a member of the appropriations and budget committee, discusses the so- called fiscal cliff. and representative rick larsen talks about his bill to help voters with their id on election day. at 9:15, the director of the tax policy center and who pays federal taxes. host: good morning. you are watching c-span "washington journal." gop vice presidential nominee

paul ryan returns to capitol hill today to cast his vote as members consider legislation that would block president obama's welfare law changes. this morning we will be talking about the economy. 51% of americans polled said the economy is getting better. we thought we would turn it into a quantitative discussion with you. how would you have answered the question? is the economy recovering? tell us yes or no and why or why not. you can also post on facebook. send us a tweet or an email. and a dead thursday morning to you.

there are some many ways that the economy is pulling out in the political campaign. but mr. by showing you this new nbc news washington journal poll that has been making news this week. here is the wednesday coverage of it. uptick and eight, -- optimism on the economy. there is the uptick. we have lots of headlines to assure you. to demonstrate how important those in washington think the economy is, with the commission on presidential debates announced their topics, and we have the news release here. let me show you if we can get in real close.

three-quarters of the debate will be specifically on the economy underscoring the importance. as we get into the discussion with you on this polling question, at do you think the economy is recovering, they also did a focus group. here is a question he asked people what they think is most important in the election. >> when it comes are down to it, this election was really about -- >> the economy. >> health care. >> the economy. >> health care. what's the economy. >> the economy. >> economics.

>> the economy. host: you can see among those people participating, most of them have the economy on their mind. if you had taken part of the national survey of 900 voters and ask the question "do you think the economy is recovering ," would you have been part of the 51% that said yes? let's begin with robert. caller: good morning. this is only the third time i have called. i have always wished i could get you on the line. it seems like you are not there that often. this is a special call for me. in terms of the economy and if i think it is recovering, i think it is recovering. i wish we would -- we always

talk about this. i do not want to get in the whole thing about mitt romney's comments about the 47%, when you talk about entitlements, why does it have to be about the poor. i do not consider myself corp. why would you say entitlements' means them when it could mean a special tax breaks for super wealthy people? also if the 47% that pay little to no taxes, mitt romney if he paid 14% or 13%, that is kind of close to zero. that is not a long way from not paying taxes. this term about entitlements -- the economy is recovering. we need to define what everybody means by entitlements. i think all kinds of people are entitled to all kinds of stuff.

i think they could include everybody. host: let me interrupt you. give us a piece of evidence why you think it is recovering. caller: i think it is recovering and one quick way because the teachers went back to work at enter chicago. because the auto industry is no. 1 in the world again and many have paid back their loans. believe it or not, it is a shame that gas prices are at the ridiculous prices. but oil companies are making bazillions of dollars. the fat cats are getting more fat. host: thank you for your call. steven is an independent. do you think the economy is recovering? why or why not? caller: good morning. thank you for having me.

i appreciate c-span. i do think the economy is recovering slowly. i am or the about the petrodollars and how countries like india is starting to trade with iran and not using american currency. i was wondering if you could speak on that a little bit. host: thank you for your call. thomas henderson tweets this. next is a phone call. good morning charlene, you are on. caller: thank you for taking my call. the question is, is the recovery in the air. yes, i think there is recovery in the air. i do want to make a distinction. african americans are definitely still out of the job recovery.

there are still no jobs for african americans. nobody is talking about it. nobody is doing anything about it in terms of leaders, elected officials. president obama has done a lot for the immigrant population. he has done a lot for other populations, and specifically african americans here in the country. i am little bit disturbed by it. i know people who are working that have master's degrees and a ph.d. is, they are not making as much as their counterparts who have just basilar degrees and high-school diplomas. that is a disgrace. -- bachelor degrees and high- school diplomas. host: i would point to this article today.

there is more on the wall street journal if that topic interests you. let me show you a few more results. this is available on-line. as i mentioned, they have quite a number of economic questions. we tell do the first one we are using our question on this morning. related to that, a very specific one, will the economy get better in the next 12 months? this showed an uptick of 6%. 42% now say the economy will get better in the next 12 months.

that came from a group of people earlier said they would stay the same. they are now more optimistic by 6%. more economic data from nbc and the wall street journal. we are using one of their questions. tell us why you do or do not think the economy is recovering. caller: thank you for having me on this morning. i absolutely do agree that the economy is recovering, although it is a little bit slow. that is due to the republicans blocking president obama for anything he passes. if the republicans are not going to give this man anything that he needs for us americans to recover, then shame on them. they are americans, too.

