to say about the ruling. [video clip] >> i have faith in our law enforcement. our brave women and men in uniform who have been trained efficiently, effectively, and in harmony with the constitution. civil rights will be protected. racial profiling will not be tolerated. senate a bill to 1070 is equally committed to holding up the rule of law while insuring that the constitutional rights of all and arizona are protected, including prohibiting law enforcement officers in solely considering race, color, or national origin in implementing its provision. in fact, under my direction, senate bill 1070 was amended to strengthen and emphasize the

importance that civil rights are protected. host: a reminder of what the supreme court said. it updated the immigration status check. three provisions struck down into the requirement to carry registration papers, criminal defense -- a criminal offense for illegal immigrants holding jobs. what are you hearing from your constituents about all this? guest: in hearing, particularly in the latino community, apprehension. a level of anger. a faction that was left in. affection to be. there continues to be apprehension. more importantly, how quickly the challenge happened to this particular one. what we heard, those challenges are forthcoming.

i anticipate the supreme court will have to revisit that session soon. host: the president's recent executive action on immigration. would give us your thoughts on it. guest: basically for a two-year period, holding for status under the age of 34 young men and women who have graduated. continuing their college education. you cannot have had a felony or a criminal record. the relief that he gave 800,000+ students in this country was tremendous. it was very uplifting for them. after being here with no choice of their own, they find themselves facing deportation and the possibility that

everything worked for is now over. this was a symbolic but very important executive order on the part of the president. host: valerie, an independent. thank you for waiting. caller: i have it, and a question involving civil liberties. .'m happy for your support my question about the immigration and the papers is that it seems to me, in this country, the last thing we ought to be doing is asking people to show papers to law enforcement agents. it sounds like pre-world war ii to. in europe when you do not show the right papers, you get put in

jail, or in this case, deported. guest: thank you for the common. the sheriff in arizona and the police chief raising questions about the protocol. the fact that it diverts from the community trust that you need to build a new community. people are very concerned about racial profiling. very concerned about violations of the 14th amendment and have raised those concerns. the governor spoke about going to training. many communities feel that is not enough. there is still an open wide

ability to their office. a hesitation on the part of people to come forward and report and declare a crisis. i think that is why it continues to linger. and 46 the generation mexican- american sturm arizona, -- and for 6th generation mexican americans from arizona, they're not at risk. and now suddenly, because of what i look like, the color of my skin, i will be potentially asked to produce documentation that i am a valid citizen. i do not think people appreciate that under current and what that means to that committee. host: question on twitter.

guest: i think some of those comments were a little delusional. even when it was first filed. three years of litigation, our economy has bee hurt, the social fiber of our state has been ripped. then to say we declare victory when the supreme court on the three points i mentioned earlier cut away at the state pre- emption that they can set emigration laws. -- immigration laws. this area, even the court so narrowly defined it that you are going to have a challenge and challenges are on their way. host: congressman raul grijalva.

a democrat, good morning. caller: we talked a lot about the legal immigration. a lot of time it is emphasized about the hispanic population. they are just part of the illegal immigration issue. there are a lot of european illegal immigrants that i think a lot of people forget about. it is racism when you single out immigration and immigration laws. there is this big push when you are only talking about mexico, arizona, and texas. i think you are really talking about hispanic immigration versus illegal immigration.

guest: maybe 50% of people that are classified undocumented in this country are mexican. asian, shall european, irish -- central european, irish, and the list goes on. when we talk about the issue of immigration reform, the more -- we have made this issue so myopic, an issue that affects 12 million americans in this country. when you cobble together a solution for this, it is a cross-section of america. host: where is congress on this issue? guest: i thought the decision

and the admonishment by the court that congress should do their job for the american people -- i thought that was very important. for a long time, throwing this issue to the states saying the federal government will not do anything. some of the most strident anti- reform colleagues of mine in the house where the most strident about saying this is a state's rights issue. is back to where it belongs been betting -- it is back to where it belongs. i hope what the court is doing in this recent decision that it will tell congress that this is a responsibility. what worries me more than anything else is this issue continues to perpetuate without

congress dealing with it. the divisions that we see on a societal level of this country is not going to be healthy for our future. we need to integrate that and get a plan for it. i hope my colleagues can exploit this issue and take it seriously. there is a bipartisan solution there. we ought to realize this is a critical issue that we have to solve. host: frank is on align. welcome to the program. caller: thank you for taking my call. how do you stop this from happening? someone breaks the law, and we go all out to protect them. . do not understand been bi bann

it is unfortunate that many of them are hispanic. i think something should be done. however, when do we start obeying the law? the border should be closed. 40,000 mexicans were killed through the cartel's. how do we know terrorists are not coming through the border? they come across the border, kill people, and i do not hear that from our congress. if someone comes in my house, right away a policeman comes. i think we have to stop splitting hairs. we have to say when you get in there, you are just like i. that is why i am an independent.

i do not vote and bring someone tells me i have to vote for this . because somebody tells me out there who i have to vote for. lost ahe has just lawsuit on political intimidation, a $1 million settlement against him. the justice department is pending soon additional charges. let's not look that as a panacea of law enforcement. let's look at it as a reality. the sheriff and others have used this issue to try to create a

political support as opposed to trying to deal with the problem. i would also say that the only way we are going to talk about real security in this nation is to deal with the issue of immigration in a comprehensive way. i do not deny that as a nation we have every right to protect our borders. but we have to accept the reality that there are people here. we need to pass legalization. what i also thinks has security benefits. host: i wanted to ask your thoughts on what the president to candidates are doing for the hispanic vote. let me set it up by showing mitt romney talking about the president and immigration. [video clip] >> he said it

wo h >> the president said he would make it work. he did not do that. why is it? he had a democrat house, a democrat senate, and all of the support he needed. he did nothing. the supreme court had to step in because states had to step in trying to find a way to solve the problem. now the supreme court has looked at it. what we know is the president failed to lead. host: congressman? guest: you know, mitt romney also said during the primaries, took a very harsh position of what would happen with the immigratioimmigration.

he said he would veto the dream act if it came to his desk. now you see him saying the president did not do enough. the frustration that we have with this issue that we believe has to be resolved. it is palatable in the latino community. the latino community has to realize who is a friend and who is not. the efforts on the part of the obama administration whether from an executive order or being hard on security issues and the push for immigration reform have been pretty consistent. the issue now as we approached this election -- what is your plan, mr. romney? there is no plan. if we are going to criticize the

president for an effort of trying to get this issue resolved, co ahead and do that. the blockages that have happened in congress have come from these party members consistently. we passed the dream act in the house. we needed 60 in the senate. we got to 55. almost every single republican voted against it. it is good to point fingers but it is also good to do self- examination on the part of mitt romney and realize you have offered nothing but the same kind of divisive political rhetoric. now you want to shift the blame to the president when it is been your party that has been the barrier from the get go. host: republican on the line from the philadelphia.

