play a bit later in the cycle, -- ballistic submarines, which come into play a bit later in the cycle, the conversation has not been concluded as to whether the navy will be able to successfully move those into a defense-wide account or move them into the shipbuilding budget. at least the information that i've seen suggests that it will stay in the navy's accounts that will create deep pressure there on other aspects of navy ship building, and just using rough, historical guides. usually those programs will be cut in size. so there's preferences here favoring reductions in the sizes of the nuclear force. there's complexity in how the bomber fits into that. they don't want a new bomber, but there's also budget realities that are also in play which suggests this will be tough to manage over the next decade. again for detail on that, take a look atstimson's other report.

>> understanding the comprehensiveness of the budget report. >> we've not addressed what other countries spend, if that's what you're asking. >> there is a part of the poll which people were given information about what the united states spends as a whole. >> i was wondering if you guys provide information and address the subject that u.s. spending in other countries were cut rate reduction. >> not as a stand alone question, no. >> you seem very confident that

we're heading towards a period of decline in defense spending, and yet we have a presidential candidate, mitt romney running very close to the president in recent polls saying he will reverse obama error cuts. and on top of that -- i'm wondering if you could talk more about the politics of the situation and what makes you so confident that we are heading towards decline. >> i'm not making such a prediction. i mean, the capacity of government to act in ways that are at odds with public opinion is well known. it's more when they look at the big picture they come to that

conclusion. it does create a political environment where the public is really quite recentive to cutting defense. and they're going to be increasing pressures, budge tear pressures. not just from this study, but from the earlier study where they were presented the entire discretion anywhere budget and allowed to make their own budget. the defense constituted about half of all the cuts. so given we'll have these political pressures towards cutting, there is a reception. nobody likes cutting anything, you know? it's not that their eager for it. but when the pressure's there, that's where it comes out.

now, i'm not making a prediction of exactly what the outcome will be, only that you've got the conditions that make it viable. >> i don't think of myself as so much making a prediction as just an observation. it's july, we're well into the 13 appropriationses cycle and we don't yet have a proposal from any of the budge tear relevant actors that would increase the budget. if it is enacted it's a real cut. that's the high end of the spectrum. unless something changes, then fiscal 2013 will be lower than fiscal 2012. that's just an observation. another observation, rom knit

did so relatively firmly as part of the primary. the primary is over, and already you see language changes within his camp about how that would be implemented, how quickly, things of that nature. all of it has the effect of softening the position. he's going to campaign on it, he's got to find a way to accomplish and challenge the president. he certainly seems to be emphasizing it differently during the primary session. and then, the last observation is that these pressures aren't going away regardless of who's president. when you challenge those pressures, there's a number of ways that you can overcome them, but it's very difficult to do it without everybody being on the table. including national defense. you're still talking about a

fifth of your total budget and half of discretionary budget. whether it's obama or romney, that fact isn't going anywhere. >> the only thing i would say, romney's not the only actor as my colleagues have pointed out. even if he wants to increase the defense budget, he's not the zar, he's part of a complicated political dynamic in washington. the senate will definitely have different ideas. democrats will have different ideas. so what comes out at the end. and more over, defense spending is regarded as a competitor for social spending in the current budget dynamic. that competition was not going to disbeer. the desire to cut the deficit is not going to disappear. so what romney says is not, i don't should be taken as a

predictor of an outcome, of a specific outcome. at best it's going to change the current dynamic. if he gets elected it will change the current dynamic because you'll have one player in the system espousing a different point in the view than any other are expressing now. except for maybe the chairman of the house armed services committee, basically. pretty much alone in washington now as an important player who wants to increase the defense budget. >> picking up on the complicated political dynamic, could you talk about what you're going to be looking for as the house considers the political 2013 spending bill, specific weapons system, augmentation to budget and accounts and proposals to

cuts? and also, could you give us a sense not only of your opinion, but also how do you think it's going to turn out this year? a prediction. >> i do not have a prediction. i will again share some thoughts on it. when it comes to the house propeses bill on the defense coming to the floor this week, especially watching any particular programs, there's a problem. and that is the appropriation is consistent with the budget committee, but not consistent with the budget control act which is a -- neither is the administration's request. nor i believe the senate position. but something's got to change. in other words, congress is going to have to amend the budget control act, or all of

