the federal government has invested billions in the delivery of electricity since 2007. "washington journal" with your calls, tweets, and e-mails is next. host: good morning and welcome to "washington journal" on this monday, july 9, 2012. the president will announce his plans from the white house today. it would allow breaks for americans making more than than $250,000 to expire. the associated press reports that house republicans will countedder that with their own legislation to extend the tax cuts for higher income earners. we'd like to hear what you think about this development today. numbers to call --

you can also find us online at twitter. we can share that on the air. you can also join the conversation on facebook by looking for c-span or e-mail us. host: here's our question for you this morning. what do you think of president obama's decision to push for a one-year extension of middle class tax cuts? here's the associated press reporting. the president is launching a push to extend tax cuts to the middle class as he seeks to shift the election year economic debate away from the dismal jobs market and toward the issue of tax fairness. obama in an address from the white house today will call on congress to pass a one-year of tax cuts for people making less than $250,000 a year. that's according to a senior administration official.

the president's appeal to the middle class voters is aimed at drawing a contrast with republican rival mitt romney and congressional republicans. the house g.o.p. is expected to make its own push this month for an extension of all the bush era tax cuts due to expire at the end of the year, including on wealthier income earners. the president opposes extending the tax cuts for those high-income earners. let's take a listen to a back forth on this issue that occurred yesterday, the sunday talk shows with an arrange of guests weighing in on the looming fiscal cliff that's yearg at the end of this and how to deal with it. let's hear from a democrat in california and congressman tom price, republican of georgia, on "fox news sunday." where the cooperative nature of washington needs to exist. we have a huge fiscal challenge, over $500 billion in increasing taxes at the end of the year. there are all sorts of taxes

coming due. you've got marginal rates going up, capital gains going up, dividends going up what we need to do is to work and solve those challenges. what we will do in the house of representatives is pass a piece of legislation before the end of july that says we ought to keep those rates exactly the same for at least a year. something governor romney he believesause that will stimulate the economy and provide certainty in the job markets. >> would you agree with that? >> as i said before these are bills to nowhere. tom knows it won't become law what we're doing is saying we're willing to take the time of the people of this country, taxpayers' money to run the house of representatives. >> do you let it expire? >> no. you work together to come up with a real proposal that can pass both houses and get signed by the president not just put bills that you know are going nowhere. it's time to do something together. >> i couldn't agree more. you note process that allow that to happen is for the house to act and then the senate to act and then you come together. >> the bills have a chance in both houses not just doing something that's a message piece and dies.

host: "fox news sunday" yesterday. what do you think about the president's decision to push for a one-year extension of middle class tax cuts? here's what john had to say on twitter. "the tax cuts work well practically and politically for people who make less than year.25,000 a this is a win for the president." "the new york times" has this story this morning, obama poised for a new fight over the tax cuts. it says the president's proposal could put him at odds with democratic leaders like representative nancy pelosi of california and senator chuck schumer of new york who have advocated extending the cuts for everyone who earns up to $1 million. and it will most likely do little to break the deadlock in washington over how to deal with fiscal deficits. republicans sense a chance to make gains in congress this fall. heading to riverside, california, for our first call

this morning. michael is on our independents line. good morning. caller: good morning. host: what do you think about this? caller: i don't agree with that. i see many senior citizens and persons out here that don't have vouch income. -- don't have very much income. first of all, i can't believe that many people call in and are defending obama. you have people, dual citizen veterans, and he never makes mention of a cost of living increase for them. we know they stimulate the economy. i believe -- someone will often call in and say only rich folks provide folks with jobs. believe that you definitely need to extend the tax cuts for the rich folks and be concerned and considerate of lower income senior citizens and veterans. so that's basically my comment about it. i don't think nobody should trust the middle class tax cut.

we can see the health care proposal, many of them are going get hit very hard. that's why i'm an independent. i wouldn't vote for him for no way in the world. if i had to vote for either, i'd have to be forced to vote for romney but i wish we had an alternative person up there other than these two. thank you for your time. host: thanks for calling. cindy says we all need to share the pain. let all the tax cuts expire. congress returns to work today here in washington after the fourth of july recess. here's what the "new york times" says. we'll hear a little bit of what

was said over the weekend talk shows. here's how "the new york times" story continues. it says the struggle to frame the debate comes as the campaign moves into a period only four months before the election when the perceptions of voters begins to harden. polls show a tight race. it's mr. romney closing in on mr. obama. in certain swing states but with neither candidate able to break out decisively. mark in little river, south carolina, republican line. good morning. caller: good morning. this is just another attempt by george -- by obama to buy votes on what were called last week the bush tax cuts. now they're just the middle class tax cuts. isn't that amazing how the sound sounds so different from the middle class tax cuts to the bush tax cuts? let's see, we were buying votes on the college tuition, on gays, on the hispanics, not going to

go after them, on women. let's see -- what can we buy votes with next? it's coming along to where we buy, buy, buy. guess what. it's not going to help any. host: would you extend all the tax cuts? caller: all the tax cuts need to be extended. host: let's hear from a democrat, michael, detroit, michigan. good morning. michael, you're on the program. are you with us? [no audio] let's go on to bill on twitter. raising taxes right now is ridiculous given our economic employment problems. president obama is riding a shore bet, trying to take credit. bill, independent line, rogers, arkansas. hi. caller: hi. we're a small business with two employees, taxed as an s-corp, as if it's an individual's income so the $250,000 apply as we actually make that, so the

36% rate, a 9.75% contribution to the social security and state taxes, personal property tax, franchise tax, gas at the pump, gas on tv, gas, oil, electric. by the time we get to the 70% middle class makes what looks like $250,000 a year, there's nothing left. so the 2% is typically a ploy. they say they want to do things for small business, but it's being squeezed from both sides. mitt romney makes -- pays 15%? we pay about 70%. i think we're in deep trouble. and the 2% is not even helpful. host: what do you think about a tax cuts in the place for those who make under $1 million? caller: the tax cuts, it's way out of shape. when i was younger and making making $18,000 to $50,000, i always paid taxes. i don't think anybody is at that level anymore.

when you get to the point of people making over $1 million, is that gross income for their business? is that personal income? i don't think that i should be paying more taxes or that anyone who makes less money than me should be paying more taxes than people who make lots of money. i think the soup irrich, you -- super rich, you look at the corporate c.e.o.'s, 450 times the employ, there's a lot of places. but it's mostly ammunition in the press to say we're for the small businessman, for the middle class. and nobody ever really breaks it down. host: here's "the new york times" talking about the potential crow mise between and republicans to find a compromise for republicans on which bush tax cuts to extend. ms. appeal yowsies -- -- miss pelosi and mr. schumer favor

favor $1 million the cutoff. mr. schumer has said people are not likely to spend the savings and help the economy. administration officials at the white house said they did not believe that the difference between the white house and the democratic leaders was a big obstacle. charles, republican in new york. hi. caller: how are you doing, ma'am? host: good. how are you? don't think that we should raise tax on anyone. that's my feeling. not with the unemployment rate the way it is. there was an advocate -- i don't know if it was your show, a few weeks ago, talked about the when the unemployment rate is above a certain amount, we shouldn't raise tax on anybody. i think he said around 5%. if the unemployment rate is under 5%, maybe raise taxes on everybody a little bit to help bring in revenue. i don't know who the advocate was, but i thought that was a good idea. i think this is just election year ploys. the camp has both houses. that's all i have to say. host: let's look at the breakdowns of the tax increase

that could go into play starting january 1, 2013, unless congress acts and moves forward. the two marriage penalty elimination provision will expire so that the standard deduction for married couples will fall no longer double what it is for single filers. the exiling 15% bracket for married couples will fall, no longer double for single filers. the 10% tax bracket will expire, reverting to 15%. here's another one, the child tax credit will fall from $1,000 to $500 and will continue to go through those as we continue the program this morning. next up, new jersey ed on our democrats' line. good morning, ed. caller: good morning. thank you for having me on c-span. host: thank you for calling. caller: i believe the tax cuts should be extend for the middle class on down. if you look at the income disparity, by any economist, the income disparity is as high as the great depression.

simply put, the rich are getting the middle class on down are losing ground. in fact, i think over the last it's minus 6% for the middle class and the rich people are just -- the gentleman from south carolina said obama is buying votes. i had to chuckle. when the citizens united, the republicans are trying to buy the election. what we have to do is stop the loopholes and the special tax rate cuts for jobs being shipped overseas. with bush, too, we lost almost eight million jobs being shipped overseas. that's going to destroy the economy for years to come. i think what we need to do is concentrate on middle class, the working people in this country. the republicans, everything they do is just geared towards the rich i think it's time the middle class, which drives the economy, makes a comeback in this country. thank you. host: let's take a listen to senator mitch mcconnell, leader of the republicans in the

senate. he was on cnn's "state of the union" yesterday talking about this fiscal cliff. >> what we could do, what the house doll in week, i believe, is go ahead and extend the current tax rates for another year. that deals with part -- >> the president said he would veto that. >> the president shouldn't veto that. that is the same president who signed the very same thing two years ago with the argument to do otherwise to make the economy worse. >> i understand. >> the principle reason that we're having this economic strong what the government is doing to the private sector. the president keeps talking about public sector employees, unemployment in the public sector is 4.2%. we've got to get the private sector going. that's the only way you have job growth which creates revenue for the government. everything this administration has done, candy, has taken us in the wrong direction. mcconnell on mitch cnn yesterday. bill, independent caller from philadelphia. the newsou think about that the president plans to make a push today to extend the

middle class tax cuts? caller: good morning. thank you for taking my call. the president should sign these tax cuts. as the gentleman that just finished speaking said, the wealthy, the millionaires, are going to make their money regardless of how much taxes they pay. they're going to make their money because they have invested. and they are going make their money. middle class, we are not able to invest, therefore we live from paycheck to paycheck. we should not pay as much tax as we are paying. the gentleman from south carolina is grossly misled, grossly. i understand you, brother. and bare in mind, when you vote for romney, he's going to screw you and he's not going to kiss you first. taking my call.

host: this tweet, "president obama said in the past, you don't raise taxes in a recession." he puts a link to a youtube video. independents line, florida. what do you think? caller: thanks for tailing my call. i like c-span. i like it a lot. i just don't see how we can get out of this mess by just everybody having to pay their fair share. we got into this mess by these wars and all of these tax breaks earlier. i'm sitting back going, well, some day we're going to have to pay for this. and we're here now. we have -- we're in trouble and we have to pay this. there's no getting out of it. host: what would do you? caller: eliminate the tax breaks for everyone. it's time for everybody to buckle down go to work, and pay these bills off. the country is in trouble. host: would you fall into one of these categories we're talking about? would you see your tax goes up? caller: yes, i would i'm not wealthy by any means, but my taxes would go up.