caller: good morning. which law permits babies born of foreign parents to automatically become citizens? i believe that was put in for the african slaves to automatically become citizens. the only way we are going to stop this is to change the law. thank you. guest: it is not a law. it is the constitution. it is embedded in the amendments. the court in the past has been very clear about that amendment, the 14th, and protecting the birthright of an individual. it is not about changing the law. it is about fundamentally trying to undo a portion of the constitution that is an extension of protection to all americans.

it is the whole issue that we continue to make, and this question is a reflection of that, it is not always a racial issue. unfortunately the issue of immigration has been tied to the shift in this country. as long as we approach the issue of relations among people in this country as something is a threat or not going to work for us, something has to be eliminated, i think the friction that we see around immigration is unfortunately the example that we have right now. dealing with immigration reform is so critical for all of the other building blocks that we need in our society. host: it is a very busy week here in washington. there is a senate agreement on the student loan issue.

the question is whether house republicans will come along. what is the bill trying to do? guest: it is trying to keep the interest rates from skyrocketing on all the student's. the clock is ticking this month. something must be done. it is not a perfect agreement but it provides immediate relief and it extends that benefit of a fixed interest rate. i hope my republican colleagues understand that our nation is not going to really walk away strongly from this recession as we should unless we have invested significantly and make sure we have an educated populace and educated young people that can contribute. one of the waste now is a student loan. -- one of the ways now is a

student loan. it is horrible for the families and their students. host: what are you anticipating? guest: being somewhat of a masochist and an optimist at the same time, i am hoping for the best. i am hoping the court realizes this is in the prerogative of congress. many of the lawsuits that were brought were brought under the cover of money to create a situation where now we are having to wait for a supreme court decision. if the individual mandate is taken out, we have to decide what the survivability of this law is going to be overall. if the law were to be struck down, if congress were to sit down and decide that medicare -- maybe we just begin to lower the

age of eligibility for medicare, opened it up to more americans and extend the issue of coverage. the issue of coverage and cost is the center of this reform. we should look at medicare. let's say the court strikes it down. repeal and restart. that has been the mantra from the republican leadership in the house. ok. what is your plan? issues like tort reform, individualized personal care are not going to suffice when we still have 40 million americans who are looking for health coverage. twitter you going to do with pre-existing conditions -- what are you going to do with pre- existing conditions? what are you going to do about prevention?

what are you going to do with the millions who now have coverage that did not before? those questions remain. i think the issue of transparency was very important. if you are going to raise premiums, tell us why. host: as you say all that, congressman, there is this story. the gop has no rush to legislate. guest: it is an underestimation of the urgency and more importantly i do not think the gop in the house or in the senate should be taking a victory lap if the court were to strike down the significant part of health care. if it is shortsighted. the benefactors they are trying -- it is shortsighted. the benefactors day are trying

to take care of might not be worrying about it. it is not a good strategy. host: joe, a democrat, thank you for calling. caller: how can you stand behind a regime that sends down guns to kill the mexican people? how can you explain that and get your people to vote for this regime? across the river, they send guns to kill them. i hope you can explain that, sir. guest: it is a little more complex than the accusations of the caller. 85%, 86% of the guns that have been confiscated in mexico have come from the united states of

america. they have not come through some sinister operation from the government. it has come from gun shows and manufacturers in this country. it has come from unregulated gun shows in this country. theink that is thpart of focus of the border. i think the focus of homeland security and other federal agencies has to be on this organized syndicate of cartels that are demonstrating violence in mexico and creating the kinds of tensions on the border that are not necessary. that is the target. that is where our focus and energy should be. the other thing we should do as a congress decides regulating some of these gun shows so

people cannot buy 100 of these semi-automatic weapons and drive away, the other thing we should do is put harsh, harsh penalties, deny access to federal assistance for financial institutions, financial services, banks that are having anything to do with laundering and carrying the money in this country of those cartels. i think those are the kinds of tough signals that we have to send. it is sad and heartbreaking to watch our neighbor to the south in the last six years, 50,000 people have been killed from cartels. we have a role in assisting mexican authorities in boston up those some tickets in such a way that we begin to cripple their

ability to run people into this country, dope into this country, and be able to generate the kind of revenue. florida, an independent. caller: good morning. thank you for your time. a quick comment and then a quick question. this is 2012. not 1912. every citizen has the ability to obtain an i.d. you pull over a car full of hispanics or anyone for that and no one has an i.d., there is suspicion.

say you rent out a room from your house, and people come to your door that would like to rent a room. you tell them i have a line, a process, so i will get back to you after i checked you out. you go back to your living room and you find a man and his family have snuck through an open window. tell me what do you do. do you let them stay just because they got in? guest: the reason for suspicion -- i was curious about the example. a carload of hispanics that do not speak english, they are suspicious. that is the whole .

of the complaint. -cannot be the criteria -- that is the whole point of the complaint. there should not be suspicion. the protection of people's basic civil rights. part of what we need to do is bring these people out of the shadows so we know they contribute and pay restitution and they have a job and are working and are paying taxes and are contributing to society. that is a process. until we have a process that allows people the security to come out of the shadows, the open ended question about a family coming through a window and sitting in my living room continues to be baited. i also see this country -- there

is my house and the neighborhood. i see america as a neighborhood. at my house, we might eat different foods and speak one or two languages. we are still neighbors. we all have the same concern about making our neighborhood better, secure, making sure our kids have a good school. there is a lot of common ground. i think if we look at america as our neighborhood -- yes, we still have our house, but we are a part of the greater community. i think this country has always been welcoming and accommodating and integrate everyone who comes into this country. i still think that process is in front of us. we should not slow it down. this country was built on

immigrants. if you are five or six generations in this country, that does not mean you got here any different than others got here. we need to give these people an opportunity to come out of the shadows. host: a reminder. tomorrow, the house will take a vote on it irresolution against the attorney general. how are you going to vote? guest: i am going to vote no. this has been an issue that i think is more of a politicized issue than it is substantive. what happened with fast and furious was sad, a terrible tragedy. i hope that people understand that this contempt issue that is being brought on the floor -- i find it curious that we are doing it on thursday at the same

time health care reform will dominate the discussion. maybe it is an indication that the republican leadership does not want to make this a flag they will run uphe flagpole tomorrow. having said that, i am going to say no. it is grandstanding. the substance of what they are claiming as the charge for that contempt i think is not based on substance or fact. host: there is one story about the national rifle association looking at members of your party. raising the vortte stakes. the story says -- guest: one of the, if not the

most powerful lobby that affect decision making in congress, are going to score and they are going to have an effect. they do every time. they have been successful putting guns in public parks and have been successful with other efforts. i anticipate they will do the same thing under the threat that horrible things will happen if they do not vote the way nra wants. this has nothing to do with the second amendment. it has to do with an agency responsible for eliminating some of the weapons that go across the border by gun runners that should not go across the border. i think if the nra really cared about border security, they would sit down with the federal government and those communities and work out some doable, common-sense approaches

where they can participate in eliminating the flow of guns to the other side of the border and at the same time guaranteeing we are not violating any thing as sacred as the second amendment. i think they are dead wrong on this 1. host: the last call is from arizona for the congressman. caller: i would like to stand the line -- stay on the line after i finish my question. i have a sixth generation grandchild. what i would like to say to this representative -- i do not know why anybody would vote for you. youyou can smile and act like this is a big joke. you tried to hurt businesses. 1 foundation said this was 1.4 million illegal immigrants with this dream act.