these positions are in excess of what is presently allowed. and so i see this as part of the election site. the house taking out a position, house leadership is taking out a position. they feel comfortable campaigning on. and they'll do so. the election will be contested and some people will win and some people will lose. and after that, everyone's going to have to come back to washington and deal with the fact that either significant piece of legislation gets amended to permit them to have a conversation they're presently having, or that defense appropriations conversation just changes. i don't think i would hazard a guess on how that plays out. certainly possible that you can see both. as for se quest ration, again an observation. a previous report out where they

looked at where it was a risk. if memory serves me correctly, on three of those occasions it was just dismissed, an act of congress decided not to do that. and one of them it was financial accounting error that turned out not to be a problem. and then another was cut down enormously upon its implementation. so that should factor in, sequester isment to be an incentive for tough decision making. at the same time it's an act of congress, congress can act again. they tend to do so when these things come up. my expectation is not that there will be a sequester of defense costing $55 million on january 2

of 2013. i expected that something will happen in that lame duck session that will change those terms so that defense may be continued to cut, but certainly not at that level of suddenness. >> i was just wondering if replaced based on party registration or basically looking at where they line in the district, and if that's trudeau you think that can skew some of the analysis, the results of this? or is that because you're merely looking at districts as a whole, not party lines. >> in the first part where we were breaking up republicans and democrats that's based on what people say, what party do you

associate yourself with. for the red blue district analysis, it was driven entirely by where they live and who are the current member of congress in their district. so it's pretty simple. pretty straight forward. >> so they weren't necessarily the registered party members. just when you chose the respond yents and they identified themselves -- >> as republican or democrat. we had information about where they lived. >> i'm told if defense cuts are implemented that they would go to the way that you mentioned. >> well, because of the way the system works, the chance that the cuts will be made only in places that would be identified

by waste, as some independent group sitting on the outside, are slim. i mean, i think there's a sense of warfare that takes place among interested parties in decline. and the best team will be the one whose program survives. i mean, best in terms of the strongest team. not best in the terms of necessarily what's good for national security. so i'm kind of pessimistic about the shwred es cuts will be made. but they're as riveted by disagreement, rivalry and contractor pressure as people are on the hill.

so, the system rarely produces perfect outcomes. >> we appreciate everybody coming out today. >> a copy of the full report if you would like them. >> there has been a hostility to poverty! lyndon johnson was the best president and looked at poverty issues and spent money on it and talked about his social service program. lyndon johnson. that's followed by, i hate to say it, richard nixon is actually the father of minority business. inside the small business administration, and use the term economic justice. richard nixon. economic justice. >> the former president of bennett college for women regularly writes and comments on politics, education and african-american economic history. and live, sunday, august 5 at

noon eastern, your questions, calls, emails and tweets for the author. august, on c-span 2's book tv. >> in a few moments, democratic senator patty murray on what it might take to reach a deal in congress on taxes, spending and the debt. "washington journal"'s live at 7:00 eastern and will talk about the 2012 campaign. what's made in the u.s.a. and entrepreneurship. >> several live events to tell you about this morning. federal reserve ben bernanke presents his monetary policy report to congress. at 10:00 a.m. eastern here on c-span. also at 10:00, on c-span 3, the senate energy committee looks at the electric grid's

vulnerableability to cyberattack. >> if i'm president, job one for me will be creating jobs. let me say that again. my agenda is not to put in place a series of policies that get me a lot of attention and applause. my policy will be number one create jobs for the american people. i do not have a hidden agenda. and if you want a president that will make things better in the african-american community, you're looking at it. take a look. >> mitt romney and vice president joe biden spoke at the naacp convention. >> just close your eyes and imagine. just imagine what the romney justice department will look like. imagine what his senior advisor

of constitutional issues is robert work. imagine the recommendations for who is likely to be picked as attorney general as head of civil rights division, or those other incredibly important positions of justice. >> watch their entire speeches online at the c-span video library. senator patty murray and other democrats say they're willing to allow sequesteration take place in january if republicans do not agree to a deficit deal that includes significant deficit revenue.