i do not get it. i understand it is all about politics. in 2008, a lot of people said this, there is no way that no one president will be able to turn to run this economy the way it was left for us. now, the republicans because they want to win office, they do not want to help president obama do anything. it is a total failure from star one. then again, the recovery is slow, but it is gradually getting there. and four more years, hopefully we can have unity in the house once again. host: thank you, joseph. jan on twitter --

the housing market is getting stronger, at two reports indicate. new construction and sales rise. kathy reporting for the newspaper. the u.s. housing market, existing home sales increased 7.8% to a seasonally adjusted annual rate of 4.8 2 million in august, and the national median home price rose on a year-over- year basis for the sixth month in a row. next is a call from maine. this is leslie the republican. caller: i think the economy is going down. i blame the last three

presidents. especially president clinton. things are getting worse and worse and more expenve. on top of that, they still bring in 1.6 million legal immigrants, plus they did not want to close the borders. pat buchanan is right. things are bad. host: next is a call from colorado. this is a democrat. you are on the air. caller: i think the economy is doing great. according to the model that republicans set, wall street is doing great. a foster it is doing great and it has recovered higher than it has in the last 13 years, then the economy is recovering. all of that money that people make on wall street will trickle down. the only thing that is not doing great is the republicans voted against veterans again when they did not support

funding for the jobs bill yesterday. host: thank you. we will show you a story about that in a minute. the amish are you "the wall street journal" this morning.

we have some local newspapers, arizona on our cable this morning. we are showing you the local reporting on these census bureau numbers that the wall street journal of debt. next up is ron who is a democrat. caller: i would have to say the economy is improving over what it has been the past three years. i live in an area that is high tourist vacation area. three years ago you almost could close down the street and everything. this past summer was a boom. i have never seen so many people coming into the area. the town i live in is approximately 1400 people year around. in the summer time it goes up to 30,000. every year, this particular one

we have just seen a huge increase in people taking vacations that are interested in coming into the area. through no help of the republican congress, we are doing much better. thank you. good morning. host: thank you for calling in. stephen on torture says this -- -- stephen on twitter says this -- let's look at a few more members from the poll. this is a question commonly asked in a way to understand the mood of the electorate. do you think you are better off or worse off than four years ago? 38% are saying they are better off. in august that was 31%. worse off is 41%. that is statistically unchanged

since august. in the same place, that is where the 6% came from. asking you whether or not you think the economy is recovering, next up is a call from indiana. this is paul who is a republican. caller: good morning. i am glad to have taken my call. on the economy, how are we going to say we are better off if ben bernanke starts printing money to the tune of $40 billion a month? that will drive the value of our currency down the toilet. anybody with a little common sense would know it. another thing that is really bugging me. every time i hear a democrat call and, the only rich people in this country are republicans. do you know something, i appeal

-- host: thank you. law street journal this morning highlights global central banks has they say flexing their muscles. japan follows europe and u.s.. right along side that. we are asking you, do you think the economy is recovering?

tell us why or why not. next is a call from oklahoma. jerry is an independent. caller: good morning. you are the fine wine of cable days. the economy is not improving. i think the economy is like an illusion right now just like it was during clinton's tech bubble. the figures are pretty bad. manufacturing is down. i would like to use an example of up here in miami, okla., what jobs are leaving the. a little small business manufacturing company. they were forced to shut down. the reason why they were forced to shut down -- and these jobs

will be sent overseas -- is because trial lawyers trying to buy the rhetoric from trial lawyers and gov. regulations. these are all principles coming from the liberal element of the democratic party. since 1968 liberals have controlled all facets of government at federal, state, and local levels. the control the educational system, and the control visual media. the question they need to be asking the, for all of our problems at all these things that have taken place and built up, when are they going to start accepting responsibility for some of the problems we have? thank you. two the good work. host: we are going to have a congressman from oklahoma on our program following next at about 8:30.

a democrat from washington will also be at the table. here is the reporting from the washington times. bill nelson a democrat from

florida -- good morning jinnah, you are on the air. caller: i would like to start off by saying i think you are the fairest and most non- partisan host that is on c-span. the young lady -- although she was beautiful on yesterday -- i think she is a little biased. i would like to give you an example about what i think about the economy. i think it is going down the tubes. how could you say that we are doing better when we are over $16 trillion in debts to all of these other countries that hit us? second of all, i work for a medical company. last week we had five layoffs. this is an example of what will happen to the medical profession, especially when the

new health-care law goes into effect. the doctors are all going to basically bankrupt, and they cannot afford their staff. the government is making it so difficult to even bill a claim to medicare and these insurance companies that it is almost impossible. we have of five employees, and a looks like our company is going under. all of you democrats living in some kind of fantasy land about president obama, you need to step back and look at the bigger picture of what is going on again show the world and what exactly he stands for and the very fact he is an anti colonist and was mentored by a communist leader. does that not mean anything to you people? we live by denture a free country. we live in a great country and he wants to change our country.