who is going to pay for this? another thing the candy man wants to give everyone. the president stop immigration when he first got into the senate. why don't you look into the camera and tell the truth on this thing? the arizona republic -- there was a big article on this that said businesses are going to have to work together so arizona does not turn into a third world states. look at the graduation rate of all the hispanics. the dream act -- mitt romney said he did not want to do it because it was chain immigration. host: would you like to respond? guest: there is not a response that is going to satisfied the caller that i could make. it is that ire that is palatable

not only in arizona but other parts of the country. his family was here -- the native americans are the only real americans in this country. he is sixth generation. he was here since the 1700 it. he told me after all this for somebody because of what i look like or my last name or the language that i would speak for all the sudden to be asked to prove my legitimacy, no. i think we have to appreciate that feeling as well. i wish i could reassure the collared there is no threat.

there is nothing that i can say to her -- i am not going to agree with her. so the debate continues on this issue. state cannot do it. now i think people with a reasonable approach need to take over the discussion. host: raul grijalva, thanks a lot for joining us this morning. coming up, congressman mike pompeo will join us. we will talk about health care and other action in congress this week. later, our "spotlight on magazine" continues with sallie krawcheck. that is coming up later. first, an update on c-span radio. >> an update on contempt charges against eric holder. officials and staff members met

last night to resolve a document dispute that could lead to a precedent-said in a vote scheduled for tomorrow. white house and justice the partner representatives showed the gop staff some 30 documents related to the fast and furious operation and offered to provide hundreds of pages of documents but only of the house republicans would stop the effort and and their investigation. that offer was rejected. you can watch live coverage of that vote tomorrow on c-span television. president obama is back in washington today, but he heads out again next week on a road trip, the first bus tour of the 2012 campaign for the president.

meanwhile, representative steve israel is telling his colleagues to skip the convention and if they want to win an election, they need to stay in their districts. he told a summit yesterday that a trip to charlotte may be interesting but why leave your district. those are some of the latest headlines on c-span radio. >> sunday, an award winning author and the story and is our guest -- and historian is our guest. join us live with your calls, e- mails, and tweets sunday at noon

eastern on c-span2. >> "washington journal" continues. host: we are talking now with congressman mike pompeo, a republican from kansas and a member of the energy and commerce committee. tell us what you are anticipating. guest: it is always difficult to predict how the supreme court will respond. i have read the transcripts. i think judges were rightfully skeptical. the constitutionality of the law. i am optimistic that this law will be struck down. there is this storyne in "politico." what do you think? guest: we have to get it right.

one of the very first things i voted on -- i was running a small business for 16 years before i came to congress. i was familiar with the challenges of providing health care for a couple hundred employees. one of the first things i did was vote to repeal the law in its entirety. the challenge of health care is cost. should the supreme court undo it, which we were unable to do, we will take a measured approach and begin to address the primary challenge of health care which is cost. host: what is the best way to deal with cost for someone out there running a business with a few hundred people? guest: there is a lot of federal policy that would help those small business owners and the families that they support. we took a good pass for the

model, paul ryan's plan which says let's begin to give patients and doctors flexibility so they can create value so we do not have a fee- for-service medicine with third- party payments. putting it in the hands of patients and their providers whether it is their pharmaceutical providers or their insurance providers, all of the people who care most about adding value to the health care chain. it is a system that has never worked to create value and drive down costs. we will begin to look at it and take seriously this need to fix this out of control increase in costs. host: the phone numbers are on the bottom of the screen for our guest. mike pompeo of kansas

representing the fourth district. guest: it is centered in wichita, kansa. s. all great wonderful places in south-central kansas. host: graduated first in your class from west point. guest: a long time ago. host: i wanted to inject immigration into the conversation. we spent time this morning talking about the recent executive action. what is your take on the status of immigration? guest: we have immigration policy backwards today in america. if you want to violate american law and come here, it is not difficult. we have lots of folks here with an unlawful status which we

cannot continue to do. it certainly recognized arizona's fundamental right as a sovereign state to begin to enforce federal policy. .ost: let's get our first call from michigan. caller: good morning. i am sorry i did not get in with raul. host: go ahead, sir. caller: i am sorry i could not get in earlier with mr. raul. i cannot hear you. host: go ahead. caller: the question i had before was the guy said about

immigration -- he had come up in 1971. thank god i had the proper way to come in legally. what president obama is doing to get reelected. the other guy said hundreds of guns going from the united states to mexico and no one is checking them when they go to mexico. hope is gentleman, i republicans take care of it. guest: i think i agree with the caller.

we cannot reward folks who come here in violation of our law. we have to create immigration policy. we are going to have a thoughtful process where we make decisions about who and how many folks can come to our country over any given period of time. my family to a couple generations back most of us came to america but they came here legally. host: john is a democrat, good morning. caller: good morning. how are you? the congressman admits that he ran a small business with a couple hundred people. the health care bill was going to make it difficult for his situation. i thought that health care bill was more individually mandated where you could carry your policy from employer to employer. didn't they also write in there

to help small businesses with subsidies and whatnot? i am curious as to how that would hurt him as a small- business owner. guest: the health care bill even in its current status where large pieces of it are yet to be implemented -- much of the law not taking effect until next year -- has slowed down small- business hiring or even stopped because it is been driving huge increases in premiums for all consumers of health care which would be translated to employers in terms of the premiums that an employer or the employee would have to pay. you have seen our enormous unemployment rate now over 8% for years and years. this cost was directly translated to these small business owners who in many cases if the law is not repealed

will drop their coverage plan and allow their employees to go participate in a national health exchange system which i think would be unfortunate for employers and employees. we took good care of the people and provided a broad set of coverage is for them. -- coverages for them. host: this is president obama yesterday on the health care law. [video clip] >> we have to go forewords. it is the right thing to do. we have 3 million young people who are on their parents' health insurance plans that did not have it before. it is the right thing to do to get seniors discount on their prescription drugs. it is the right thing to do to give 30 million americans health

insurance who did not have it before. hostguest: the president is just flat-out wrong. the president does not understand that it is about affordable quality health care for patients. it would ultimately lead to doctors deciding not to practice any more. ultimately, physicians and pharmaceutical companies and insurers have to run their own businesses as well. the president mistakes in national mandate for good quality health care coverage. was the fundamental flaw in the law. host: here is a tweet for you. guest: i think the supreme court should overturn the entire law. it begins with the individual