>> so, we're very pleased to be doing that. here's a brief overview of the event. i'm going to begin with a brief introduction of senator murray. then the senator will give her a talk, i'll ask her a question, and the audience will have a chance to ask her one, if we're lucky two questions. we'll vote to a distinguished panel that i'll introduce at the appropriate time and the audience will have much more time to ask questions of the able. let me say that the talk will be about the slope, or cliff, or whatever you want to call it. so just in case there night be one or two people that don't know what it is, it includes the bush tax cuts, unemployment compensation extension, includes the payroll tax holiday, includes a $1.2 billion

sequester and a number of other items. many of you are probably familiar with the expression in washington that i don't have a dog in this fight. there's nobody in washington that doesn't have a dog in this fight, so this is a really big deal. and senator murray will tell you the rest. senator murray. [cheers and applause] >> thank you so much for this introduction. i'm so glad to be here with you today. i want to thank the budgetting for national priorities project at brookings for hosting us here today. as well as the great members of the panel that you're going to be hearing from shortly, and all of you for taking time to be a part of this discussion. as all of you know, last august i was asked by majority leader reid to co chair the joint select committee on deficit reduction or the super committee as it was commonly called.

this certainly wasn't the most sought after job in congress, as you may imagine. it was probably just a notch below the chair at the f.c.c. but i agreed to do it because i thought it represented a few important opportunities. , the opportunity to avoid the pain of sequesteration that would be triggered if no deal was made of course. to pass a responsible, long term deficit reduction plan with a simple majority. guaranteed both in the house, after years of partisan rank or culminating in a truly ugly and absolutely unnecessary debt ceiling battle, the opportunity to finally show the american people their government wasn't broken, and that we could come together when we needed to. well, if as everyone in this room knows the supercommittee

was not successful and we couldn't come to a bipartisan deal. the reasons for that, the lessons learned from those four months of intense bipartisan talks are absolutely critical as we face those exact same issues heading into the end of the year and the so called fiscal cliff. because if we want a different outcome, if we want to come together around a balanced and bipartisan deficit reduction deal, the american people expect and deserve, something is going to have to change. so today i want to talk about the vision, values and priorities that drive my approach to tackling our budget challenges. i'm going to contrast that with what i see as the short-sided and deeply flawed vision that has been dominating the republican party. i will run through how these contrasting visions played out and the specifics of the supercommittee negotiations, and

the recent budget debates. and then i will lay out how i see a path forward as we now head towards the end of this year. now, my approach this issue starts with my own family. it starts with a story that probably isn't so different from stories told across the country. i was born and raised in a small town in washington in a big, loving family. my dad ran a five and 10 cent store on main street and everybody in our family helped out in the store. my family was certainly not rich. but we never felt deprived in any way. but, when i turned 15, things started to change. my dad, who was a world war ii veteran was diagnosed with multiple skero kiss. in a few short years his illness got so bad he couldn't work any more.

my mom, who had stayed home to raise a family had to take care of him but she also needed a job so she could support our family. she found some work but it didn't pay enough. without warning, my family had fallen on hard times. but thankfully, we lived in a country where the government didn't just say tough luck. my dad was a veteran, so he got some help from the v.a. for some of his medical care. for self months my family had to rely on food stamps. it wasn't much, but it put food on the table. so we could get by. to get a better paying job, my mom needed some training. fortunately, at the time there was a federal program that helped her attend lake washington vocational school where she got a two-year degree in accounting and eventually a better job. and my brothers and sisters and i were all able to go to college

through federal grants and student loans. like millions of americans we got by with a little bit of luck. we pulled through with a lot of hard work. while i would like to say that we were strong enough to make it on our own, i don't think that's really true. i know that the support we got from our government was the difference between seven kids who might not have graduated from high school or college, and the seven adults that we have come to be. all college graduates, all working hard, all paying taxes, and all now giving back to our own community. so, this is the primary prysm that i view our nation's budget through. it's what guides me, working with the senate to impact the choices that we make. not the government can or should

solve every problem. but we are a nation that has always come together to stand with families like mine. to invest in our people, in our communities, in our future. and to build the most robust middle class world's ever seen. that a budget is not just numbers on a page, but despite what you might think if you listened into some of the debates we've been having recently, not just a synonym for deficit reduction, that this is not just about charts and grafts and projections that we often hear about, though those are important too. but a budget tells a story of what kind of nation we are. and the kind of nation we want to be. and that it is a statement of our values and our priorities and our vision, or at least that's what it ought to be. these ideas led to some very clear goals as i went into the super committee.