and i'm willing to pay that. i love my country. i want it out of this fiscal mess it's in. we've got to straighten this out. everybody has to start paying for it. sooner or later, and i think we're here now. host: this tweet, "the bush tax cuts were temporary. the bush tax cuts are a big contributor to the debt. and the tax cuts don't create jobs." that's one opinion. can you share your opinion on twitter by writing. here's "the new york times" talking about the events the white house plans today. they hope to squeeze maximum political mileage out of the rose garden event surrounding mr. obama with families and workers who would benefit from the middle class extension. on tuesday he'll take his mezage to iowa -- message to iowa, which turned him into a serious presidential contender in 2008. laurel, maryland, richard, independents line. good morning. caller: yeah. richard from maryland. laurel, maryland, actually. i have a suggestion based on

what senator reed, i guess it is from arizona -- host: from nevada. caller: whatever. anyhow, a while back, probably six months ago, he mentioned that they had proposed a .5% tax increase or a surtax on the rich -- above a certain income, the wealthy and so forth. i have a suggestion to do that, .5% surtax, based on the gross income of everybody. in other words, a guy making making $10,000 a year, you use his glows income and tax -- gross income and tax him .5% would only be $50. maybe my math is wrong. but in any case, and do the same to the rich, the wealthy, and it

would be an equal. you would be paying a proportion of what your gross income is. not after deduction income. that's a suggestion. it kind of goes along with what harry reid had in the senate. thanks for the time. host: thanks for your call. brad, republican, clinton, south carolina. caller: good morning. how are you. host: good morning. the people pay no federal taxes in this country yet they just passed a bill called obama care. they talk to their senators, representatives, and got this stupid bill passioned -- passed and now they don't want to pay it and want these tax cuts extended for the lower class, for the people who don't pay any taxes, of course, and to keep them from paying taxes, and to be placed on the high income people. well, every time i hear a new product or new program being offered, it's always --

[inaudible] you just would not have the money. to allow this to keep going, being festered by just passing bills like obama care and then the people not paying taxes and acting as though some bogeyman was going to pay it, is so ridiculous and bad for our children's children that we're passing the buck. it's like we're sinking and we won't understand, grab the concept, that we all have to pay tax it's we want these extra programs. they're just not going to be funded by borrowing money from the chinese endlessly. this is just blows your mind how we're doing to ourselves, keep voting for the people like obama to tell us we can have everything we want and some magical person is out there just not being taxed enough. if everything he does, and proposes like daycare for children, they'll turn around and say tax the rich. there's not that much money to get out there. if half the people aren't paying, they just pay $500 a year and end this earned income credit stuff that

they even get money back, then maybe we could have a chance atrophies cal sanity. host: what do you think about the republicans' call to extend all the tax cuts including for those who make over $250,000? caller: like bill clinton did he took -- sure, reagan's tax cuts were great, but they were too much. clinton fine tuned it. he did it across the board. he didn't just grab individual people. and in fact, when bill clinton tried to do the millionaires tax in his term, all of the athletes, entertainers, whined, oh i'm such a glorious entertaber or writer or musician, you can't tax me, that's unfair. the point is, bill clinton raised tax as cross the board. this democratic group that's in power now wants to play class warfare. they're not like bill clinton was. they're trying to say we're going to raise taxes on this boogie group so you can have everything you want, we can buy your vote. bill clointian was -- clinton was more middle of the road. it's very frustrating to watch this i think it should go up the

board, a cross for -- across for everyone. i don't want it that way but because we're constantly voting for new benefits, new programs. and somebody's got to pay for it. host: on twitter -- going to 2006 spending limits as ron paul proposes is good. here's a story in the latest "christian science monitor" neckioused on congress -- focused on congress. the economy's problem, congress, concern is rising that the partisan gridlock is halting recovery. david brandt reports from washington. a rising chorus of voice inside and outside washington is warning that political gridlock in congress is so severe that it has done damage to the economy and threatens to do a lot more. president obama, of course, is the chief blame congress finger pointer, perhaps to be expect the as he fights to win re-election as the economy flails. so plenty of others, including the federal reserve chairman and chairman about every commerce, and congress's own budget office to name a few, also say congress

is a factor inhibiting economic recovery. and the "christian science goes on to look at issues facing the country right now. the debt limit. the fiscal cliff as we've heard talked about earlier on the program, and the sequester, mandatory spending cuts that will kick in 2013 if lawmakers can't find comparable cuts by then. they were intended to force congress to agree on long-term deficit reduction. but so far it hasn't. we'll be talking about what congress plans to tackle this week and in the coming weeks in just a little while on woifnlg "washington journal." -- we have congressional quarterly reporter niels lesniewski who will be joining news about 20 minutes. for now our question for you is what you think of the president's plan to try to continue the tax cuts for the middle class. he is, however, advocating that they expire for those who make

over $250,000. anthony is an independent caller near washington. morning. caller: good morning. i think that he should keep in the tax cuts for anyone who makes under $250,000. your last caller was complaining about 50% of the people not paying taxes. we're talking about income taxes. because everyone pays taxes. a perfect example. i went online the other day to buy a printer. i paid $22 just in taxes so everyone pays taxes. everyone will pay income -- don't pay income taxes because everybody doesn't make enough. so having enough to live off of. at one time in this countries are let's face it, people was paying 70%, 80% taxes. we were in two years for almost 10 years and gave everybody a tax cut.

that's the reason we're in the problem that we're in right now today. he has to extend those taxes, those tax cuts, because the congress held those tax -- held the unemployment insurance benefits, held them hostage two years ago. that's my comment. thank you. host: joseph on twitter says president obama is fighting to save the middle class. conservatives and republicans are worrying about the rich. tallahassee, florida, donald, democrats' line. welcome to "washington journal." caller: thank you. i agree with the person 100% -- can you hear he? host: yes, we can. caller: i agree with the 100%.ent but what we got to understand, we're dealing with a mentality that they had throughout civil war when the poor whites would kill their own brother to uphold massive money. this is what we're dealing with today. it's not going to go away.

they went to war to kill their own brothers thinking that it will one day lead them into their house. host: what does that have to do with tax cuttle? -- cuts? caller: this is what we're dealing with. i can understand, but the 47%, that don't have no money what are you fighting about? you're cutting your nose off in spite of your face. i can understand the rich wanting to keep their money. withbut the poor folks fightings man that's trying to help you. it just don't make no sense. that's why i say you're dealing with a mentality that they fight centuries. host: ok. let's hear from frank, independent caller. good morning, frank. you're on the program. caller: hi. a couple of things. why not do a special program that the became became care will

cost. host: ok. caller: are you going to do a program about that? host: we'll take it under advisement. do you have to say? caller: how much do you make a year? host: well, that's my personal information, frank. we're talking about you today and how much you think the tax cuts should be extended or not extended. caller: well, i think they should be extended for more than a year. why one year? host: so you say permanently extend them? caller: listen, they should extend all tax cuts -- obama care taxes cut in, then give us more tax cuts. those are the biggest taxes in the history of taxes. are you familiar with that? host: i haven't heard they're the biggest taxes in the history of taxes. let's look at the "the washington post." the health care law puts the i.r.s. at the front of enforcement. the supreme court decision to uphold most of president obama's health care law will come home to roost for most tax payers in

about two and a half years when they'll have to start providing proof on their tax returns that they have health insurance. that scenario puts the i.r.s. at the center of the debate, renewing questions about whether the agency is capable of policing the health care decisions of millions of people in the united states while also collecting the taxes needed to run the federal government. under the law, the i.r.s. will provide tax breaks and to help pay for health insurance and impose penalties on some people who don't buy coverage and on some business that don't offer it to employees. we're talking this morning about the president's news that he plans to announce today he'd like to see the middle class tax cuts extended. something he would push for in the past but he's renewing the push now to try to get that done before this year ends. however, he would let breaks for those making over $250,000 expire. sour next caller, a republican -- is our next caller, a republican in richmond, virginia. hi. caller: hello. i guess my basic comment is that

that would be in favor of raising taxes on everybody. if it went to reducing the debt. but it won't. if you have washington $1 in revenue, they will spend $2. i remember when the banks started paying back the tarp money and barney franks was interviewed and said, can we use that to reduce the debt? he said, no, we have other unmet needs that we have to handle. raising taxes isn't going to get rid of the debt. that's my comment. host: would you support legislation in congress if it said that the money raised from these taxes would go directly to that purpose? caller: if it would go to reducing the debt, i'd be in favor of it but i just don't think it will. host: robert gibbs, adviser to president obama, was on cnn's

"state of the union" yesterday talking about the bush era tax cuts and what the president be done about them. [video clip] >> let's look at the central plank in mitt romney's so-called economic plan. granted, most of his economic plans and most of his plans are secret. but the one thing he has flushed out is to take the bush tax cut, which disproportionately impacts millionaires and billionaires, and add to them. do you think a bush -- we're a bush tax cut away from a flourishing economy or protect and keep tax lows for middle income families? >> do you think the president will do anything other than veto a bill that would keep those bush tax cuts for everyone intact? >> we should protect the tax cuts for the middle class of the and we should let tax cuts for millionaires and billionaires expire. >> even though recovery is not that great and people say don't take money out of the economy, it's not the time for a tax hike, you would do it for those

making $250,000 and above? >> we ought to do something about this deficit. and we ought to protect middle class tax cuts. the best way to do that is let the upper end tax cuts expire, let the wealthy in this country that had been doing fine for years and years and years begin to pay their fair share. and make sure that we protect the tax rates of middle class name liz -- that middle class families have had. >> so the president is committed to getting rid of the tax cut for those making $250,000 and above? >> let's make progress on our spending by doing away with tax cuts for people that don't need them, tax cuts that haven't worked, and have them pay their fair share. >> is that a yes or a no that the president is completely committed to this he won't allow it to happen? >> he is 100% committed to it. host: robert gibbs, adviser to president obama on cnn yesterday. here are some facebook comments coming in. brian says cut taxes on all small businesses. peter says, great idea, the rich need to pay their fair share.

two opinions voiced on this c-span facebook page. charlotte, north carolina, ron on our independents line. you think about the president's call to extend tax cuts for the middle class? you so much. i think we all have to take care of ourselves. i think that's the primary thing. i think that even though the tax cuts itself have a monumental issue on both sides, i think that we're really off the focus terms of what needs to be done. and i believe that, for example, here in charlotte, we have the stimulus call what it does is it stimulates consumers, government, interact with the stimulus system. the problem is linear commerce is not reverting back through the system. so we would need more of a commerce system to do that so here in charlotte we issued the stimulus card which a person

voluntarily who gets $500 in monthly benefits, they would agree that $40 will go through an interactive database of cashback discounts and coupons and that that $40 grows by 20%, and 15 may go back to the originating government, 70% for the processing fee. so that person sensational hansed, the economy is enhanced, ben fits are good, they're able to hire, the economy gets back on track. that's what my feelings are. i think the tax cuts -- i think we need something a little bit more integral to make the biggest difference possible. i thank you for taking my call. host: thanks for calling. other stories in the news related to the presidential race. "usa today" cover story. in the presidential campaign there are two americas. one is seeing a flood of ads. and you can see those states in red. the other is not. in swing state polling, obama leads romney 47% to 45%.

in this unprecedented spending war, the president's ads seem to be working. it breaks down positive ads and negative ads that the campaigns are doing. in the past month on tv you've seen ads towards -- this is in the top battleground states. 59% said president obama they saw positive ads, 69% say negative ads. romney, 57% positive ads, 63% negative ads towards him. so we're looking at these swing states and how they're factoring in getting more of a bombardment by advertisements than the nonswing states. here's the "washington times," democrats think room in a tacks. they're targeting personal finances which the g.o.p. says is a distraction. democrats including the governor of maryland, the party's number two man in the senate and a top obama re-election strategist launched a coordinate natured attack on mitt mitt romney's finances. at issue are the governor's

offshore accounts in switzerland and elsewhere with romney critics charging that they prove he's more interested in maximizing personal profits while potentially avoiding taxes. republicans counter that the focus on mr. romney's checkbook which picked up steam after a "vanity fair" article, on the subject meant to distract from president obama's weak jobs record. romney was in new york trying to raise money there. it says he arrived around noon for the first of three major fundraisers on sunday afternoon. his motorcade of chevy suburbans a line of bentleys, porsches, and mercedes waiting for guests paying up to -- what was billed at the events at the homes of the ultrarich turned out to be an afternoon of blows.