mandate. it would give the federal government absolutely unlimited power. our founders did not intend that. there is no stability klaus. once that was thrown out, i feel like the court is required to overturn the law and get us back to where we were. we have wasted now almost three years. give us a chance to look at this and get it right. stop the legislation. host: neil is on the line from baltimore. caller: i am in my young 30's. my concern is for a lot of my friends who deal with unemployment, there needs to be some sort of care for them and

their family. i agree that obamacare is not good at all, but i believe there has to be some sense of urgency. if i do not get my job done quickly, i have problems. i think there needs to be an effort on both sides to get this resolved as soon as possible. i do hope it gets struck down by the supreme court, but i would have a huge sense of relief to know that the republicans and democrats are doing something that is best for our country. guest: i hope that we can work together to get this issue right. health care is one sixth of the nation's economy. i saw this every year when i was in small business. costs continuing to go up every year. there were many changes that had

to be made. i do not for a moment begin to believe that is the end of the story. there remains a lot of work to do to get at this issue of how we drive down the cost of health care while still providing the quality of health care that americans demand. i hope we work on its steadfast but not with a sense of panic. with a sense of steady march, bringing in the folks who have concerns. beginning to really get at the cost issue in an important way. host: dom, go ahead, on the republican line. caller: good morning. good morning, congressman. the fact that your previous congress man on c-span was in immigration, and i am an immigrant but also a u.s. citizen and an army veteran,

like yourself, congressman, my question is, first of all i have a statement. my aunt came to see my father. she had not seen him for over 40 years. she got ill in new york city and they called my father and they got on an airplane and flew there. be paid for every penny of the medical care that she got. when we came to this country, we had to have sponsorship. if you did not take care of yourself and your family, you went back to where you came from. my question to you, congressman, is does anybody in the federal government have statistic as too many illegals

are driving up our costs? guest: i appreciate those questions. i do not know the numbers but i am confident that data does exist. i can speak from my personal experience in talking to folks in kansas from our large hospital systems. we have an enormous set of costs being driven by folks here in america with unlawful status who come and seek emergency care and drive up costs somewhere else. whether it is the insurers, the health care providers themselves not being reimbursed. it is a very significant challenge. all of the issues surrounding folks who do not have primary care physicians, it is a real

challenge. i think one of the most important things that if we get this chance, if the supreme court gives us this opportunity, we can provide a system where folks are encouraged. they have a financial incentive. host: it is a busy week here in washington in a number of areas. congressman, one of the items you are being asked to look at is stallone's. here is a front-page story. they write in "the hill" -- they point out that even though there is a senate deal, it has to get past the house gop. guest: i do not know the details

of what is in the senate deal. it is a very expensive piece of legislation. one of the requirements that the house had was that it be paid for. this is a brand new concept that has been shocking to me. i have not seen the details of what is in there. it makes no sense to have those two connected. we need to evaluate each of those pieces of legislation separately. i hope they do not stick them together. host: what has been your biggest surprise so far? guest: the biggest surprise is the amount of information. you'll come here with a knowledge base that, in my case, a small business background.

there are health care issues and technology issues, communications equipment, lots of information. very much factual data that you need to know in order to make good decisions. host: what has disappointed you the most? guest: it has been disappointing that americans elected a group of folks that they wanted to come to washington, d.c., to begin to tackle the deficit spending. we have not done nearly enough to get at that. we have a senate and white house with a very different view. we have made our case. i am confident the american people in november will get it right. host: what is your biggest critique of your own leadership in the house? guest: it is a very constrained environment. speaker john boehner and others

all work in a constrained environment. we have presented some amazing job creation legislation. entrepreneurs and risk takers will want to come to america with capital. now some three dozen of this piece of legislation set on the senate floor. i get it. the senate has a different view. harry reid has an obligation to at least take action. he did not pass a budget for three years on his side. i find that outrageous and sally. get your work done. detroit, ongo to the line for democrat. good morning. caller: good morning. i have several questions for the congressperson. first of all, his salary is $175,000 a year. who pays for his benefits?

he is only in washington may be three months out of the year. the rest of the time you are campaigning or doing something that you should not be doing because you should be in washington doing your job. why should we continue paying you $175,000 a year? we sent you there. guest: the voters in kansas will get to decide whether i should continue in my employment come this november. i have a health insurance policy here now as a federal employee, there is similar to the one i had in the private industry. i pay for part of that for my wife, my son, my family, and the

federal government provides part of the premium as well. no different than 20 years ago. that is what we have to date. i spend some of my time here in washington, d.c., and some of my time back in kansas. when i am in kansas, i am working hard listening to voters in the district and to small businesses and all the people who make up the constituency. i promised i am working hard. caller: good morning. i would like to make a couple comments and then i have a question. the framing of the issue is very important. in many of these discussions, the fundamentals are often glossed over. in terms of health care, i think many of us understand and believe the problem is not actually health care but it is

the business of health care. therefore, it leads me to my question. i worked in mental-health with mentally retarded of statistic folks for many years. that delivery model of service is based on a non-profit model. why should we not look at the non-profit model for overall health care delivery system? thank you. guest: thank you for the question. if we free the system from the current restrictions, you will see many different models. you will see states try very different proposals. mississippi and massachusetts will have very different way that they want to serve the people of their state. we have all other health care providers, an amazing place

serving folks who have rea challenges and needs, set up as a non-profit. you will find other places where the model works very well delivering real value to customers and patience. we need to let the market sort it out which are better. host: more big news in "the wall street journal" today. guest: the court said yesterday the epa had the authority to regulate the way that it did. it did not say that it was a good set of rules that made sense for ordinary americans in

kansas. the president's energy policies have been incredibly destructive. idea with these issues with some frequency. the set of rules around greenhouse gas emissions will drive up the cost for heating and cooling your home. it is 104 degrees in kansas today. coal-fired power plants will be generating electricity. the president has taken oil, natural gas, and coal and has said we do not want them. we're willing to take money from taxpayers to get alternatives. families cannot afford those energy sources. i was disappointing that they found that the epa had authority to regulate greenhouse gases. i am confident the house will work to change that statute to

fix the clean air act. we all want safe drinking water and clean air but we must do it in a way that allows for affordable energy for everyone. host: good morning. guest: i really get upset hearing about race all the time. mexico andwe take move it over into europe, take france and move it down to mexico. how would everybody feel if you had french people leeching off the school systems and everything else? i wonder how many mexicans would stand up for their rights to come across the border. with the irs, they are getting money from their kids in mexico. guest: i absolutely believe that we need to create immigration

policy that treats people from all over the world in the same way. everyone ought to be treated in a similar fashion. today, we have a set of policies that does not do that. host: a vote tomorrow on a resolution that the gop leadership is putting four. eric holder regarding fast and furious and the documents. why is it important for the leadership to have this vote? guest: when you have someone killed in the course of conduct by the federal government that appears to have been illegal and certainly a bad policy, and you ask the administration to provide an explanation of how this happened and who made the decisions and who is going to be accountable, and the attorney general declined to participate -- that is something our constitution cannot tolerate.