first, i thought everything needed to be on the table when we started. this didn't mean members were supposed to check their values at the door, but it did mean we have the best chance of success if members can rule out any changes to entire swaths of federal budget before we even began. second, i felt very strongly that any deal has to be balanced and include both spending cuts and new revenue. the middle class and vulnerable americans have already sacrificed so much. they've lost their homes, they've lost their jobs, they've lost their life savings. and they should not be called onto continue to bear the burden of deficit reduction alone. third, i want to make sure we didn't neglect the very real need to tackle our deficit and debt, causes us to cut out the most critical investments in our

family and future that has made america great. fourth, i wanted to do a big deal. a grand bargain. i was willing to consider a small deal to avoid the pain of sequesteration, but i thought it should be a last result. i wanted us to put, truly put our country on track to tackle the debt and deficit. not simply continue lurching from crisis to crisis. and i was willing to make the tough compromises that were required to get there. their parties have been dominated by a party that allows themselves to only think in terms of cutting and shrinking and eliminating and never in terms of investing or growing or

fairness. they have a vision for our country in which families like mine would not have gotten a hand-up. we would have been left fend for ourselveses. a vision best articulated by one of their idea logical leaders grover nor quist who said i'm not in favor of abolishing the government, i just want to shrink down to is size where we can drown it in the bath tub. he told reporters that he doesn't do budgets. well, he has a pledge from almost every single republican member of congress to never, under any circumstances, raise taxes by even a penny. despite the fact that the wealthiest americans are paying the lowest rates in generations. despite the fact that the wealthiest americans are today

paying the lowest race in generations and the federal government is taking in the lowest level of revenue in decades. unfortunately for our committee, republicans have latched onto this deeply damaging eye concern ideology. they pay lip service. but what they seem to be concerned about is cutting taxes for the rich and starving programs that help middle class programs and the most vulnerable americans. if republicans really thought the deficit was the most pressing issue, you wouldn't have seen their presidential nominees say he would reject a deal to cut $10 in spending for every one dollar in tax increases. you wouldn't have seen them do everything possible to protect the bush tax cuts for the rich. you would have seen far more interest among their leaders in congress in compromising with democrats to get the grand

bargain that everyone in this room understands we need. you would not see their single-minded focus on non-discretionary spending which only makes up 16% of the budget and provides critical support for our families and investments in our future. so, it was with very different visions and priorities that the two sides came together in our super committee last year. i under stood it would be difficult. but i knew democrats were ready to compromise and open to the concessions, a balanced and bipartisan deal would require. and i was hopeful that the republicans were as well. the first day that the supercommittee met as a group, we went around the table and we each talked about what we wanted to accomplish. we shared some coffee and runny

eggs. and our hopes for the coming months, democrats discussed our priorities, and our willingness to put everything on the table to get a balanced deal. we discussed our desire to continue working to cut spending responsiblely. we talked about our willing bs to tackle entitlements and make sure they were strength nds in a way that would be there for our children and our grabbed children. we highlighted the need to responsiblely reduce defense spending while making sure that our national security needs were addressed. we laid out or belief that in a fragile economy with millions of americans out of work, it made sense to invest in the short term while putting our nation on a path to long-term debt and deficit reduction. and of course, we talked about the need for a balanced approach

that included revenue. republicans opened in a very different way. one said that defense cuts were off the table, and indicated that instead of trying to go big, the group should focus on doing just the opposite. he wanted us to go small. republicans pushed for us to focus on the so-called low-hanging fruit from prior negotiations before working on any of the tougher issues. meaning that they wanted to start by locking in and agreeing to all of the spending cuts that were identified as potentially working in a larger deal, but none of the revenue increases that would have actually made such a deal possible. this was a tactic that we had seen before. and of course we were not going to agree to an approach that would lead to an all cut, unbalanced deal. so it wasn't a great start, but my hope was that this was just a negotiating position, not a hard line.