protesters with their ban danas and occupy wall street chants, standing amid multimillion dollar mansions where live bands played "margaritaville" and donors dined on prosciutto-wrapped melon balls. helen is a democrat in atlanta, georgia, joining us now to talk about tax cuts. hi, helen. caller: hello. host: good morning. caller: good morning. host: what do you have to share about us? thing that i've seen is that there are a lot of people talking about a loot of things that don't really matter to the american people as they say it does. and i think one way that we can fix all of this is to have people pay their fair share. we can start with congress. i would like to pay the same amount of taxes that mitt romney

pays. and i would like to see congresses -- congress's salaries cut to help defray the expenses in this country. congress people should not have a career. they should run for office and leave. and we should no longer pay for their salaries. we should no longer pay for secret service. we shouldn't pay the supreme court justices for the rest of their lives. we shouldn't pay expenses to congress for the rest of their lives. that would save a lot of money. and i think it would fix the economy. it would certainly fix congress who's running around -- they set the president up. everything that he has tried to do, they have stopped it. and then they claim that he hasn't done anything. host: let's look at the headline

in cbs news. obama to push for one-year extension of bush tax cuts for the middle class. robert writes in and says, what could possibly be a better option for taxpayers than a tax cut? the stories in the news today go on to say the republicans also want to see that middle class tax cut extended, but they would like to see it extended adds well for americans making over $250,000. roy, independent caller, north carolina. welcome. you.r: thank thank you so much for c-span. i tell you, do my heart good to hear robert gibbs say what he did. i hope the president sticks by it. that was barack obama's most specific campaign promise when he ran in 2008. the rich keep saying they can't take money out of the economy. the rich's money is already taken out of the economy.

40% of the economy is the financial sector now, just like the man from charlotte said it takes it out of the linear exchange. it's disturbing, the ignorance of americans about taxes. we had a great tax reform act in 1986. it was shoved down raying raying's throat by -- ronald reagan's throat by 75% of congress it took millions off the income tax rolls but it put tens of millions on the payroll tax rolls. there are 50 different kinds of taxes. we don't even know what marginal tax rights are. a good gentleman that knew something say it used to be 70% tax on the rich. no one has ever paid 70%. they might have paid 70% of their last $1,000 and paid 10% on everything. the ignorance of the americans,

about simple tax reform, is very disturbing. that's a great idea the last lady had about congress. that we could get the expenses of the big shots down just for their fringe benefits. it would be tens of billions a year just with congress alone. host: diane writes to us on twitter -- rather, dianna, and says the president is pushing the extension for one year only. after that, look out. republicans are pushing to make it permanent. edwin says personally, i think the bush tax cuts should be allowed to run out and not be renewed. this is a political stunt for both parties, and i'm tired of the fighting over it. terry responds, sounds good to me and likes the idea that saying the tax cut is for a year for the middle class. independent line. good morning. hi, ray. are you with us?

caller: good morning. host: please go ahead. caller: thank you for take mig call. i'm a first-time caller. host: thanks for calling. caller: i want to thank you in advance for your pleasant .ersonality you're well informed as far as what is going on in this country. i think you're a very pleasant addition to c-span and the other commentators that are on c-span. as far as the tax cut is concerned, i think it should be -- should stay in effect for the year 2013 that would help. i am part of the middle class. i do not make -- you know, between me and my wife, we're living comfortably but day-by-day. do a wonderful job. keep up the good work. host: thank you, ray. i can ask you a question? you think they should be extended for more than one year or just for 2013? caller: really it would be a helpful to the united states if we would do two things. see if you agree and see if your other callers agree to this.

if we were to lower the tax rate on corporations from the current 35% to zero percent, i believe that this country could turn around its whole economy overnight. even a 25% cut, as recommended by romney, would not do anything for this country. we need a brand new start. and the brand new start with the keystone pipeline should be approved. yes, i agree with some of the republicans. i definitely agree in that respect. but the only way this country can rebound is by dropping the corporate tax to zero. i'd like to hang up. i thank you in advance for taking my call. god bless you all at c-span. host: thank you. here are some other stories in the news. "the wall street journal," threat to internet corralled. service providers gear up to aid users whose computers remain infected but disruptions are expected to be few. the malware threat to the

internet likely has been tamed. leading internet providers moved to ensure that computers infected with malware left behind by a hacking spree that started in 2007, continued to access the internet normally and expect relatively few internet users to face a disruption. since november the federal bureau of investigation has authorized the operation of servers to allow infected computers to run normally but those servers were scheduled to go offline at midnight. a couple of stories in the international news. thousands are missing from the gadhafi era. relatives are seeking to recover bodies. the story profiles a woman working to locate thousands of people who disappeared during moammar gadhafi's 42-year rule. and the u.s. policy evolving amid islamic victories. the analysis is that the u.s. has no choice but to deal with uncertain groups.

the victories of islamic parties in egypt and elsewhere have forced the u.s. to embark on an untested strategy to engage with groups that have historically been hostile to american interests according to analysts. but here's another story from "usa today". an ex-rebel alliance claims the lead in the libya vote. officials say parliamentary race is still too close to call but an alliance led by a former libyan rebel, prime minister sunday, the party's unofficial preliminary results showed it was in the lead in the country's first parliamentary elections since the out offer of moammar gadhafi. one last caller weighing in on the bush era tax cuts and whether or not those for the middle class should be extended for one year. doug, independent line, illinois. good morning. caller: i wish that they would just eliminate all the tax cuts across every tax rage, get rid of them completely that way there can be no claim of class

warfare. frankly, i'm tired of hearing about the bush tax cuts and we should never speak of them again. i would also like to make a comment about mcconnell's comments that he said job growth would help to reduce the deficit. yet his republican colleagues in the house are obstructing job growth. and also, the oil companies need to relinquish those subsidyies subsidyies -- subsidies. those applied to when barrels of oil were $50 oar less. -- or less. and they also get a huge tax rebate. so, you have to eliminate the bush tax cuts across every class range. host: thanks. t.j. writes in on twitter, if the government gets more money by way of higher taxes, they'll waste it their track record isn't good more partying to do in vegas. next we'll look at what's ahead in congress and hear more about that when niels lesniewski,

"congressional quarterly." later a look at the impact the economy is having on the u.s. real estate market with paul bishop of the national association of realtors. first this break. ♪ >> i don't mean to sound like i want to go crazy and, quote, regulate the internet. on the other hand, i don't best internet should exist as a place outside the law. >> co-executive editor of "the wall street journal"'s "all things d" on the future of

personal technology and the relationships between technology makers and the federal government tonight at 8:00 eastern on "the communicators" on c-span2. sleeve port in march -- shreveport in march, april in little rock, oklahoma city, may, wichita in june, and this past weekend in jefferson city. watch for the continuing travels of c-span's local content vehicles every month on "book tv" and "american history tv." and next month look for the history and literary culture of our next stop, louisville, kentucky, the weekend of august 4 and 5 on c-span2 and c-span23. >> "washington journal" continues. host: niels lesniewski, senior watch editor at "congressional quarterly." good morning. thanks for being with us. guest: it's good to be here. host: we've been hearing about how president obama is poised for a new fight on extending tax cuts. to announce today from the white house that he would

like to see those middle class tax cuts for those making under $250,000 extended for one year. how will congress react? guest: congress will presumably react the same way that they when the president made this push in the past. this is not a new endeavor for president obama. and the senate has held votes previously on this push for extending the tax cuts only for those with incomes of less than 50,000. the senate in fact, has also had votes on extending the tax cuts for those under $1 million, a plan pushed by new york democrat chuck schumer, and that similarly went nowhere, failed to get the 60 votes that are normally needed to overcome a filibuster in the senate. there's no reason to expect that will be any different this time. host: congress returns today after the july 4 break. we had journalists on talking about whether or not anything will actually get done this

summer before they head out for campaign season. you expect to see happen in the coming weeks? like mostestly, people, i'm not terribly optimistic. the signs are not pointing in the favor of getting a whole lot done between now and the election. certainly when they come back in september after the august break, they will have to deal with funding the government beyond september 30. the house has been working through appropriation bills. they're going to keep working through appropriation bills. but they haven't been doing that in the senate so far. and there's talk they may take one or two up before the end of september. but it doesn't look like there's going to be very much change in that regard either is we're looking forward to some sort of continuing resolution to keep the government going and probably not a whole lot else. host: talking with niels lesniewski. here are the numbers to call.

right before congress left for the july fourth recess, the supreme court upheld most of president obama's health care law. we heard outcry from republicans talking about repeals. what will we see this week? guest: this week the house will take up a bill that would repeal all of the health care components of the two pieces of policemen premeditate's health care -- president obama's health care law. that bill is expected to pass the house. and as is also to be expected, to go nowhere once it reaches the senate where, of course, majority leader harry reid and the democrats are in control. there may be a push by some to get a votecans on repeal or at least a vote on repeal of the provisions that were called into question by the supreme court about the tax

penalty. and chief justice roberts calling the mandate a tax has given some new fire to people trying to repeal that, although that similarly isn't expected to go very far in the senate. phoneset's get to the and hear what bill has to say, a democratic caller in chicago, illinois. good morning bill. caller: hey. what i can't understand is, how could the republicans want to keep tax cuts for oil companies and companies to move offshore? this doesn't make any sense at all. and romney made a lot of money with these offshore tax cuts. i think they should give companies tax cuts to stay here. how can republicans justify that? host: let's go to niels lesniewski and hear what he has to say about that. guest: well, in the next couple of weeks the senate is likely to take up a measure that would do

small market some of what you're talking about. specifically it would provide tax benefits for returning jobs, effectively returning jobs to the country that had previously been moved overseas. again, it's parted of the democrats attempting to show a contrast with governor romney. but that bill, like the tax cuts being extend from the bush era for under $250,000 is into the expected -- not expected to go very far. host: headlines from "congressional quarterly" today. health care repeal likely in the house. and below that house agenda set up for political contrasts. the house is offering a july agenda that leaders hope will demonstrate that legislative work has not ground to a pre-election halt. a message bill with no chance of

enactment. the work period begins july 11 with another vote on repealing the 2010 health care law a proposition doomed in the senate. else do we see likely to come up? guest: one of the other items that might be coming up in the next couple of weeks, in the house they're look at moving forward on appropriation bills but they're also look at -- looking forward on several regulatory overhauls, bills designed to reduce the regulatory burdens for businesses according to the house republicans. but those bills similarly have -- some of them have opposition from environmental groups and other groups that make them unlikely to advance in the senate as well. host: strasburg, pennsylvania, perry, independent caller. good morning. caller: good morning. thanks for take mig call. it seems to me it would be thoroughly irresponsible for congress to respond to the president's push for these tax cuts. after all, you don't even have a

budget which the congress, the democratic senate, has not passed a budget for how many years now? you don't know what your budget is how can you adjust the revenue coming into it? it is just politics as usual. until harry reid and the rest democrats admit that they are the ones obama is blaming, nothing is going get done until the senate pass a bill, it can't even get into congress committee. thank you for taking my call. gloip thank you. the one point that the democrats in the senate particularly budget chairman kent conrad makes about this statement about the budget -- about the senate not having passed the budget in multiple years is that debt limit law from last year did set the budget level for the next two fiscal years. so it's not entirely that there is no budget, but there is not sort of the same kind of plan

that there has traditionally been since the 1970's. asks whether budget increases are built into the continuing resolution that congress is passing. any chance we could ever see a real cut in spending? guest: the continuing resolutions generally make some adjustments to the budget levels. they don't make too many. but certainly you would not ordinarily see large spending cuts through a continuing resolution. now, one of the things that we do see sometimes with this current situation is the sequester which is scheduled to be enacted at the end of the year, which would provide automatic spending cuts of about about $1.2 trillion over 10 years, which a lot of lawmakers are trying to avoid at this point. but those cuts are coming absent action to the contrary. host: here's the explanation of the sequester from the