our constitution demands that we have these three equal branches of government. when congress asked the president and -- just tell us what happened. explain the story. provide documents. they do not. we have an obligation to continue to follow through on that. if the attorney general provide the documents, we will vote to hold him in contempt so we can continue to work to get to the bottom of what happened to. host: look for that tomorrow. francis is a democrat. good morning. caller: good morning. i am in modesto, california. congressman, i guess you are a free market person, correct? guest: i think so.

caller: why would you vote for a $990 billion bill if free markets take care of the situation? don't you think we do not need a $990 billion bill? health care is a right. whether you think so or not. i do not want to pay for my neighbor to get his free medical care. everybody should pay for health care every year. whether they are using the system or not. it is the insurance companies that are creating this whole thing. i really think, you know, you cannot say you are free market and then vote for 8 $900 billion bill. guest: it sounds like you have a free market belief in you, too. you think everyone should pay

something. i agree with that. everyone should have skin in the game to make good decisions for themselves concerning health care. as for the farm bill, i have not voted for it yet. i have had a chance to look at most of what the house is working its way through. they will begin to work through their version next year. i will tell you that the vast majority of that is nutrition programs. there are some nutrition programs that we need to fix. again, you talk about being surprised. why there would be an energy bill spending taxpayer money in something known as a farmer the bill is odd to me. i hope we will not do that. i hope we will clean it up and get it right. we need affordable food for folks that really have a need. we provide that a safety net.

that food stamp safety net. comment on twitter. how do we address global warming? guest: it is fundamental in my view that trying to pass a greenhouse regulations in washington, d.c. will do nothing to fix anything that is -made climateth man at-mad change. it is the height of arrogance in washington, d.c. this notion of some about climate change and global warming. regulators up for dead. she forgets. if you put these rules in place, capital is global. to go manufactured in china,

india, vietnam. places that do not have any of this regulation. if we are trying to come up with a comprehensive solution, the direction that this administration has taken makes no sense at all. host: let me get one more call in. thank you for waiting. caller: in all my time about hearing with this legal -- illegal immigration, i have never heard of an employer going to jail for hiring illegal aliens. there are all kinds of meat processing plants. i've never heard of one employers ever going to jail. also, incidentally, i would like to know how much money you get from the koch brother located in wichita, the fastest brothers of the nine states. guest: i think the people which a top would be offended. the amount of my campaign is

fully disclosed. you can make a decision about whether it makes sense for me to continue in service of the country or not. as for illegal immigration, i agreed that employers have an obligation to make sure that the people they are hiring are here under a lawful status and are lawfully able to be employed. i agree with you. this administration has chosen not to enforce that part of the rules. or, frankly, much else of our current immigration laws. host: thank you for joining. our guest has been mike pompeo. thank you for your time this morning. coming up, our spotlight on magazines a segment. we will focus on a harvard business review. for ways to fix the banks in the

country. first, an update from c-span radio. >> as some business for you -- some business news for you. orders for durable goods rose after two months of declines. businesses pace -- place more orders for goods in may. they remain confident in the u.s. economy, despite a weaker job market and a likely recession in europe. that is a 46% rate above the procession low hit in april of 2009. orders are still over 11% below their 2007 peak. turning to international news, hillary clinton speaking earlier at the start of her three-day tour. if she has great hopes that an upcoming meeting could be a turning point in the serious crisis. the u.s. supports the envoy in

syria. she did not say if she plans to attend the meeting. just moments ago, the world powers will happen. iran and saudi arabia are not invited. the top commander of nato forces in afghanistan is expected to visit pakistan to focus on border cooperation. this is amid heightened tensions allegedly based on pakistan the soil. those lines closed after u.s. air strikes killed pakistan troops. those are some of the latest headlines on c-span radio. >> i could have told to at the beginning of this year about the republican primary. the republicans would look feeble. that there would be a nominee and the republicans would rally around that nominee and the true

nature of the race would reveal itself and that it was going to be close. i could have told you that the media would eat that up that romney is surging, obama is flagging, this is a race. i tell you what the next phase will be. the media will become more alert to the fact that governor romney has been completely evasive about his positions. he has been all over on many of them and played a game of hide- and-seek with the american people. the news media will be challenged to challenge him and be forthcoming. the store will be that for a while. that is the nature of this business. >> online with c-span's road to the white house at the c-span video library. "washington journal" continues. host: we continue with our

spotlight on magazine series. today we will speak with scott bland -- with sallie krawcheck. you speak about for ways to save the banks. i does want to read the first paragraph and did you to respond. you wrote that it is tempting to view the downturn as a closed chapter whose primary causes have been resolved, perhaps not perfectly, but fairly comprehensively with the dodd frank act regulation or reregulation. but big banks continue to have the government's problem. they have significant risks not just to them but potentially to the entire economy. what is that problem that you are saying? guest: first of all, thank you for having me this morning. i was smiling as your reading mad because the comment that

what you write these reviews months before republican them. since then, you have seen the jpmorgan $2 billion and probably growing loss at the jpmorgan. i think it is certainly not a disaster versus what we see. but it is a rehearsal for how the regulatory reform we see today has worked. the answer is, clearly, we continue to have holes. the idea of writing this article was not to suggest a whole bunch of ideas of new regulation. you could see what is going on in d.c. and how difficult that is. instead, to address the boards of directors for these banks and give them some ideas on how they can use the tools at their disposal. i think we would all like and be

interested in this country. host: you have several ideas that you laid out in the peace. we can get to them phoning in. sallie krawcheck is up in new york. she wrote a piece for the harvard business review. on the screen, we can begin to walk through the ideas that you put forth. the first one says that pay executives with bonds as well as stock. what do you mean by that? why is that an important idea, do you think? guest: the debate we have had as a country. at the debate around compensation has centered around to bringing compensation down. rather than add to that debate or expand on it, when i looked at was the form of compensation for executives. for whatever reason, as we came

through the downturn, we immediately started to pay executives more stock. i think about it. if you're buying a stock, you understand you could lose your money on the downside. you're not looking to protect your money. you're thinking about, how could this company grow? how could take on risk to grow. hold on one second. with big banks, are we looking for them to take on more risk or reduced their risk? there is a financial instruments in which if you invest in those, the most you did that is 100 cents on your dollar. the most. i was a chief financial officer for a large institution. in my experience, the equity investors were all about what kind of risky could take in order to grow and the fixed- income investors were all

about, reduce your risk. be very careful. " i don't think anybody would say that he did have an of stock in the company he ran. rather than rush, or holding a longer, how about we change the conversation and the risks profile of the executives? host: 1 idea you have this to pay dividends as it exists -- as a percentage of earnings. speak to that. guest: in the downturn we saw the corporate executives, once they had a stated dividend level, they hate the signaling that it causes to reduce it. and, by the way, they do not see that feature 100%.