we continued our bipartisan conversations. we traded offers and ideas. we had our staff draft and analyze potential language. there were times when i thought we were very close. but looking back at the offers from the other sides that represented the greatest attempts at compromise, it's clear that while we were close on the spending side, republicans hasn't even left their corner when it came to revenue. the biggest offer democrats put forward was an attempt at a grabbed bargain. this was an additional $1.3 trillion in cuts to spending and changes to entitlement programs, as well as $1.3 trillion in new revenue. and it included a short-term investment and jobs to give our economy a much needed boost. to be honest, it was a painful

offer. it included things that i personally wasn't comfortable with. it had deep concessions on the spending side. but i knew that the only way a deal was possible was that if both sides were willing to accepted some pain and i was willing to do that for a balanced and fair deal. but, our balanced proposal stood in sharp contrast to the offer republicans would hang their hats on when it call ended. this was their attempt at acting like they were putting revenue on the table and offering a compromise. while in fact it was doing the exact opposite. the plan was small. it included about $700 billion in spending cuts, which is less than what the democrats had offered. around $300 billion in new government fees, and $300 billion in what they were

calling new revenue. it's important to note that many of those numbers were fuzzy. unclear as to how they would actually score all that. but i want to impact that last number a little bit because the republicans were trying to do here is not unique to the plan. we had seen this over and over in their budget proposals. the plan would permanently cut the top tax rate for the wealthiest americans for the 35% of it now and scheduled to increase to 39.6 on january 1, down to 28% which would add trillions more to the deficits. gets even worse. the tomby plan claims that lost revenue would be offset by closing loophopes and ending reductions. further, there would be $3 billion extra in revenue once this was all said and done. while the plan is explicit giving the rich the biggest tax

cut since the great depression, it is painfully vague when it comes to where that revenue is going to be found to offset that. in fact it ignored that part completely. it simply assumes congress will be able to get that done through tax reform. well, there was some analysis done on a proposal that was similar to that, and what they found was in order to pay for the tax cut, for the rich, we would have had to flash to the bone the personally and dependent exceptions, almost all itemized reductions, including the most popular ones, we all know. home mortgages, charitable donations, state and local taxes, college tuition tax credit. almost every other tax credit. so to spell out the obvious, under the plan, the richest americans would get a huge tax cut while the middle class would lose the tax benefits that mattered to them the most.

in an analysis of a similar plan, it was estimated that someone making over one million dollars a year would see an average tax cut of over $31,700. in fact, anyone making over $200,000 would get a tax cut. but for anyone making less than that? the middle class, the poor, the cuts and rates didn't make up for the exceptions and reductions lost. for example, someone earning $55,000 would see an average increase of almost a thousand dollars. so not only is it deeply unfair to ask the middle class, to put the bill for another deficit-busting tax cut for the rich, but the plan would lock them in with no guarantees that the revenue would ever be found to pay for them. there's nothing responsible about that in my book. in fact, i find it offensive.

i was reminded of the plan when i saw the ryan budget this year. ryan's budget cuts taxes for the rich even deeper than the other. down to a top rate of 25%. and uses the same parlor tricks to raise revenue. ryan however needed congressional budget office to score his plan as the deficit reducer, not the deficit buster that it actually was. so he simply directed the c.b.o. to score his plan, assuming it would raise 19% of g.d.p. well, that's quite an assumption. wish we could solve all our problems like that. they slammed ryan's tax plan, writing he offers only the sugar of rate reductions without telling us what the medicine of base broadening will be. and i should add, republican presidential nominee mitt romney's plan does similar, it cuts rates for the rich while