"christian science monitor." cuts, $6 had been hundred billion in defense, $600 billion in domestic programs that kick in starting in 2013 if lawmakers can't find comparable cuts by then. it was intended to force congress to agree on long-term did he ever sit reduction, but so far it hasn't. are you expecting to see any movement on dealing with the sequester before the lame duck session? guest: no. we really are increasingly looking like that piece of the puzzle, along with the tax rates, and perhaps the debt limit, though that could sort of slip into next year, all of those items look like they're more likely to be moving in, going forward, at least the lame duck which is setting up to be quite a show after the election, but it doesn't look like any of that will get done before then. host: debt limit, a cap congress sets on how much total debt the government can incur from borrowing, currently over $16 trillion. it was created by law in 1917

and altered 91 times since 1940s are most recently last august, also known as the debt ceiling. and this fiscal cliff. "christian science monitor" says it's it threatens to cast the u.s. back into recession. a fiscal hit up to $720 billion over time starting on january 1 next year caused by the expiration of a host of tax cuts and the on diagnose set of $1.2 trillion in spending cuts. niels lesniewski, what are you hearing from congress in terms of talks gong behind the scenes? if you're optimistic -- not optimistic anything will get done until after the elections, what's still happening at this point to lay the groundwork? guest: well, there are groups of law makers that are working somewhat behind the scenes to try and put together a plan based in part on the simpson-bowles deficit lee ducks plan that was put together by a group of insiders and outsiders,

inside and outside ever congress, led by erskine bowles and former senator allen simpson to try to come up with a deficit reduction package, also using some of the provisions from the so-called gang of six, senators. but those plans, in the past at least, have not gained the favor of leadership particularly who were not really involved in those efforts other than senate majority whip richard durbin. so that's sort of the side plan that people are working on of the but it doesn't look like that plan will be coming up right away. although in the lame duck, you know, it's a different ball game because we don't know who will control the senate really or, of course, whether or not governor romney will be the president in waiting or whether president obama will be re-elected. so it will be a lot of the cards that are played in the lame duck depend on what cards you're holding in your hand are based

on what's coming up next year. host: that ties into what joseph is asking on twitter, whether the plan is a solution to budget issues. talked about how there are discussions along those lines again. but tell us more about the details of that plan and how much traction it could get this time around when it didn't before. guest: well it beings looks like it might get some more traction, particularly when you have lawmakers who may not be around anymore, frankly, retiring lawmakers are sometimes more to vote for things that may not be politically popular. but the plan itself is a combination of discretionary and mandatory spending reductions as well as a closing of the host of tax preferences, some of which in the tax preferences, you know, that you talk about, are very popular for people. people don't necessarily like seeing these tax preferences

eliminated once they know what they actually are because they're things that they claim on their own tax returns.it is y thing to happen because you've got people who might be willing to buck the trend and but the voters perhaps. because they no longer have to worry about the voters, frankly. host: our next caller joining us from atlanta, georgia. good morning. caller: two things. it is not a tax increase if we take back the taxes that bush -- the two taxes that bush put in. it was only supposed to last for 10 years. ok? that is not an added tax.

that is just taking back some of my money which i cannot make hundreds of thousands of dollars. and giving it back to me. if they would take that money and say, i am going to build a road, is is not just the cement people, the construction people. it is the office people. if we work on our infrastructure and put our money in our country instead of everybody else's country, our people could go to work. host: let's put your question to niels lesniewski.

guest: one of the things that happened not long ago -- you brought up public works projects. the house and senate and president obama were able to come to an agreement on the transportation package that passed right before the july 4 recess on that friday. so, that a bill provides for federal funding for surface transportation projects. the construction of highways and similar infrastructure over the next couple of years. that is, in some ways, the counter to the narrative and people are trying to talk about in congress. they did reach an agreement. host: one of our tweeters ask, where does the farm bill stand? what should we know about it?

guest: the senate passed the farm bill. there are things relative to where the existing foreign policy -- a farm of policy that we had would leave us. the house agriculture committee is taking up its version of the farm bill in committee this week. it would not surprise me if somewhere in the c-span universe you could watch the market of the farm bill agricultural committee. that bill will then, at some point, reached the house floor. it is not necessarily going to be this month. there is some talk that it might to be, but it could flip until september. really the same measure. there'll be a lot of negotiating that will have to go back and

forth. host: here is a story from "cq weekly." you can see the future speaker of the house in that picture. it says he was a rare skeptic of farm subsidies. it will be fascinating to watch as the ohio republican plays a pivotal behind-the scenes role. guest: the farm of bell is a divided -- farm bill is divid

ed. some of the money is in different accounts. there is questions as to whether the agricultural appropriations bill will come to the house floor before the farm program bill. that to be something we're watching. host: niels lesniewski. let's hear from our republican line. good morning. caller: good morning. and we have a lot of fires, so there is a lot of smoke in the air. let me ask a question and i'll take my answer of the year -- off the air. i have uttered anything about waivers. having said that, i think they still exist and obamacare. whenever congress comes back into session and to talk about the house repealing the affordable health care act, are they going to address waivers? i am looking forward to them

addressing waivers in obamacare. lastly, if obamacare is such a good thing, why do waiver's exist? host: before you go, why do you think waivers are so important? caller: well, i would say it is a common-sense thing. president obama, the truck he is taking us down, he believes wholeheartedly in it. why would he grant waivers to particular unions, businesses, and corporations, if this was the answer to health care? why would waivers even exist? host: ok. guest: as far as where he stands as part of the peace, obviously the waiver provisions do exist in the law. there are waivers for minimum coverage requirements. other provisions have been granted to businesses, to labor unions and provided plans.

the bill that the house is taking up is a straight repeal of the whole lot. clearly, if you repeal the whole law, repealing the labor provisions, it all goes back and reverts to the system that we were under before the law came into affect to begin with. i do not know if there is an effort that will be made specifically to address the waiver issue in congress, at least in the near future. host: here is a commentary section in "the washington times." host: 9 let's go to the phones. ken, an independent collar.

caller: it must be difficult to work for the quarterly these days. host: why do you say that? caller: well, let me follow up. i wonder if he is free to editorialize at all? guest: we are one of the few media organizations that strides to avoid getting into the editorial comments. what i will say is that sometimes we get into situations where we will call a spade a spade. is because region and editorialize, it does not mean that we will not point out information that may be favorable to republicans are democrats. we will call the shots as we see them, but we do not editorialize specifically.

host: are you still with us? caller: i am. if i could ask a question, your free to ignore if you need to. you probably remember the comment about how the banks and run the senate. it is remarkably candid. you remember the comment and you have any comment? guest: i remember the comments. what i will say is that some of my colleagues at roll-call or all -- were all one company. some of my colleagues who do investigative work go to the annual financial disclosures and the contribution disclosures. there is a lot of money that comes in, frankly, to both congressional and presidential campaigns from people with significant stakes on wall street. host: niels lesniewski is a set

watch editor. yes concerti to roll calls congress now. we are talking about the weeks ahead in congress. oscar is a democrat in virginia. up next. good morning. caller: the greatest hoax perpetrated by the devil is proving he did not exist. the problem is not taxation and whether not you raise or lower taxes -- the purpose is to eliminate taxes. remember in the 1940's and a 1950's, the mob ran gambling, protection, and insurance. now, states have gambling. the republican party has a lot of judges. you can get credit cards and

insurance anywhere you want now. the whole deal is that we have been hoodwinked by our government. that is my contribution. i'll take any response off of the air. host: you have any response to that? guest: 01 of the things landlord and done, because covering the senate i spend a lot of time dealing with majority leader harry reid, one of the things that comes up in the context is the legalized gambling question that we have seen. there has been sort of an increase. there's a push to legalize online poker, for instance. host: a republican from pennsylvania, welcome. caller: thank you and a good morning. i would just like to say at having come from a small family business and ohio and the idea

of not allowing at least $1 million is a joke. land, business, and bring your equipment, higher people, cover everything that is involved with covering employes today, $1 million is nothing. small business is 80% of this country. it just look around ladies and gentlemen. we cannot all have a general motors and our neighborhood. host: you're talking about the proposal by some in congress, including senator schumer, to raise taxes on those making over $1 million? caller: yes. i listened for such a long time. host: that is a fair topic to talk about. let's ask niels lesniewski house small businesses and the issue

she brings of our coming into play. thank you. guest: thank you. a part of this is the way that small businesses file their tax return. sometimes this could affect people who file their tax returns as individuals for their small businesses. one thing that is important to remember is that under that proposal, a lot of the deductions would remain in affect. there are two different pieces that are going on here. on one hand, the democrats are proposing allowing tax breaks to expire. affectively, tax rates to go up for those earning over $1 million a year. the other piece is to try to eliminate some of the deductions. so, if you have equipment costs, you would still be able to deduct those if all that happens is the tax rates are extended

over $1 million. host: one of our callers said a moment -- moments ago, and there should be no tax except for businesses and corporations. a libertarian and collar up next. caller: how are you this morning? i would like to point out one thing. a lot of these people who call in and decorative fox news counties of the same people who try to shut down the c-span in the early 1980's. i think that should be thrown out of there. what we have seen take place over this country has been really tragic. it is like a deliberate attempt to destroy it this free market, capitalist society with a clause in -- quasi combination society

with this hodgepodge of philosophical governing. i wonder for you people in the media here who have watched different things here, how the partisans in the party have taken our country and is literally on the cusp of economic talks within. i would like to point out one thing real quick. i hear a lot of talk about the reagan years. it should be pointed out that during the reagan years, he double the income coming into the government. but the democrats who controlled the congress tripled of the spending. when i confronted patricia about

it, she said, we took care of social security. that is why we can up with all the extra spending. if i am not mistaken, such as security is not taking care of and we're still spending more than we are taking in. i've not seen anything changed. when will it end? host: partisanship and congress. an article talks about how congress is dealing with are not dealing with this issue. it is not as if lawmakers are u. host: can you comment for us niels lesniewski on the

perception of gridlock in congress right now and how it compares to years past? guest: as i'm sure you have probably heard, the approval rating of congress tends to hover around 10% these days. which is not an approval rating than anyone would want to. in a situation where most people like their own member in congress more than they like the institution as a whole. but it does seem, at least, that there may be of more and this may be i a misinterpretation, bt it seems that there are stunt votes where no one expects a bill to pass are no one expects an amendment to be adopted and get a hold of the vote anyway. that may be part of with the frustration is. there is a lot of time where we

can actually write stories. one of our stories about the health care overhaul, and no one expects will ever pass. that seems to have increased in frequency. >> let's hear from illinois where bill is a democrat. caller: good morning. i have two quick question -- quick, send a question. in a small-business owner. under obamacare my thing will be taxed. i have told my employees that when that tax takes a fact they will lose their job. we cannot afford that tax. we are barely getting by. number two, if you live with the tax cuts, for those making over