please wait up. host: maverick on twiter writes -- facebook, in addition to posting a comment we have turned this into a pole. you can respond with agree or disagree on our c-span facebook page. let's check in and see how the poll is going. so far 74 people say a bakery that the economy is recovering. 48 people disagree the economy is recovering. you can add your voice to that on c-span's facebook page. next up, jim an independent is on the air. caller: good morning. i would like to say that i believe the economy -- everyone saying it is doing well, my

company is closed up. i have a four degrees and i have to stand behind all of these newcomers to america. whoever is saying the economy is doing better -- i am sad to say i voted for the guy in office. host: what kind of work did you do? caller: retail. host: the whole entire company is gone? caller: it is gone with the wind. everything, the car dealerships -- there is nothing in town. host: how long have you been out of work? caller: a about one year and a half. host: have your unemployment benefits run out? caller: they are gone. i was a seasonal worker working at certain places.

i cannot get a full-time job. i do not know what people are talking about is getting better. i bounce iran from temporary job to temper a job. i did not have the student loans for nothing. i like your show on every moment -- every morning. these newcomers in america, they are forgiven for a softer anything. we have all kinds of newcomer criminals to our country. host: i am sure all of us wish you well on your job search.

here is the list, let's take a look. number one is still bill gates. warren buffett number two. larry ellison third-place. the koch brothers next. christy walton of walmart, jim walton, alice walton. robson walton. and in 10th place, michael bloomberg at $25 billion. do you think the economy is recovering? vivian is a democrat. caller: good morning.

thank you for letting me on the air. i do think that the economy is doing better. i work in the medical field. we have not lost any people. i think is, if we let the republicans have their way, this economy will go down. people that are stranded and cannot find a job -- the jobs are out there. there are plenty of jobs out there if people want to work. the republicans that i hear come on the television saying that president obama is not doing his job, he cannot do his job if the republicans will not stand with him. we are united. we are the united states. if we all work together, the

republicans work with the democrats and independents work with the republicans and democrats, i thank you for letting me have my comment. host: here are two facebook posts.

there's more on the facebook page asking the question, do you think the economy is recovering?" dave is a republican. caller: i may be a little bit off the reservation here, but i think the question is a little bit wrong. it is not if the economy is recovering, but has the economy recovered? the level of gdp is 1.7% higher than the prior peak in the fourth quarter of 2007. the economy has recovered. that is a real term. it has just been a slow recovery and has not been fast enough for a number of reasons. but the facts show from economic analysis that the economy has recovered. we have moved into an expansion

mode. it is just growing slowly. host: thank you very much. we picked the question of directly from the nbc news pollster question. 51% said yes. in august it was 50. the not shores are 2%. not recovering as 45% and 46%. pittsburgh, pa., to reset is up next. -- theresa is up next. caller: it is not progressing. it is not using its full potential. i studied an economist named milton friedman. his philosophy is laissez-faire which is putting it into the

hands of the people. that is all i have to say. host: usa today hasn't economically related story. your of as comedic -- commuting solo. next up is a call from irving, texas as we ask you if you think the economy is recovering. caller: kid you hear me?

host: good morning. caller: thank you to c-span. i believe the economy is actually recovering, but the so- called job creators are not willing to invest in our economy. job creators are outsourcing the work overseas which basically it affects the unemployment. it ought to be what each individual feels. the economy is better, because when president obama took office we were losing massive jobs, going through a lot -- we went through a financial crisis. he turned that around and stop that. the problem is, all of a sudden

all of these job creators that the bush tax cuts were given to -- i do not consider myself an economist. i am just a layperson. i watch a lot of c-span. the people that were given these tax cuts to, instead of investing the money in are in the in this country, they look at the bottom line and take the jobs overseas. the most expensive part of a job is labor. if you can get a job done at $5 an hour, with america you might be getting paid $15 an hour.

i do think the economy is getting better. i just think that, you know, the so-called job creators need to be more patriotic to were the country. host: thank you. let's listen to another clip from a virginia group of undecided voters. the question is "was cares or concerns you right now?" >> just the whole economy. how do we get out? i do not see any candidates really having a plan were really giving direction. host: back to the newspapers this morning.

next from twitter -- let's take the next call from here in washington, d.c. joyce is a republican. caller: i agree with those who say i do not think we are recovering. i think the major part of it is so many of the billionaire's are sailing along and we are being pulled back by billionaires' like george soros who continually says he was to

puncture the american supremacy. he has a book called "the bubble of american supremacy." he says that. i heard him speak a while ago at the national press club. one thing he was trying to do at the time was trying to legalize drugs. there was a huge article in the new yorker magazine talking about a meeting he held. i am very concerned about this election. we attended a meeting that some of his young people who have collected a lot of expertise on the internet talking about the millions and millions of votes they had collected that they thought they could interject into the voting system. one of the things that scares me so much more about it is the group he was leading said they

would like to legalize all drugs if they could. we have so many problems now with drugs already. usa today, some discussions over the years about the hoax of medical marijuana. host: i am going to jump in because we only have a few minutes left. the washington post tells us the washington, d.c. area where the government is a major contributor to the economy is thriving through the tough times. even after the recession took its toll, seven counties ranked among the nation's most affluent.