refusing to name what deductions would be close to pay for it. so the plan was a gimmick. it was a bait and switch. it was not a step in our direction, it was a leap towards the tea party. democrats were willing to match the republicans dollar for dollar on the spending side and more. we went even beyond the plan when it came to tackling entitlement. we had backing from our leadership and our party to make a big deal. we jumped right into the middle of the ring. but republicans refused to move an inch in our direction on revenue. they actually tried to use them to cut taxes for the rich even further. and they were so focused on how their extreme base would react they simply could not summon the will to leaf their partisan corner. why is this? why is the modern republican

party so opposed to allowing the rich to pay just a little bit more in taxes to help solve the debt and deficit problems of this country. that they would prefer no deal at all? after all, it wasn't always this way. president reagan raised taxes 11 times. president george h.w. bush famously raised taxes to reign in the deficit. this really shouldn't be controversial and outside of today's republican party, it isn't. because if you believe that the deficit and debt aren't major problems that need to be addressed, as democrats do and as republicans claim to, then you can't simply ignore revenues at a time when at 15.4% of g.d.p. they are the lowest in 60 years. poll after poll has shown the american people overwhelmingly want to reduce the deficit with a combination of cuts and revenues. every bipartisan group were able

to come together because their plans were balanced. and let's be clear, we don't want to increase revenue for the sake of increasing revenue. of course not. but as a nation? we need to pay for the servicable programs the american people want. we need to reign in the deficit and debt. and we need to do it in a responsible way. democrats understand this and congressional republicans should too. because all of this is coming to a head once again. unlike last year, it can start immediately. millions of jobs could be lost through the automatic cuts. programs that families depend on would be flashed irresponsiblely across the board, and middle class tax cuts would expire. and once again if republicans won't work with us on a balanced approach, we are not going to get a deal.

because i feel very strongly that we simply cannot allow middle class families in the most vulnerable americans to bear this burden alone. it is just not fair. so if we can't get a good deal, a balanced deal that calls on the wealthy to pay their fair share, then i will absolutely continue this debate in to 2013, rather than lock in a long term deal this year to throw middle class families under the bus. and i think my party and the american people will support that. i hope it doesn't come to that. i think we have some good reasons to think a deal can happen before the end of this year. i know democrats are willing to compromise. we just need a partner. thankfully i'm seeing seop encouraging signs from republicans who are sick and tired of being boxed in by the most extreme elements of their base, who don't like being responsible for continued manufactured crisis that hurt our economy and destroy our nation's faith in this

government and who are concerned about the impact of sequesteration. in the privacy of back rooms and in small games, republicans are far more willing to discuss the need for revenue. and there are some republicans passionate about national defense and willing to make some tough choices on revenue to protect the pentagon. in fact, some of the productive conversations that my republican colleagues have been having have led nor quist to drive their impure thoughts when it comes to taxes. well, i hope these impure thoughts continue. if nor quist is mad, and i mean that in the angry sense of that word -- [laughter] then we must be on the right track. because the only way we can get a deal is if responsible republicans can persuade their leadership to stand up to the most extreme elements of their base and come to the table with real compromises. i also think many republicans

are starting to realize something very important. on january 1, if we have not gotten a deal, grover norquist and his pledge are no longer relevant to this conversation. a name that i heard repeatedly by republicans over and over again in the supercommittee will no longer be a part of this debate. we will have a new fiscal and political reality. if the bush tax cuts expire, every proposal will be a tax cut proposal. and the pledge will no longer keep reason cannes boxed in. if middle class families see money coming out of their paychecks next year, are republicans really going to stand up and fight for new tax cuts for the rich? are they going to continue opposing the democrats middle class tax cut once the slate is wiped clean? i think they know that would be an untenable situation. i hope this pushes them to come to the table with real revenue

now before being forced to the table if we don't get to a deal by the new year. because we really shouldn't wait. it's not good for the economy or the markets, and most importantly not good for our taxpayers and small businesses across america. so when it comes to the expiring bush tax cuts i agree with president obama. let's extend them to the 98% of workers and small business owners, democrats and republicans agree, should have their tax cuts. they didn't have a real debate about the tax cuts, the wealthiest americans that we disagree on. before august, we are going to have a vote to do that exactly in the senate. i challenge them to do some thing different and allow everyone to clearly state their position on this issue. i challenge them to offer an