$1 million, it will only pay for one day of the federal government's operation. my question is, since the obamacare lawyers debated this as a tax and the supreme court ruled this is a tax, and since there is 21 new taxes in the obamacare, isn't this the largest increase in the history of the nine states? guest: i do not have the statistics to give the honest answer to the last part of your question. i actually do not have the statistics on where this ranks in tax rate changes. what i would say it is that if you are a medical device company, as you know, for the viewers who may not know, one of the provisions in the health care law is a surtax on the

manufacturers of certain medical devices. there has been an effort underway by several lawmakers in both the house and senate by both parties to reveal debt -- to repeal the particular tax provision which affects companies throughout the country and a few states, including massachusetts. host: some information from politifact.com. they have a truth meter. here is a quote from rush limbaugh. they rank it as a pants on fire. the court allowed the law to stand this and the idea that the individual mandate was a ta.

host: you can find out more about that on politifact.com. a caller from pennsylvania, good morning. caller: i want to talk about simpson bowls. i have read most of that. i agree that people should understand that there is $1.30 trillion per year of tax breaks for big business. if we got rid of that alone, we can all have a lower income tax. this has been said over and over again of 25%. also, i want to talk brought the standard deduction. i take $3,000.

that standard deduction, other than charity, should be the only deduction for anybody. it should be brought up to a decent standard of living which president obama has said is $57,000. i agree with both of those things. they're going to extend it for all these people. you know what? 50% of the people do not even owe anything on a mortgage. the only good deductions are charity and a big standard deduction that actually covers the cost of a person to have a meager standard of living. also, have you ever done any shows on the simpsons-bowles discussing it? >> we have. you can find it on our web site, c-span.org.

co-chairs of the president's deficit commission. host: you can read more about that at the tax policy center. there are one of the websites that details that plan. can you address some of the idea pennsylvania caller brought up? guest: she notes that the mortgage deduction benefits people who have mortgages. people who already pay off their mortgages alone their homes outright. people who do not own homes and all are not benefiting from the mortgage deduction. but that happens to be one of the more popular features of the

tax code, along with the charitable deduction that she mentioned. it is difficult to get into the minds of lawmakers sometimes. it seems like it to be difficult to eliminate wisdom, or a site in either direction is that mortgage deduction. there are some people who are accustomed to it that it would be -- so many people, frankly, who have mortgages who budget the size of the market today have and the amount of house the could afford based on the existence of that tax deduction. that is one of the general problems when you make changes to the tax code. there are people who have budgeted and the lives of their lives assuming the current tax policy will remain in affect. even though we know it is due to expire at some point.

host: democrats line, good morning. caller: first of all, i would like to comment on congress. if everyone were working, taxes would be paid in. there be going to medicare. money would be going to social security. everyone would benefit. you have to have taxes. even if you make $5,000 per year. on the real estate market, he would bottom out. then again, he is looking out for the rich person. why should they lose their home and then turn around and around them? second, anyone who is a mental deficit. host: we will be talking more about housing issues in about 10 minutes.

guest: i would just say in response to her comments, that interview with governor romney i believereferenced was a las vegas television program. thus, someone conscientious at the time because of nevada has had the worst luck of anybody when it comes to the real estate market. those comments were well- documented in local media when they came out there. host: niels lesniewski, one other thing congress needs to deal with is the national flood insurance program which said expires at the end of the july. guest: that issue has been addressed, surprisingly enough. what lawmakers decided to do it at the last minute before the july 4 recess was that they included the flood insurance reauthorization for five years

and pushed it into the highway bill. when the highway bill became law last week, there was also a five-year extension of the flood insurance program which carried along with the highway bill and one of the typical tricks that congress uses when they're running out of time to reauthorize something. they pushed everything together. host: our next caller is in michigan. good morning. caller: good morning. my question relates to re caller -- relates to a caller who asked her guest about editorializing. he said that his publication tries to avoid editorialists asian. his publication is not the congressional record. the congressional quarterly, along with politico is a private

organization that can editorialize whenever they want. the congressional record is the official record of the united states congress. would he care to comment and clear that up? guest: that is an accurate statement. we are a privately held company. the congressional record is the official record of proceedings. i do read the congressional record every day. it is something that viewers of c-span may be interested to know, is that when you're watching, for instance, when you watch the senate proceedings and to hear someone on the senate floor say, that you ask that the entire statement be included in the record as if it was read, when you go to look at the congressional record the next day, you will see things that you did not see on c-span actually appear in the congressional record because they are allowed to insert

content into the record as though they had said it even though they did not. host: let's get one last caller. it brews from chicago. go right ahead. caller: i was wondering where you stand in the class warfare issue that has been brought about by the democratic party. i hear all this stuff, do not tax them, do not tax me. it reminds me of ben franklin statement. the last one i would bring up is that i hope that corporations are not tax payers, their tax collectors. the taxes go to their good souls. host: are you talking about the tax cut issues or utah not politics and the democrats' attempts to bring attention to mitt romney's income taxable caller: -- taxable income.

caller: i'm talking about all the people who are successful. host: a ok. the battle over tax and glasses. guest: it will continue into november. that much, we know for sure. host: here is a deadline -- here is a headline. niels lesniewski, thank you for coming in and telling us what we will see in the weeks ahead. next, we will look at housing issues and the latest on the market with paul bishop from the national association of realtors. later on, our money series continues with a look at the u.s. electric power grid. first, this break. [captions copyright national

cable satellite corp. 2012] [captioning performed by national captioning institute] >> i do not mean to sound like a war to go crazy and regulate the internet. on the other hand, i do not believe the internet should exist as a place outside the law. >> the future of personal technology and relationships between technology makers and the federal government tonight at 8:00 eastern on c-span2. shreveport in march, april in little rock.

oklahoma city in may, wichita in june. watch for the continuing troubles of the c-span local content vehicles -- travels of the c-span local content vehicles. . >> "washington journal" continues. host: paul bishop serves as vice president of research for the national association of realtors. where is the housing market now compared to a year ago? guest: things are looking stronger. we have seen a higher level of sales. people are buying homes more than a year ago. the inventory of homes on the market is surprisingly low.

that is where we're seeing changes in prices. host: what are the challenges in buying or selling a home? guest: confidence the overall economy will continue to move forward. that is probably more an issue now given the weak recovery we are seeing. for the typical buyer, being able to get a mortgage. if you have a high credit scores, you do not have difficulty getting a mortgage. if you are not among the top in terms of your credit, you would have difficulties that would not have been a factor a few years ago. host: let's look at some statistics. in may of 2012, 4.5 5 million. guest: that speaks to the modest

recovery we are seeing in and housing market. sales are increasing. contract signings are stronger than a year ago. we are making progress. it may not be as quickly as we would like, but things are going in the right direction. host: if you would like to talk to paul bishop about housing issues, here are the numbers to call. you mentioned about getting loans. talk to us about how interest rates are affecting the market. people are drawn to the market because of the low interest rates. tell us about those issues at play. guest: in more normal circumstances when you receive mortgage rates this low, you would probably have many more people in the market.

most of us have not seen them in the 4% range in our lifetime. that would normally be a strong factor pushing the housing market forward. the 15-year rate is under 4%. the fact it is holding back the market as far as lending is that underwriting standards are extremely tight. they have been for a couple of years. for those who do not have christine credit, -- christine credit -- pristine credit, it can be very difficult to get a mortgage. if it were typical to six years ago, we can see as much as 60% more sales than we are. host: here is a headline. the long-term effects on credit

scores is feared. they tell stories about african-americans hit hard by the subprime bus. here is a chart that shows at the height of the bubble, african-americans were three times more likely than whites to get high rate mortgages. when the bubble burst, they lost a larger proportion of net worth. you can see the comparison on the high rate loans. you can see the changes in

equity and income. guest: the article paints a picture of what we do not know about the long-term ramifications of the subprime fallout. we have been concentrating on the immediate impact in terms of foreclosures. the long term ramifications we're just writing to understand. the long-term ramifications on the ability to borrow in the future, to accumulate wealth. home equity is a significant share of wealth for most households. other minority groups often have higher rate loans that were more likely to be subprime. the fallout of that is having a disproportionate effect on some homeowners and limiting their ability to purchase a home in the future. host: let's go to the phones and hear from tom in virginia on the republicans line.

caller: i am a real-estate appraiser. i have noticed some improvements in the market. what i see is a major problem is there is a great deal of market uncertainty in terms of value. neighborhoods have a widespread value. the low end of the neighborhood and height and of the neighborhood are very far apart. in the past, the neighborhood value ranges were tighter. there is a lot of market uncertainty. i find this a major issue. appraisers are in probably the most complex market we have seen in ages. light industry is being cut to the bones in terms of fees and other issues concerning new requirements from the government.

uad is one requirement with the appraisal form has become much more complex to fill out. additional requirements for the appraisaer to justify value. there was a non-scientific poll where 35% of realtors fell 35% of real-estate deals were being affected by low appraisals. i wanted to hear your thoughts. guest: he touches on a number of issues as far as appraisals are concerned. appraisals are key to the transaction going forward. the numbers mentioned, roughly 1/3 of realtors have seen at least one of their deals have some problems resulting from the appraisal. perhaps the transition was delayed or canceled because the appraisal came in lower than the sale price. there are a number of reasons

for that. it is hard to determine value now. if you are in the neighborhood that does not have a lot of transactions and some may be foreclosures, the question is what is the true value of the home because we do not have a lot to compare it to in terms of typical sales. appraisers are coming under a number of pressures regulatory and otherwise. there are additional constraints on their ability to connect appraisals. that is making their job more difficult in addition to the fact the market is so uncertain. host: george, a democratic caller from texas. caller: i am reformer real- estate agent. i am the real estate attorney and appraiser. we have seen a cycle in texas of the bursting of the real estate bubble over and over every seven to nine years.

i would like to know if you consider this a trend in the markets that there is this swell and burst. should congress intervene to take the cottage industry of loan origination and out of the hands of some brokers to try to even out the cycle? what should congress do, if anything? guest: the idea of booms and busts in the real estate cycle is probably not a good thing overall. it may be encouraging when values are rising. there is a lot of fallout when values decline. overall, it is probably a scenario to be avoided if possible. the next question is how to avoid that scenario. that is a far more difficult

question. one immediate thought is perhaps some type of regulation could be put in place. i am skeptical anything can be done at the federal or state level to offset the underlying cycle of boom and bust because i am not sure what that would look like. we do not know what the unintended consequences are. presumably, real-estate markets are winning buyer and seller come together and agreed on a price. the presumption is to get into that before you determine the boom and bust cycle. host: the last caller was from texas. what areas of the country are still struggling? guest: the best way to think about where the markets are struggling is where the economy is struggling. many areas in the midwest are still struggling to gain a

footing in terms of the economy with high unemployment rates. where we're seeing successes in the housing market are areas that are recovering from the bust of a few years ago. inventory levels are very low in some areas. those areas include places in florida and california where investors have bought a lot of the vacant and foreclosed properties. host: sue in grand lake, michigan. good morning. caller: i am in northern michigan. we have a cottage we bought the past year. we have a house down state. we bought it at the prime. we lost probably almost $100,000 on this house. are we ever going to see a recovery? i have heard it could take 30 years for this to come back. guest: that is a troubling

question for a lot of current homeowners in terms of when prices will come back to something consistent with what they have invested. each local market is different. some are exhibiting solid increases in prices. those will recover more quickly. given the sizable amount of equity that you no longer having your home because prices declined, i cannot give you a specific number of years. but it probably will be at least a few years, even assuming we have a solid recovery overall. host: republican caller, good morning. caller:, from virginia talk about appraisals and the new formula for that. what about new home construction. i do not see it being as much of

a reduction in price as resale homes. can you comment on that? guest: new construction has been weak for several years. part of that is an artifact of the weak economy and recession. another part of the for the smaller builders is that it is hard for small builders who have to depend on local or regional banks to get money to finance the projects, it is very hard for them to get loans. a lot of small builders are struggling. a lot of small builders have gone out of business. the new-home market and single- family construction is still bumping along the bottom. i am not sure what it would take

to turn that around other than a broadbased increase in jobs and the strength of the economy. that will allow more people to be out there buying homes. the number of homes on the market is low. at some point, builders are going to have to be able to build more homes because the demand will be there. how soon it happens, we have been predicting that for a couple of years. how soon it happens, we cannot say at this point. host: this says the construction industry added jobs for the first time in five months. it could rise in the coming months because builders are breaking ground on more homes and spending on commercial construction is up. economists say those are generally signs hiring will increase in the months ahead.