they do not see that things are getting a lot worse. what you saw in the downturn was an executive invoice that was very slow to take down the dividend. if they had retained the dividend and go to the government's as quickly as they did. by having dividends as a% of earnings, they will go up when times are good. they will go down when times are bad, providing a natural breaking mechanism that does not exist today. host: we will get to your other points that you have written. before we go to the calls, i wanted to get your brought thoughts on dodd frank overall since it became law. what do you think? guest: it is an enormously complex piece of legislation. if you look of the banking

industry, in and of itself, it is highly complex. what we are doing is fighting complexity with complexity through this piece of legislation. you see with the volcker rule, which looks too bad proprietary trading. in order to determine if a proprietary trade is setting its own money, which is banned, there are hundreds of questions that have to be asked. for a trade. for a trade. it is mind-and numbing. -- mind-numbing. that is what with this piece i try to step back. if you are trying to chase every last trade, every last business, i promise you. i promise you these banking

executives are very bright. they will find new businesses and get through the loopholes. host: you talk about the complexity. what should a vote -- what should viewers be thinking about as the country moves forward and the financial future of the country moves forward? guest: well, that is a very broad question. i would say to the viewers overall, if you're doing business with a bank and have your deposit, you do have the fdic insurance, which is the best over time. your money is guaranteed by the u.s. government. in some ways, from a day to day basis, in terms of the safety of money, it does not impact the viewers. however, as with the help of the baking industry overall, it may

be out at the very far and where the banks cause every bit of this. it's maybe 100% correct, but not 1000% correct. this is not in the interests of the individual. they are the life of blood of the economy. their health, their continued functioning is a very important issue for everybody in this country. host: first call for our guests. good morning. caller: my question is, given the history of the last two years, how is it that the trend has now been getting rid of dodd frank employees and, from what i

understand, it has not been able to be implemented. can you explain why glass- steagall wouldn't help? guest: i would say a couple of things. what we are observing between washington looking to regulate and the industry facing off is part of the grand american tradition. you have your role, these guys have their role, as long as everyone knows their role, you are in good shape. what is going on here is nothing less than what happens during periods of regulation. asking people, the banking industry has lots of lobbyists. they sure do. out of this debate is hopes that folks become more informed. arguments are heated and dramatic and we come to something that sort of looks like the right place.

what is frustrating to me, quite frankly, is that dodd frank, with all of its complexity and scope and pages, it did not take care of all the areas of risk out of there. what is frustrating to me is that in the proposal by the securities and exchange commission to further regulate money funds. your money, your cash and deposits, the money funds continue to have some risk to them. the continue to be a soft spot in the financial-services industry that is liable to, and a terrible downturn -- in a terrible downturn to be liable for funds. the fact that she is doing a target -- a terrific job but there is not able to regulate that, clearly the ballot needs it. it is frustrating. it is the gridlock that occurs. in terms of glass-steagall,

there are many who say that glass-steagall would have stopped this downturn. lehman brothers was not a bank. freddie and a fannie had not come together. bear stearns was the first one that went under. that would have not fallen under glass-steagall. aig did not fall under glass- steagall. glass-steagall would not have stopped what happened. however, if you broaden it out and say, let's not be so liberal, the real issue is that these institutions took on too much risk. more risky than the others did. they did not have enough capital in order to absorb the losses when they came through. in other words, you hear people talk about too much leverage. that is really the core issue. the core issue is not of a proprietary trading over here. the real core issue is too much risk. not enough of a capital.

the key question today is, have we fixed that enough for the next downturn? are those things fixed enough? reinstating dodd frank, glass- steagall, the volcker rule. all that is our different ways, different tools for potentially reducing that risk. host: we have a nick on the line from california. good morning. caller: i have a question that is a little bit out of line. i have been trying to get through for a long time. i would like to ask this young lady if she is aware of the house bill that was passed last year that i think is called the debt to free american act. that authorizes the banks to charge everybody 1%.

the larger your amount of transactions, the higher it will go. nobody has mentioned it. i got an e-mail from my friend last year. host: what it does it mean to you? you brought up this bill. why did it catch your attention? caller: because of what it is for. it is for the banks to rip us off more than they are already. host: 10 you speak to the caller is referencing? guest: i had trouble hearing. it charges 1% for what? host: i think he said per transaction but i do not want to quote him. guest: here is what i would say.

one of the things that dodd frank did, if you're an investor, the core question for you which is very difficult to answer, is what is the earning power of these companies going forward. by taking away with these institutions can charge on debit cards, they wiped billions of dollars of revenue away from the banks and those institutions. by taking proprietary trading, the volcker rule, no one knows how much that is, but it is billions of dollars of revenue that is taken away from banks. would you see the institutions do, which is a bit of the capitalist way, where can we

make those up? i think jamie dimon once said, if we cannot charge more for the hamburger world, we charge more for the french fries. what is fascinating is d.c. the institutions that have tried to charge more. it is a bit of a seesaw that is occurring during this period of volatility. the stock market is saying that it is trading below your value. the stock market is saying that we think you're going to bleed a value from here for some time to come. this is all trying to shake itself out. host: in the harvard business review, one of the points you

are making is don't managers just by earnings? it is in the wall street journal this morning about firms resistance to pay equity rules. they could force executives to disclose the gap between what they pay their ceo's. it is a potentially embarrassing figure. put all of that in perspective, beginning with your idea of the banks. guest: the idea is that banks aren't a lot of money or lose a lot of money based on what is happening in the external environment. banks are borrowing short and lending long, as they say. if equity markets go up, they tend to earn a lot more than if equity markets go down. i have been in the banking

industry and around the banking industry for more tears that i frankly care to share with you. while everyone says that if the market is going up, i am so smart, there really are significant impacts for those external factors. earnings can be driven up or down by lots of factors that have nothing to do with what managers do. what is happening in the banking industry right now, your viewers are very aware of it, is that a lot of the customers are frustrated with the banks. but, they are not leaving, because they do not have that opportunity. it is too big of a painful or it is too complicated. if you have unhappy customers who aren't moving because of the difficulty of it, if you have earnings that are being driven from an external factors, you have a very weak and business model for innovation. institutions can come through and take away shares. the point i was working to make

is that you better be looking at these metrics. the earnings will go up and down for lots of reasons. you better be looking at the underlying metrics. host: michael is on the line from los angeles. an independent scholar. go ahead. caller: good morning. there was an article written about me called be highly motivated black. i have been looking for since the mid 1970's. i have never been able to find it. that is number one. the second thing i wanted to tell you is that i do not think the deal made with the banks by the fed during the march crisis truly works. some people are doing it and some people are not. i have found that bank of

america is still up to the same old dirty tricks. i was told by a bank of america employee that they actually have people working inside the occ that can hold up any complaints that you make. i just wanted to tell you about that. i think people should know that they should take a look at the investigative unit. to see what is going on. thank you. if you know how i can get a hold of the article written in 1972 about me, called the highly motivated black. i would appreciate it. guest: you can go to the website which is hbr.org and try a

search of their. host: we have about 30 minutes left in this segment with our guests. sallie krawcheck has written an article in the harvard business review about a way to fix banks. we of a democrat from lewisville. caller: i would like to comment about how glass-steagall would not have kept us from having the financial problem. yes, it would have. everybody in the united states that is in the business world knows the we need a separation between the commercial bank and the commercial business. you cannot have an investment bank on the same footing as a commercial bank. investment bank was separated by glass-steagall.