amendment to our middle class tax cut that would simply extend the tax cuts they're fighting for, the tax cuts for the rich. not a political amendment offered simply to give their members a way out of voting against the middle class tax cuts. a real amendment. if they do this, all of the bush tax cuts would be up for a clean, honest extension vote and the american people would know where everyone stands. any senator who supports extending tax cuts to the middle class can vote for our bill. any senator who supports extending tax cuts for the rich can vote for the republican amendment. and any senator who supports extending for all the tax cuts can vote for both. that would give everyone the opportunity to vote exactly for what they want and make sure the political gimmicks don't get in the way of delivering results for the 98% of workers both sides agree should have their tax cuts expanded. if the republicans don't do

this, if they continue playing political games with this vote and only offer an amendment to kill this bill, then they will have proven they don't care about certainly, they care about extending those tax cuts for the rich, and they will use every bit of leverage they have to do it. if we are really going to address these issues, we have to cut through the political smoke screen. it's time to put our card on the table, offer real choices, and have a debate that is worthy of the senate. holding the middle class tax cuts hostage may be a smart tax move if the goal is to protect the rich. but it's not good policy or politics. you know, i've always heard the claim made that we need to extend all the tax cuts to give us time to reform the tax code.

we absolutely need to reform the tax code. it is badly broken and i'm certainly willing to discuss the fast track process for getting that done. but there's absolutely no reason, not one, that we need to extend them as a precondition for reforming the tax code. and when we do get to work on this, republicans are going to have to accepted that tax reform is not going to be a backdoor way for them to sneak through more tax cuts for the rich and is going to have to raise revenue to help reign in the debt. now, in addition to the expiration of the bush tax cuts we also face a $1. trillion in automatic spending cuts. you all remember sequesteration was included in the act to give both sides an incentive to compromise. but republicans weren't willing to offer any concessions to get

to a deal. now they want to have their cake and eat it too. if democrats were willing to accept a wildly imbalanced deficit reduction plan to avoid the automatic press, we would have done that back in the supercommittee. we didn't then, we will not now. so anyone who tells you that sequesteration will simply disappear because both sides want to avoid it is srmly fooling themselves, or trying to fool you. it will have to be replaced and that will have o be a balanced plan. we are also not going to allow just the defense cuts to be replaced without addressing the domestic spending cuts that would be devastating to the middle class. none of the automatic cuts are good policy. they were packaged together in a bipartisan fashion to get both sides to the table. and they will be replaced or not as a package. here in d.c., the defense cuts

get most of the attention, but across america, all the automatic cuts would be deeply damaging to our families and our communities. that is exactly why i've been working across the aisle with senator mccain on legislation calling for an analysis of the impact of sequesteration across both and nondefense spending. i'm hopeful that that information will help us bring the same spirit of bipartisanship to a balanced and bipartisan approach to replace those automatic cuts. because once again i will not agree to a deal that throws middle class families to bear this burden alone. lls republicans end their commitment to protecting the rich above all else, our country is going to have to face the consequences of republicans. this is about more than tackling our debt and deficit. this is about our nation. we cannot ignore this great

challenge. we need to reign in our deth. our budget and our nation will be defined by the scientists who come out of our schools, but the businesses that we create, by our communities, our universities, our research, our development, our invasion. we will be defined by the opportunities we -- by the fair ness of our society and how we treat the most vulnerable among us. when i go back home to washington state, they don't come up and say they want the federal government to spend 18% of g.d.p. they tell me they want a strong school system for their kids. they want them to go to college if they want to. they want good jobs in their communities. they want their government to be there for them when they need support getting back on their feet.