guest: we did see a bit of an increase in construction employment. multifamily construction has been gaining nicely. part of that is the fact that rents have been increasing. there is strong demand for apartments and other types of multifamily units. that has been increasing nicely. i will not say how long that lasts. rents are increasing. there's probably more room to run in terms of a multifamily construction. host: becky is on the line, a democratic column. caller: i would like to ask about the fraud against manufactured home owners. a lot of us were able to get a loan. what they did not tell us is the paper called the certificate of origin so we can get a decent interest loan price, when the

certificate of origin proves you own your home, when my husband died, are paid off my home in south carolina. but that paper had been shredded. my taxes are going up. i finally got mine. my dealer was still in existence. most go out of business. it is very hard to get the paperwork. i paid my house of. i cannot use it as collateral. cannot get a decent price for it. it is because of this paper. i was fraudulently led that my house was worth more than it is. i wondered what is going to be done about this kind of fraud than to thousands of people. if you owned a manufactured home, you are supposed to have

this paper. if you do not have it, you cannot approve your own your home. guest: i am not familiar with that circumstance. it sounds like a significant problem for a number of owners of manufactured homes. the best i can suggest is you follow-up and seek legal advice to see infection can be taken in fraud has taken place. i am not familiar with that issue. host: we're talking about real estate trends with paul bishop from the national association of realtors. he does analysis of real estate business and policy issues. caller: thank you for taking my call. it seems the underlying standards are higher than before.

that squeezes out a lot of people. i have bought a house two years ago, a first-time buyer. i have two kids out of college and paying back student loans. my neighborhood is pretty stable. there are still new homes to sell. my concern is as the market recovers, the appraisal values go up and sell the property taxes go up. if my property tax goes up, it will put more squeeze on my income. my income is stable, not going up. with higher property taxes, that

will make it difficult to maintain a home. i wanted to get to thoughts about that. guest: there are a number of things squeezing homeowners. you mentioned paying back student loans. that is significant for a lot of current owners and those who want to get into the market. local governments are struggling financially. they are trying to generate revenue. it is largely through property taxes at the local level to maintain services. the homeowner is squeezed in that sense as well because of the need of local governments to fund basic services. there is no real answer or solution other than if the economy generates more jobs and income increases, a lot of the proper -- problems will not go away but they will be mitigated. short of stronger economic

growth, a lot of those factors will be felt by homeowners in all parts of the country. host: this says the boom-bust cycle has more to do with the banks. guest: that was the case during the boom in 2003 to 2005. the model still used by lenders to a large degree involves mortgage brokers feeding this pipeline into the securitization process. there were incentives to generate a lot of loans and transactions to push that through the pipeline so various players in the process could generate fees. a re-evaluation of that. there are probably more regulations coming at the mortgage broker level.

hopefully we will not see a repeat. it was clear the system in place several years ago, a lot of incentives were not aligned with the best interest of homeowners. host: earl, a republican, joining us now. caller: thank you for taking my call. i hope i can get across what we're faced with in this county and state. our taxes have gone up so much. the house i live in was purchased by me in 1955. the payments, taxes, insurance, and everything in that year was somewhere around $1,000 a year. today my taxes alone is running $2,000 a year for the same home. i have very little to show what i get for my taxes.

we cannot get much service. we cannot even get the police service out here because it is not big enough and there are not enough people. things such as the comet it is all going to be in his city's -- it is all going to the inner cities. thank you for taking my call. guest: there are two reasons people own properties. surveys have been done. one is the designer -- desire to be a homeowner. the fact it is yours. you can paint however you like. furnish it. the idea of home for

nonfinancial reasons. despite what we have been through over the last few years, there are financial reasons to own property. that is more of a long-term view. it is one way many households build up 12. they remain a significant share of net worth for many households. one way to look at the market now as many homes are in place to live for lifestyle reasons that have an investment component rather than what we saw several years ago where people were focusing on the investment return rather than lifestyle reasons. over the long term, home ownership is positive for a lot of folks and they continue to want to purchase a home. host: the next caller is from illinois. caller: i am a real estate appraiser. i cover a rural area of up to 30 towns. we get together for continuing

education in large groups. we warned about the bursting of this bubble, that it cannot continue. for six years, we were screaming our heads off. there are only about 80,000 appraisers nationwide. we really have no influence. no one listened to us. all they cared about was the money to be made. if we did not fall in line, we lost our business. i held my ground. i have seen the bill from my opinion to another until they got the one they wanted. the burst was no surprise to me at all. i was going to comment on the new regulations they have this under. they are so cumbersome. they changed the reporting format. they cannot understand what

we're doing. the regulations are so tight the we go to the board and we cannot even send it through the system if it sees one error. we're working in a rural area. it may not show up as the government thinks it should. it does not come up with the postal addresses recognized. it slows things down for months. fannie mae has many new rules. just to break-even, we need to double our prices. that is where i wanted to state my opinion. they only gave us a few months to implement something that should have taken years. host: let's get a response from paul bishop. guest: we hear from many appraisers those same things. the intent of the regulations may have been good to begin with

to make sure the appraisal process remains the best estimate of value for home transactions. we want accurate appraisals under any circumstance. i think some regulations came in quickly and perhaps were not completely well fought out in terms of compliance. many appraisers are raising the same concerns as this caller. host: when you hear from appraisers who have experience and say "i saw the dangers." how do you reflect on that? where can they go to send warning signals in the future? guest: in addition to appraisers, there were a lot of other people involved in the real estate process raising concerns several years ago about the likelihood of a bubble and crash.

i think a lot of people's warnings were not heard because of the momentum in the system, the desire to have more transactions in the pipeline. lending standards were reduced. at one point, virtually anyone could get a loan. we need to watch a lot of the indicators to make sure we do not repeat that history again. there is also the consumer financial protection bureau now in place to give consumers a better sense of what is required in terms of buying property. hopefully there are new things that will prevent -- that will make the next bubble less destructive. host: we are talking a real estate trends and the u.s. economy. our next caller is jenny on the independents' line from california. caller: thank you for your

program. i have an infinite number of questions. i will try to limit it. in my particular niche where i live, they are starting to flip real estate again. i am in a bedroom i am in a little bedroom community in san diego. .ome of close to 255 it is very concerning. as a realtor yourself -- i can see where appraisers are going crazy. still, my question -- my particular area -- i note you don't have a crystal ball -- are we bottoming out? the economy and jobs seem to be

picking up. a lot of my friends are getting jobs, a lot are seeing an opportunity to switch to a better job. you read about shadow inventory. i want to know, how can i figure out if this is just a false reality, and that there is shattered inventory being held -- shadow inventory being held 3 8 million shadow, 4.5 million on the market, who knows how many underwater? my thing is, look, how do we figure out where we are with this so that some can get back into the market that are not investors? i'm talking about the numbers that i quoted you, between 200 and 400. we are close to the beach, with the perfect weather.

unheard of to touch anything in my area between 400 and 500. guest: there are a lot of areas in the country where there are not a lot of markets, and flippers can come in and resell house very quickly. the real way to alleviate that from becoming a problem is it more properties are available on the market, speeding up the process by which banks are able to let those properties come to market. related to that is the whole idea of a shot of inventory -- that is, how many homes are yet to come on to the market because there -- bank are in some stage of a foreclosure. there is no specific definition of what the shadow inventory is. a lot of people made estimates on what they think it is.

some very modest, some other very high numbers. a couple indicators point to positive direction of shadow inventory is that people's, the falling behind less frequently than their mortgages. that is one thing point to some improvement in the shadow inventory, whatever that number might be. host: cindy asks on twitter -- guest: 1/3 are fully paid for with no mortgage. about 50 million homeowners have a mortgage. line inul, democrats' nebraska. caller: i have one kind of a simple question. back when the real-estate bubble burst, and homes were sky high

and going sky-higher, and they are going that way now -- if you stand back in the crowd and you see it, you can see that those sums are going for way more than what they are worth. why aren't real estate agents telling people that the homes are not worth that much? when the housing bubble burst, did they tell people that you couldn't afford at home -- that home? there were people taking 50% of their paycheck -- not 10 or 20%, like they were supposed to, but 50% of their income and putting it in house payments. why weren't they and held culpable? host: do you own your home? caller: yes, i do.

host: were you caught up in that situation -- caller: no, i am smart, unlike some people. host: he blames the real estate agents of the people who were responsible for buying and selling homes facilitating purchases. where is the responsibility? guest: there is no homebuyer who went to closing without their mortgage financing in place already. they had to be approved for mortgage at some point along the line. homeowners and home buyers have to be aware of what they can afford. at the same time, underwriting standards generally were released for a period of time. -- underwriting standards generally were really loose for a period of time. a series of regulations, one of which from the dodd-frank financial reform bill, as to do with something called a qualified mortgage. it basically means that lenders

are required to verify that the borrower as the ability to repay their mortgage. that is expected to becoming around some time towards the end of the year, when the regulations will be finalized. host: story we mentioned earlier in "the washington post." "civil-rights groups fear the new financial segregation." here is what "the washington post" said happened. "industry groups cited low credit scores as one of the black consumers were denied loans at higher rates than whites."

i am reading from a story on the front page of "the washington post" today. guest: one of the things that article points out is that there was fraud in many cases, in terms of making sure that a particular borrowers qualify for a loan by changing information on the loan application or changing the income, as this

points out. there is no reason to overlook fraud under any circumstances, and we can only hope that a new situation in terms of mortgage lending standards comes around and will prevent that even more. host: georgia, richard, independent caller. you are up. caller: first of all, in order to buy a home, you have to have a job. the public sector is showing unemployment of 4.6%. the private sector is closer to 20%. college graduates, 53% either cannot find jobs or are under- employed. the housing market collapse was basically the fault of government involvement, mostly congress, with their policies of

trying the community reinvestment act and stuff like that. also, pushing the federal reserve to keep interest rates low, pumping key money into financial institutions, where you had to much money chasing too few products. the third thing i would like to say is that obamacare has two taxes on it, from what i understand. one of them are mortgage taxes, 1.4% obtaining a mortgage. another was when you sold your house, a tax of 3.4%. guest: the tax rate that it caller refers to is part of the health-care legislation, but it is for more complicated than the caller suggests. it is attacks among high-income

earners only -- a tax hike- income earners only. it is above and, at a certain it is aboveit i -- income at a certain level. it is not directed only at housing. it is a very complicated tax, but it falls on a very small segment of the population and is designed to fund some of the. -- someo f the health care overhaul. i'm not a tax expert, but if someone thinks the bank might face that tax, they me to see a tax adviser. host: the caller also brought up a correlation between people who cannot find jobs and being unable to find a home.