the other thing that would help banks is put all the bankers in jail. have you seen any one of them go to jail? that would be a big incentive for banks to not do what they're doing. host: sallie krawcheck. guest: i think we would agree that the downturn would not have occurred, are would have been less than it was if the banking institutions had taken on less risk. the rest of the discussion is really about how to reduce that risk overall. whether that the reinstatement of glass-steagall or the dodd frank act, which is what that is looking to do. talking about engaging boards. i think we would all agree that the primary issue about how much do the banks have is an

important -- was hugely important factor in the downturn. important factor for us going forward. that is why i think this $2 jpmorgan --on loss for they are fully able to absorb it. the market mechanisms work the way they are supposed to work. the stock went down. the government did not have to come in. it provides us with it little bit of a small scale dress rehearsal for how the regulation taken place so far is working. what worried me about it was quite frankly not the size of the loss. what worries me is these

institutions are so complex that it was the press who told jpmorgan they had the loss, that they were so deep in the weeds. he was not aware of this. whenever the reports were coming up to him, it took them weeks to figure this out. what worries me about that is not the size but rather demonstrating the complexity of the institutions. then, by the way when we talk about the volcker rule, you cannot do proprietary trading -- we went into a discussion about whether this was a proprietary trade or not. what matters is they did not know they had that loss and they had to track it down. how much capital do they have?

host: there is a fourth point to your piece in the "harvard business review." give the board scrutiny to booming businesses, too. a close look at them as well. explain what you mean. guest: the boards are not full- time. in my experience, they come in and they focus and they have all of the regulatory and governance stuff they have to do, and then they are focusing on the businesses that are in trouble. it is human nature. what we going to do to improve it and how many more customers are we going to look to get? how many people are we going to fire? how can we get this thing back to profitability? in the banking industry, on the trading side and institutional

side, there are very few barriers to entry. companies can come and go. if there are businesses in that part of the banking company that are earning very high returns, you need to take a look at those. there is not any reason those should persist. the reasons that were given are we are smarter, innovative. there are a lot of reasons. you may have had way smarter people than other institutions, but another reason is you are taking on too much risk or are skirting to close to regulation or breaking some laws. therefore, i cannot tell you that the number of times i have seen the return on a business was too high and unsustainable. with the jpmorgan loss, if you

read the stories that were coming out about it, what you read it was i did not take a close look at it because it was doing so well. jamie dimon let it run its course because the returns were very good. therefore, the recommendation is to re-jigger your time and make sure there is a really good reason for it because i promise you that next issue, the next big issue that occurs, will be saying the returns were very, very good. host: we now turn to twitter. there is a question comparing the u.s. banks with european banks. can you compare and contrast? guest: it has always been a bit of a challenge because there are different accounting standards between the two. but our institutions did raise

capital. that capital cushion that can absorb losses. during the 2007, 2008, 2009 time frame, they went out and raise capital in very tough environments. in some cases, brought kicking and screaming. which has now been paid back. if you look at where they started and where they are today, they are quite a bit stronger. despite the moody's downgrade which we can talk about, but they are stronger. the european banks are several steps behind. not only have they been less well capitalized than u.s. institutions, but you have the issues going on with the euro over there and the nervousness about spanish and italy and how

that is going to result itself. make no mistake. if that happens, there will be a domino effect around the globe that will impact the european banks will before it impacts the u.s. banks. host: how about speaking to the downgrade for a moment? guest: it is interesting, the debate that has occurred on this. there is a lot of talk. moody's came in and downgraded five of the largest u.s. banking institutions. maybe not within spitting distance, but within throwing distance of junk type ratings. the debate that occurred was the banks are now stronger than they were when the ratings were higher. my reaction is yeah but the ratings fore were wrong. it is pretty darn clear that the

ratings agencies had it wrong. a lot of people did including the banking executives, the board, the regulators, the market. the ratings agencies did as well. it has taken them this long to a very thorough, very analytical work to get these banks the right ratings. if the banks had been rated corrected before, there would be upgrade occurring. not downgrades'. let's hope the banks are rated correctly right now. on a relative basis, the debate about they were downgraded is the wrong debate because the ratings prior were just wrong. host: out of new jersey, james, thank you for waiting. caller: how are you doing? i am an insider with j.p. morgan

chase. i can tell you that the financial cushion that you talked about -- you said it was $128 billion. wrong. the financial cushion was $3 trillion. $3 trillion, the financial cushion that they have for themselves. when it did happen, i got informed and i tried making things correct by correcting one of the deals that was made. i was told i did not have to worry about it because we had a cushion of $3 trillion. not $128 billion. host: let's hear from our guest.

he says he has a much higher figure. guest: i think if that is the case, a j.p. morgan should reveal that to the market. that is an extraordinarily high number well beyond the capitalization that one would expect. i think maybe an 8k released demonstrated in the market that kind of cushion would be helpful. host: let go back to a twitter question. asking about the box that they say bernanke is in. guest: it is a very challenging situation that they are in because typically you lower interest rates and by doing that you can spur demand.

these folks are clearly pushing on a string at this point. the rates are as low as they can go. it is hard to take them below zero and yet we are in the midst of a tough recovery. this year has the feel of every other year. at the beginning of the year, ok, here we go. the demand is really coming back. then you get into these summer doldrums each driven by different things. in this case, nervousness about europe. but we are unable to get this recovery going. people get very heated about tax increases that are coming and uncertainty going forward and health care reform. i think it is hard to point to one simple reason. business executives just feel nervous, maybe too strong of a

word, but very cautious. the business that i ran at bank of america -- the one place we were missing the budget was in the loasn we were doing. the client base was high net worth individuals, people who are out there starting businesses and growing businesses. people talk about the banks are not lending. the banks were very happy to lend to those individuals. you cannot get them to take a loan. the fed continues with operation twist to reignite the economy but it is a very challenging set of circumstances. host: speak if you can about public perception. there is a cartoon here in the "the new york daily news."

they got the cheating ring mastermind genius. "they are taking hithey are takl street. guest: it is so funny to say that. it is a lot of ink being paid attention to one kid. there is a lot of anger toward the financial services industry today. also a lesser degree to the government today and a feeling that these institutions have let individuals down overall. and a feeling that in good times

when individuals feel like they have opportunity, to let their kids have opportunity, feel like they see the country moving forward, they are very willing to look at those institutions and feel like if they are not being helpful, at least they are not standing in the way. right now we have the feeling that those financial institutions are actively working against the individual. that filling is perfectly understandable and will certainly persist until the economy begins to recover in a way that feels like the whole country is moving in the same direction. host: there is this question on twitter. we have seen this before. is that true? what is your broader perspective? guest: i am not a lawyer.