in other words, they want government to do what it did for my family. what it's done for millions of families for generations. they do want us to tackle our debt and deficit. they certainly don't want us to hand bills to our kids. but they want it done in a balanced and fairway. that doesn't leave the middle class holding the bag alone. those are the priorities that i will be pushing for when we vote on the tax cuts next week, and in the weeks and months and years ahead. i believe they reflect the american values that are carried our nation forward for generations, and the vision that will continue our great nation's leadership into the 21st century and beyond. i know that democrats are ready to go to work. we want to make a deal, we are ready to compromise. i'm personally willing to talk to anyone from either party who wants to solve this problem. and as soon as republicans decide to work with us, i'm

confident we can get to a balanced and bipartisan feel that the american people expect and deserve. thank you. >> senator. i don't think anyone will accuse you of a lack of clarity. you say democrats are ready to deal, can you tell us what specific entitlements would be changed and how? and how you think they would support it. >> well, in fact as i indicated on the supercommittee, democrats did put a package forward that did include changes to entitlements to ensure they were there beyond one generation. i have a granddaughter, i don't just want medicare to be there for my daughter, i want it to be there for my granddaughter.

i understand that and is willing to make decisions and make sure we have long term security for medicare and medicaid and our entitlement programs. and that's because the republicans wouldn't put any revenue on the table to help meet that deal. >> now we have time for one or two audience questions, not statements, questions. make them clear question and short. yes, over here. here's a mike right here. pasta pass it down. we're lucky nobody grabbed it. >> well my question, basic question is wouldn't it make the negotiations a lot easier going big in the grand bargain if there were some more money to work with right now that could be generated without any increase in the national debt?

now, in one minute flat i can sharpen up that question to be as precise as i think it should be -- >> well, just get to the essence of it. >> is that all right? >> not a minute, no. >> give us the essence of it. >> the essence of it is as many must know during the 1930's, there were many prominent economists who argued that to fight the great depression, we should reintroduce the lincoln error greenbacks. greenbacks are means of exchange which do not increase the national debt at all. it's a complicated subject with a lot of history. been many times in place where our paper standard, greenbacks have been used very successfully. and with very limited inflation. in fact, one case, the least level inflation for a period of

52 years. a lot more i could say, but it was a major debate, a grand debate if you will of the 30's, and my question is shouldn't we be reopening that grand debate as well? >> well, fortunately we're at the brookings institute and you have a wonderful panel of experts that will address that better than i. but i will tell you this, everyone wants a magic answer. everyone wants a miracle to occur. everyone wants to pull something that looks good, sounds good, but in reality c.b.o. doesn't score it as something that will reduce our debt and deficit. we have to come forward with a plan that will reduce our debt and deficit. the democrats on the committee did that, but where we didn't get any compromise was on revenue on the table. >> right here, quickly. >> thank you senator, good to see you again. my question is the issue of jobs

and outsourcing. if you remember when i lived in seattle, it was during the clinton administration that there was a proposal that was passed. that still continues where they're outsourcing of jobs and has not changed, and both houses whether you're democrats or republicans, have endorsed this and continue with the outsourcing of jobs which eliminates jobs in this country. what do you think, or what position do you take. how will this change the economy, will it create jobs in america if we eliminate them because it is very important in terms of the loss of jobs for americans here that are going overseas for a lower salary and organization production. >> well, we're not here today to debate trade policy, but i can tell you that every democrat strongly believes that we should be making things here in this country and creating jobs, and showing the world we can be strong in the future. that takes a lot more than trade agreements. it takes training and education

for our work force. it means making sure our people have the skills we need to manufacture and build in this country. i can tell you standing here, if all of our deficit and debt reduction comes out of that small portion of the budget, 16%, and eliminates education and training, we will not be able to manufacture and build things here in this country. >> senator, thank you -- >> i know we're out of time. i do just want to say this, to all your audience. i believe we can get a good deal. i believe it will take leadership, it will take compromise. there are good people working at this at every level. and i am again willing to work with anyone who comes to the table and will bring real revenue and a balanced approach to solve this really important generational challenge for our country. >> senator, thank you very much. >> thank you. [cheers and applause] >> the senate energy committee this morning is looking at the

electric rates with vulnerablity to cyberattacks. you can see that lye. in a few moments, today's headlines and calls live on "washington journal." at 10:00 eastern, federal reserve chairman ben ber new york yankee iowa presents -- he's before the senate banking committee. >> in about 45 minutes, bloomberg news staff writer lisa l ithe issue of bain capital and the 2012 campaign. at 8:30 eastern, what is made in at 8:30 eastern, what is made in the