tell us how you see the real estate market intersecting with how the economy's doing. guest: economy is moving forward, just not as fast as everybody would like. last unemployment report found that there was only 80,000 jobs created. we need stronger growth in terms of jobs. that does two things for the housing market when we see job growth. another factor is what it does to consumer confidence overall. even though i may have to drop, if i see the economy struggling -- i may haev a job, if i see the economy struggling, i may be more willing to turn up as a home buyer. if the economy starts moving forward more quickly, hopefully the housing market will fall in step as well.

line,democrats' dayton, ohio. caller: you off not mention anything about reverse mortgages. -- you have not mentioned anything about reverse mortgages. please discuss that. host: what you think about it? caller: it is necessary for more information to be put out here. there's a lot of retired military in the neighborhood where i am. i wanted to also bring up the point i wish the gentleman had mentioned to the widow that in ohio, she can go to the courthouse. i am in ohio, so i had to do this when my husband died. i would appreciate if you could talk about the pros and cons of reverse mortgages. we have all the advertisements on tv. i'm not harmed by it, but a lot

of my neighbors are thinking about it, because there are a lot of widows and widowers. guest: reverse mortgages are probably a good option for a lot people, but they are really very specific to your own particular financial situation, your tax situation it is something you need more about -- host: what does it mean, for our viewers? guest: you draw down the equity for a long period of time and use that as income for deferred living expenses. you take it off the mortgage and use it as income going forward. there are a lot of factors that underlined whether i.t. has a good option for you personally. i cannot make broad statements about the present bonds -- about the pros and cons.

you need to find out more information supplied to you specifically. host: robin is our last caller, alexandria, virginia, republican. caller: i am an attorney who is represented people who have had trouble with purchase contracts and things like that. one of the things i want to ask about is the incentives are not aligned between the real realtor and teh buyer. i'm wondering whether the national association is looking at ways to align those incentives. normally, under the law, just the term "agent" has a legal meaning and duties associated with my experience with the way it the numbers work is tehe

agent's incentive is to maximize the buy price. guest: the caller raises the question we effort freely about the incentives in the real estate transaction. the vast majority of real estate agents get the majority of their business from deferrals and past business. if the buyer in this case field they were served well by the realtor, they will be recommended going forward. the caller raises some questions about incentives and 1 cents in once -- incentives in one sense. there is incentive to make sure the transaction goes through and the transaction as possible, since that is a source of future business. in that sense, the incentives are aligned in a positive way

for the buyers. host: paul bishop of the national association of realtors, thank you. coming up next, it is time for our "your money" segment. we will be looking at the power grid with matthew wald of "the new york times." we will be right back. >> i don't mean to sound like i want to go crazy and "reregulated the internet." on the other hand, i don't think the internet should exist outside the law.

ho >> walt mossberg on technology and the government. tonight at 8:00 eastern on " the communicator's" on c-span2. oklahoma city in, which upon in june, this past weekend in jefferson city. watch for the consuming travel of the c-span local content vehicles every month, booktv and american history tv. next month, watch for the history and literary culture of brown next stop, louisville, kentucky, on c-span2 and 3. >> "washington journal" continues. host: every monday morning, we look at your money. here to talk about the electric power grid is matthew wald,

energy reporter for "the new york times." thanks for coming in. guest: thanks, libby. host: when we talk about the power grid, explain what makes that up, what we are referring to. guest: the north american continent is divided into three grades. at the utility's connect themselves to each other in the 1960's and 1970's for the purpose of reliability and trading energy 11 at a cheaper supplied and the other. at his about 132,000 circuit miles -- it is about 132,000 circuit miles. it doesn't really do what we wanted to do now, because we have moved to a more deregulated system or anybody can build a generating system or when formed it -- or windfarm. host: we hear about the smart

grid and upgrading to smartrip technology. what does that mean? guest: it is a lot of loose terms good one is a meter it you will have in our home that could very the price by the hour. it would also let the utility know if you had service or not. if you did not pay your bills, the utility could turn your service off without being promis -- outlaying foot in your promises. host: as we look at this map of the united states and see the transmission grid, courtesy of fema, we see complex colors and a lot of routes. you say there are three main grids overall. what was the dvision of

marginally? was there any thought given to the future and what it would look like today? guest: there was a lot of thought given, but not to the future we have now. the future we have now in most states is an auction system where, every day, buyers and sellers come together and agree on who is going to generate electricity. it used to be that your favorite monolithic utility would be soup to nuts. now you have one party generated and a different party transmitting and a different party delivering your house and billing for it. nobody build it with this in mind. we have had trouble adapting it to that purpose. host: the system serves all the lower 48 states, accepting what he and alaska -- guest: well, it is not actually our grid.

host: that is an important distinction. guest: there is an eastern in a et offtion, texas is s by itself. host: 10,000 generating units. tens of thousands of miles of transmission and distribution lines. if you would like to join the conversation talking about the u.s. electric power grid and how tax money is spent -- how does private industry and the federal government work together on the grid? guest: the grid was mostly built by private companies. at this point, it is attitude by

private companies and regional transmission organizations, which decide where they need a new line. the federal government decides somewhat how it is paid for, and the government has made little investments here and there. generally it is of private enterprise. by and large, this is a heavily regulated by private industry -- but private industry. host: regulating the grid -- how does it work? guest: the commission issues rules of the road. it has been really challenged barrett the enron situation years ago when enron corner the market and played games with electricity rates by booking transmission space it did not actually used, creating a scarcity and raking in lots of money -- the commission was slow

to pick up on that. right now, the big issue for ferc is how to build a bridge for renewable energy. the problem with the renewal energy is that you do not choose where to build. you have to go to where the wind is. if we switch over to renewables, it implies we after of a much bigger grid and their arguments about who will pay for that. some companies on the grid will generate less. it is a lot like a highway that might bypass downtown or a small town. some people wanted, some people don't want it. some people think it brings in commerce. there's a lot of factors deciding what to build and not to build.

guest: those are actually two different issues. there is a trend recently in the grid to switch from alternating current to direct current, which is better for long-distance transmission. some of the stuff goes underground, but it is expensive and generally not necessary. he may be referring adds much to the high voltage grid -- not so much to the high-voltage grid but to the low voltage lines. host: "the baltimore sun" -- "in a crisis, they get grumbles and questions about why power lines are still overhead, but as soon as the lights come back on, the grumbles go away.

we should not let them off so easy this time." are we talking about local issues versus the larger grid? guest: we talking mostly about his condition, which is different from the high voltage agreed. the federal government does not really regulate distribution. the state's due to some extent, and they will order companies to do tree trimming. if they trim more trees, we are going to pay for it. the other thing is that the public wants cheap rates. they will sell you whatever you want, but they wanwant you to pay for it. host: new jersey,. caller: you touched a little bit on the question i had. i was hoping if you explain the energy deregulation we are having in new jersey, and a couple of other states have a

it. these companies are calling and asking me to switch, telling me that the major utilities i am used to is still going to do what they are going to do, but somehow i will get lower rates. it is really confusing. i have no idea what to choose. i am collecting rate information, but i'm afraid of pulling the trigger to switching. guest: it is very confusing, and to my mind, somewhat useless. it resembles what used to happen with telephones. you work with at&t and then you pick your long-distance carrier. nobody is going to put in a different meter and then come in and read it. it is still in new jersey whoever your current provider is. but the wholesale business of

buying those electrons and getting them to you will go through the same physical means, but somebody else is going to buy them in bulk and sell them to you. at your local utility will bill you for it. the line crews will come in and t.x it i it becomes a marketing gambit. they will offer you a frequent flier miles, a fixed rate for certain numbers of months or years, which might be a good deal. on the other hand, rates have gone down and you might get locked into a higher rate. it will not make a whole lot of difference to you sign up with. host: gary, republican caller. caller: hi. i wanted to ask the speaker about the effects of emp on the entire power grid, what it would do.

i don't want the speaker to hold back at all on the explanation of exactly what that means to every individual in this country, how devastating it would be and how it would be generated -- how easily could be generated. host: electromagnetic -- guest: i am not going to hold back. i'm not sure you are correct. a nuclearexplode an bomb, some of the energy is released as a pulse. you get large burst of energy that find their way into the grid, and they can overlook transformers and make them ov erheat aned burn. transformers are very large and it takes a long time buy one, etc. the theory is that the polls would cause a widespread blackout and take a long time to recover from.

gary, if you recall the major averages, the utilities are very relieved. we left tens of millions of people in the dark, but we did not damage the system so it was back together in a few hours. that with thes electronic polls -- with the electromagnetic pulse, it would be a few months or years. there are recent studies by well respected national organizations that say that the transformers are not all that vulnerable, especially the younger transformers. although i.t. is a scary idea, there's not a lot behind it. host: let's talk about cyber security, and the potential for someone, some roker, to attack the u.s. -- some rogue group,

attack the u.s. by the power grid. group? -- rogue group? it could be just a lone hacker. the operation of the grid itself is increasingly computerized. there are links among the operators, and it is crucial that those things stay intact. libby, as you said, there is a lot of operators on the grid -- big ones, small ones, companies with huge i.t. departments, other is that just got their first computer and it is running and fine, thanks very much. there is worry that someone would act into the we -- hack into the weak link and cause problems. the stuxnet virus, which it is now clear that the united states intended to hit the iranians,

turned up in some nuclear plants in ohio, although not the ones that run the system. the nuclear reactors being built in south carolina and georgia had extensive defenses against cyberattack. it is not clear if the whole industry has this defense. host: a story by bloomberg. "energy companies, including utilities to have to increase their investment in computer security more than sevenfold to reach an ideal level of protection, are growing to a survey done by bloomberg government." guest: i don't think they spent a whole lot on this now. host: richard in wisconsin, welcome. caller: yes. i don't even know what to think -- guest: lights are out.

caller: on c-span, they had roscoe bartlett, our congressmen -- i think he is from maryland. on c-span, people can see the presentation put on by scientists, with roscoe bartlett. they were begging members of congress to come back to washington to solve the problem, because they could solve it -- i cannot remember for sure, but i think it was $350 million. what they are talking about is -- guest: you are talking about emp, right? caller: within two to three years, we could be affected by solar flares of the sun that could take out 3/4 of the people in the united states. host: are you talking about electromagnetic pulses? caller: that is correct, and talking about the

electromagnetic pulse. guest: in 1989, the sun, which works on an elephant-year cycle, was going through -- and 11-year cycle, was going through a particularly active period. protons are charged particles and it hit the magnetic belts and pushed it a little bit. this is a little geeky what kind of interesting. if it moves through the earth's cross, you have a magnetic field going through a conductor for electricity. you get these in the dirt -- well, actually come in rocket the currents flow into the power system. you have power outages. the province of quebec is particularly vulnerable.