the debate that occurs about these people breaking laws, etc. -- i will leave that to the lawyers to discuss. but make no mistake. individuals have lost their jobs. a lot of individuals have lost their jobs. some of the ones i know -- and i know this is not popular -- but they are individuals in these institutions who made mistakes, lost their jobs, and feel terrible about it. here comes the hate mail. the folks who are at the top of these institutions today had been determined to be people who had the experience and the expertise to lead these institutions forward who were not part of the significant mistakes that were made. i understand the desire for people to be brought away in

handcuffs. i cannot a fact that. that is why the work i am doing is to try to help the board to show them the places where they can make a difference. all i can do is given my experience as a research analyst covering the industry is to try to say okay looking forward what all the levers we have to keep this from happening again. host: oklahoma is on the line. hello, randy. caller: hello. i just wanted to say that you say if there is a run on the banks, people would be 100% covered because the government guaranteed it. would that be the chinese

government? guest: the u.s. government remains very strong today, so that a government guarantee continues as long as we can see forward. but you bring up a very good point about the health of the banks and bank runs. because confidence can be a fragile thing. while we think about the historic bank run, and we all have pictures of the great depression and people lined up around the corner, i think a change here is that bank runs today can happen at 10:00 at night sitting at your kitchen table with a few cl icks of your mouse. it is much easier if there is a sense of danger out there for individuals and institutions to move their money away. what we saw was wachovia when it was having its issues, people were draining money from that

institution not by standing outside in line. that is another factor that needs to come ins we think about the next downturn of how much easier it is for there to be runs on banks today. host: tim is a democrat. good morning to you. caller: good morning. i noticed from the spelling of your name, you almost have to be and the financial business. i have a couple questions. certainly, my gut feeling on what happened back in the great depression and the bank meltdown was capital requirements with banks went way down. also, i think during the bush administration, there was not adequate funding of the sec. now we have the consumer

financial transaction organization. i would like to hear your comments on that. somebody else mentioned this, the transaction tax. also referred to as the robin hood attacks, getting at these high-speed transactions that are based on nanosecond-type stuff. no value at all going to anybody but traders themselves. i think you may have talked about this earlier. how do we limit peso traders do not make a billion dollars -- limit pay so traders do not make a billion dollars? if you could get europe to buy into that, maybe that would be a positive thing. host: of several different points there. guest: i was trying to figure by my lastu meant

name. maybe the "check" at the end. you know, you bring up the issue of high-speed trading. that is one that i thought about and i have not come to a conclusion. i always used to tell the folks who worked with and for me at the institutions that i worked at we need to be very careful of opinions versus facts. i always wanted their facts. with high-speed trading, the initial take is certainly one of what value does it bring and is it worth having. i have not seen any research yet showing that it hurts the individual investor. the moment i do, i will be certain to build a case or work on it. things just happen faster.

they just happen faster. even when i was a baby research analyst back in the day, to think about coming into the office and buying a newspaper -- who even heard of "the financial times?" spending the first 30 minutes leafing through the papers. versus today, i've already read into the night before. it is just a speeding up of information and content. there is no doubt that we need to make sure technology works. what i have noted is we have ipo's, both of which went poorly for a number of reasons. we have to be careful we are not

putting too much into those machines and leaving out human judgment that occurs. host: we have time for a couple more calls. mike is on the independent line. caller: hello. i have a couple reports i was hoping she could address. i have a feeling -- i have a belief that clinton was hurt by glass-steagall. and not understanding what was going to happen or researched it enough. that goes into my point. i was wondering with bear stearns and lehman brothers and

the larger investment banks that were doing derivatives and all of these nuanced debt, making profits off of bundling debt -- that is just an uncommon sense situation , business is making money on bundling debt. it goes against all of human nature. i just do not understand it. my point is the regulation was lax. you made a reference to the competence of the industry earlier. i feel like that is the main problem. you have on qualified people in positions of authority. i am a 30-year homebuilder. i did work on deciding how many people were needed to do a

certain job. what is happening more and more is the downgrading of the regulatory system gest two people to watch over something that needs 20 people. as a home builder, i cannot get away from that. i feel the un-safeness the financial industry got us into this situation. guest: one word i wrote down was the incompetence of individuals. i would add a word to that. the word that i would use is " groupthink." of the individuals in these companies -- high scores, a +'s in college, individuals who got together and there was an entire

industry that missed the subprime bubble. let's go back. this was not the first time. if you go back, you can see it this happened during the internet bubble of the late 1990's. it sort of happened during the 1987 stock-market crash. you have these cycles that occurred and then there is a crash that occurs. in hindsight, it is so obvious. that is called creeping determinism. things that happened in the past must have been so obvious because they have been. i remember being at large meetings and people saying we know there is a bubble occurring somewhere and people thinking it was in china.

i think a big factor here is groupthink which you have individuals who breathe the same air who are together all the time who come together and form the same opinions, and therefore lacked the diversity of perspectives. having more individuals within these organizations at the top of these organizations who have a diversity of backgrounds and perspectives is exactly what is needed and who are empowered to ask this question. a woman who was a friend of mine who was on one of the boards of these financial institutions who would say exactly what is the purpose of that. because she was one of the very few women in the room -- "you are not a particularly smart be quiet" -- but that

was the right question that should of been asked. you have 10 people around the table and one opinion because they come from the same background. host: from twitter -- one of the editorials and "the washington post" today -- only six members of the senate have done so. the house does not even keep a tally.

take us to congress. guest: enough said. if there is any place where individuals are using what to be viewed as inside information, information that has come to them because of the privilege of the position they have been put into whether it is in the private sector or the public sector, they have this trust placed in them by voters or shareholders, they need to be operating fully in the interest of the individuals they are being asked to serve and get rid of those conflicts of interest. i do not even think this frankly deserves a lot of discussion. host: good morning to lucy who is on the republican line now for sallie krawcheck. caller: i am calling about the

federal reserve. i was told that the people that took the tarp money -- their insurance on the account is unlimited. whereas the regular banks who did not take the tarp money are limited to $250,000 on their accounts. it seems to me this administration always gives to the people who are doing wrong and punishes the people who did write. had the government, if they needed to give those banks money, had they gave all those banks money instead of picking and choosing like they did, if they gave everybody the same rules and the same support, i believe the regular banks could have taken over a lot of these accounts that the other banks had.

it would have made the smaller banks stronger. we would not have been going through this no lending. i think what you are referring to is there were extraordinary measures that were taken by the government' to secur the deposits of individuals. during the height of the crisis 2008-2009, those actions were taken. i certainly understand the emotion around it but you did not want to see the other side of this. we are now back to a more level playing field where the fdic insures the deposits across the banking industry. the same for individuals all across the banking industry.