there is a group of engineers with an organization chosen by the federal government to write standards and force them that says yes, i guess the problem, but not a doomsday scenario. it could cause problems but we don't really know the full system. host: chris is a republican caller from new york state. caller: may be a bit biased -- i work for utility. to my mind, deregulation is not

necessarily going to work in this industry. it is inherently a monopoly. you have the same folks producing and transporting it and on the distribution side. all we've done is bring those three entities out. -- break those three entities up and bring in power brokers. deregulationhow can actually lower the cost and it is the same folks -- guest: it is a good question. it does work. the question is, does it work better than what we have before? the utilities put all the rest on the customers and set the bill -- set out to bill some

stations that were not needed. now on the generating side, the utilities sold off generators, but the new generators tend to be built by private companies. they sell in a competitive market. the business of deregulation can be divided into two tiers. the first, the generation side, has shown more promise than the second tier, although, chris, i agree with you, you pick your poison here. host: let's look at what kind of money is spent on the electrical grid. we see money coming in from ag department for upgrades in ora

rural areas. there is also money for private investment, $5.5 billion, and $61 billion from investor-owned utilities for power lines. guest: the stimulus money -- they were looking for bugs that could be done quickly and generate employment. i don't know how much employment would be generated. if you need something to read the meter every month, it will come in by radio. there were projects on the books that could be found quickly, and that is what made it attractive to the obama administration. transmission spending is a tiny fraction of our total electrab -- electric bill. often there is a general way off on one side that could sell the power cheaply, but you end up buying from somebody local that is more expensive, because the

lines are not there in between. those extra costs run into the billions and billions of dollars a year. if you baltimore transmission, you could -- if you build more transmission, you could cut into those electric rates. think of it like the convenience store instead of the big box. he doesn't want a new power line build, and nobody wants one through their own neighborhood. there is a political logjam getting economically rational investments made. host: scott in idaho, democrat'' line. caller: i have a comment and question. the centralized grid would use an enormous amount of power due to the existence of the lines and the atmosphere by local company says it takes 100 watts to bring one watt to my town 75

miles away. it is tremendously and efficient -- inefficient. any large contractor apportions 10% or so of their profits to maintaining the grid. to what extent is the u.s. taxpayer asked to contribute to and maintain and subsidize the power grid, just like we are asked to subsidize the gas expense at the pump with the taxes we pay? guest: i will tell you a secret about the difference between taxpayers and rate payers, which is there isn't any. i pay for electricity in everything i buy. there is some subsidy in the

stimulus act. most of it is paid by ratepayer s, but i don't think there is a huge difference. i don't think your local utilities losing 99% of the energy in the grid. if you take coal or natural gas and turn it into electricity, you lose some of the energy and conversion and lose a little bit in shipping it. the grid has some aspects were you this energy, but it has some aspects where you are highly efficient. suppose, for example, in your town, in idaho, it is cold in is winter, and yojrour peak on a winter day and you are connected to phoenix. do you have enough generation to meet your worst day in the

winter and for phoenix to meet its worst day in the summer, or do you want in line that connects it where you can share the assets you both need but not at the same time? host: question on twitter. guest: well, one thing to understand is, especially with the weather we've been having recently, most consumers pay a certain price per kilowatt hour,, but the price did utility -- price to the utility varies. if the price reflected the actual cost, he would -- you run the dishwasher when you went to bed at instead of at 5:00 p.m.

he would do your laundry on the weekend instead of the peak hour. right now, some of it runs all the time, others only a few hours a year. the system would be more efficient -- i am talking about dollar efficiency here. a myth to bust -- the idea that we can do away with the grid because we are going to renewables. in fact, renewables will require a stronger grid. wind is so variable that what you really need -- you don't want to be connected to a wind farm, because you will have electricity at some of ours and not others. solr -- is somewhat -- solar is

somewhat similar. you need it diverse resources that are not connected. host: matthew wald has been in the d.c. bureau since 1995 and with "the new york times" for 35 years. guest: so long i am starting to lie about it. host: sorry we outed you. steven is up next caller in florida. we're talking about the u.s. power grid. caller: matt, i'd like you to comment on the overall efficiency of even the smart grid. it is worse with a grid that is not a smart grid. if you look at one of the major intended uses of the grid,

namely, charging the batteries of electric cars, you have the following -- half of our electricity is currently produced by burning coal. this is not something that can change any time soon. the objective, of course, is to save oil, an economically and financially, that is an important objective. for every unit of energy put into the battery of an electric car at the time it is charge, you have to produce 14 units of energy by burning coal. guest: well, yes and no. by the way, if weak end up with a lot of electric cars, it is conceivable we will use a little more call because it will be more use for the power plants.

natural gas is so cheap right now that i don't know how long that will go on. we'll look at these things by their energy balance, by how much -- we don't look at these things by their energy balance, by how much we deliver to the customer. we look at it by money balance. how much will it cost me to drive 100 miles? if you can do it by burning a huge pile of coal, or natural gas -- that does not come in piles -- but it cheaper fuel, dyou don't care? much what the energy balance is. there are inefficiencies with the internal combustion engine. depending on the kind of driving you do, the electric car may be more efficient, because it is not sitting at the red light burning energy. host: steve, republicans in nebraska. caller: thank you for c-span.

i was just wondering about the outlook for employment in utility linesmen, and would you have any problem trying to persuade your child into a profession of, you know, the grid work or what have you? host: is that your line of work, steve? caller: no, i have a son coming out of the army in a little while, and i've been trying to persuade him to pick up utility linesman for some time. he is somewhat interested. i'm just not sure how aggressive i should get in persuading him, if that would be a good profession to pick. guest: the energy department says that the cohort of people working in the utility business now is demographically and

balance. they are baby boomer types, and a whole bunch of them will retire in the coming years. don't go into reading meters -- there is no future in it. but there is technical and quasi-technical implement word there will be turned over in the years to come. host: tell us why it reading meters has no future. guest: eventually your meter will talk electronically to the utility. you don't have to hire a guy with a car to drive from place to place. you don't have to make house calls anymore. another reason it is economically viable is we don't have this now in many places, but the country may move to a system where you get billed for energy during the time of day. it may change hour by hour. you may end up with appliances

that and talk to the meter. your clothes dryer will sit there until it falls below a certain level and then it will run. it may wait until night to run. that is automation of a kind that will do away with the guy with the clipboard walking from house to house. host: greg, independent caller bank in florida. caller: mr. wald, i'm going to -- thanks for you, my reference is a "nova" episode. natel ewis -- nate lewis from caltech takes the sunlight and

it breaks the threshold of hydrogen, so it releases. ok, the second part, a professor from the university of delaware. through nature's wonders, he found that he could take a cheap substance like chicken feathers, heating them in a closed environment, and exposing the nanoreceptor sites inside chicken feathers, 6 billion pounds of them. guest: i hadn't heard of that one. caller: it makes the hydrogen able to kept -- to be kept it atmospheric pressure. connect the dots -- host: how do you connect the dots? what does it all mean? this "nova" series you are

referencing is about making stuff cleaner. caller: he is talking about the power grid i'm talking about just in your backyard using technology that is available today to act like convert sunlight to hydrogen. host: ok, let's leave it there. guest: you latch onto one key issue of renewables, which is that if you don't have a storage, you have a problem. agreed, in fact, is a form of storage. -- the grid, in fact, is a form of storage. you can reduce the burning of coal and natural gas. if you have solar at one place, you can do the same. you cannot do that in a single location if you are off the grid unless you have batteries. what greg is talking about is using sunlight to split the

water molecule, h2o, into h and o, and at some point combining those things to get the water back. the problem is that hydrogen is the smallest atom there is and it is very difficult to store. i had not heard about the chicken others. i am certain it is not a commercial idea at this point. it may become a commercial idea. if you do all those things, i suspect you still want to have a grid, suspect you still want to prepare yourself for times when the sun was in fighting -- wasn't shining for several days at a time but i suspect you would be more reliable if your water splitter broke down and you would not have to sit in the dark until somebody came to fix it. the grid reliability is not perfect but it is better than any in the house.

line, goodrats' morning. caller: until we have, let me say, a nasa program in a home generation -- i am in oklahoma, i've read who runs a freezer and blower and heating units for free of one solar panel and a battery backup. $1,500. he save that much money in a couple of years. until we go to a system where we can generate at home and get the billionaires out of making money off everyone, we will go nowhere. guest: i think you have hit on a difference between politics and engineering. we have this fascination with the decentralization, do it

yourself, every man a king, my house is my castle, i will cut myself off of these evil corporations. the flip side is that we have engineering questions that work better on a big scale than a small scale. a big grin is more reliable than a small grid. that is why we have big grids. there are publicly held companies which you and i probably have in our 401k plans. it would be sensible not to mix the emotional feeling, i am going to do it myself, i'm going to go alone, grow my own vegetables and make my own electricity, with the engineering question. actually doubt that in oklahoma you can run your engineering system on the $1,500 system. you need something much larger with more storage, and there are cheaper ways to do it and doing it yourself. there are things i don't do my

self. i don't do my own and dentistry. there are things i am content to rely on others to do. some of the things i would like to be involved with, but i don't aspire to do it myself. host: this is our regular "your money" segment where we look at how your tax dollars are spent. we're looking at the power grid and how much rate payers pay, how much the taxpayer pays. victoria received checks from the electric company. guest: victoria, i am happy to say that you helped to pay for your friend's solar panels. she probably has a net metering system, which ms. it is not like she's sitting there with a little switch, but her panels are part of the grid, they feed

the grid and her house. the excess goes to the grid. in the hours when the sun is not china, most of them, -- not shining, most of them, it goes to the grid. victoria, that made your rates higher. the more utility you share with her, the more your rates are going up. this may be a cheap way to avoid having to improve the distribution network, it may clean up the air, it may be a temporary subsidy to help incubate and industry, but you are paying for it. host: mark in philadelphia, republican caller. caller: good morning. i appreciate knowing that your specialty has been at the

nuclear area. my concern, and many people's concern, about the nuclear power plants is the redundant systems in place are not redundant enough. they are very dependent on electricity to produce the fuel or whatever to deliver the diesel for the backup generators and cooling systems. if you would please address that and he's right about this, because this is an issue -- and please write about this, because this is an issue. the sunspot activity was extremely high the past week. i'm originally from missouri, and we never got over 100 degrees until the last couple of weeks in august. they have had 100 degrees from june on, i think it is related to the sunspot activity. guest: mark, i would be careful

about mixing two different ideas here. if sunspot activity aside, it means the density of protons is higher. that is not making us hotter on earth. it would be washington, where i live -- we have a warming trend in the climate, but i don't think i guess sunspot activity. -- don't think it is sunspot activity. what happened at fukushima daiichi in march of last year is that their diesel generators broke down, were swamped by the tsunami, electrical connections were swamped by the tsunami, and without electricity, they cannot tell what was going on in the reactor and could not keep cooling water on. that would be a problem if you had a blackout at an american plant. i have to thank muhammad attah

at the 9/11 crew -- saying this facetiously, but one of the things they did after september 11 is bring in portable energy storage devices, which might be in the form of batteries, compressed air tanks. they bring in hoses, diesel pumps, and create a station to operate in a blackout. the fukushima daiichi parliamentary commission that reported last week said that it fukushima had those preparations, which we took for terrorism, not a tsunami, they might have avoided much of the damage of the accident. that is not to say that our nuclear plants or in a vulnerable, but the ability to operate and see if the shutdown and maintain the plant after a blackout is a lot better than it was. you are raising the idea of what happens if the grid disappears

for months or years, and no, we're not prepared to deal with that. but this is i scare a scenario that may not be justified. host: shreveport, louisiana. caller: good morning to you, sir and madam. my question is for the gentleman, mr. wald. are you aware of efforts public or private to handle the smart grid against back-and-forth transactions with electric cars, hybrids, or other large storage reforms that will be populating the market? guest: well, general motors was helpful on this when they came out with the volt. they ended up with a little time on it that looks like what i have on my lawn sprinkler that sets it to charge at