next call from north pole, virginia. caller:-- norfolk, virginia. caller: i think the economy is recovering. i would like to ask republicans to figure out one thing for me. if mr. romney ran for governor of massachusetts, how could they have -- he left them in a deficit. why can they not see that? he is no good. if he created all of the jobs, -- that is one stage he will not

win in host: this election thank you. the new york times has a front- page story. young people and the fact they are hard hit in the economic downturn. here is one quote. gary on twitter writes -- next sacramento, good morning to wesley, a democrat. caller: good morning. i think the recovery is slowly

but surely coming back until a positive direction. that was a caller from mississippi who alleged president obama was mentored by communist. that kind of comment should have been terminated. the conversation should have ended right there. are pretty fair. there is one other person -- a republican. i cannot understand why c-span -- it would correct people went out of line. host: thank you for your call.

on the senate side -- next is a call from indianapolis. nate, a republican.

caller: the democrats complained about the taxes and mitt romney. here is the history. when bill clinton was in office, their tax rate was 29%. he moved it from 29% to 21%. bush will read it from 21% to 15%. but only temporarily. it was supposed to go back under barack obama. he decided to let them keep their tax breaks. today there tax rates are due to bill clinton and barack obama. yes bin laden may be dead and gm may be alive, but the economy is in a coma. next year is a problem. under the current policies, we

are heading into a second recession with unemployment rates above 9% toward the end of the year. this is due to all the taxes on obamacare coming across. host: thank you, nate. lots of coverage on the report yesterday on fast and furious.

last call on the economy for this fund segment. this is from baltimore. jordan is an independent. caller: i wish americans would take the time to listen to international news and see what is going on around the world. we have japan, great britain is in a double-dip recession. we have countries in europe in a depression. if you listen to what is going on a round the world, you would appreciate what the president has done for this country. americans are buying -- we still have economic growth in america. it might be slow, but even china

had a 0.9% gdp last quarter. america, we are pretty much bearing great in of this world. compared to what is going on around. some people just don't want to listen. they just make up their mind. host: thank you. two e-mails to close us out. that is a lead into our next discussion with congressman tom cole who will be here. we will be talking about the so- called fiscal of that awaits in

december after the election. -- fiscal cliff that awaits an december after the election. we will be right back. [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] all this weekend, but tv's live coverage of the national book coverage ofbook-tv's the national book festival. your phone callsyourtweets

starting saturday at 10:00 and sunday at noon. >> we have to crack down on china when they cheat. they manipulate their currency. [applause] they still plans and designs. they have counterfeit goods. another went to be a responsible partner in the world of trade. they have to understand they cannot take away jobs on an unfair basis. >> he made money investing in companies that uprooted from here and went to china. pioneers. you cannot stand up to china when all you have done is send them our jobs. >> watch and engage with c-span as the campaign's moving forward toward the election. the first debate on domestic

issues will take place wednesday, october 3. audience members will get their chance to ask questions and a town hall debate on tuesday, october 16. a final debate on foreign policy will take place on october 22. following our coverage on c- span, c-span radio, and online at c-span.org. "washington journal" continues. host:tom cole is a member of the appropriations committee and the budget committee. we will talk to him about the economy, sequestration, and the politics of all of this. in the green room you saw the discussion with the audience. what do you think? guest: oklahoma is very good right now. our unemployment rate is 4.8%. i like to point out we have a republican governor and all

republican legislator. this has been a good time for us in contrast with the country that is not doing ok. both candidates would agree that a 0.2% is way too high. 2% growth is way too low. anybody who is not focused on the $5 trillion debt and the speed we are wrecking it up and the lack of a real effort to deal with it i think ought to be read about the future. i would say the state of the national economy is not good. host: let me just over late this. what is the message everyone is bringing to congress? guest: most people bringing that

message also are realistic enough to know that will not happen until after the election. you cannot make big decisions until the american people decide who the decision makers will be. it is unfortunate the super committee did not get the job done last year. the reality is, we need to deal with it. i think we will deal with it. i think it is one of the few things both parties agree on is sequester would be a disaster for the economy. they had different ideas about how to solve it. the president was the plan is effectively to let taxes go up. that is enough revenue to get rid of a sequester. republican plan was passed in made through the house, which is looking at not discretionary spending, making reforms that reductions, and try to deal with it that way.

i think we will be able to avoid it. is one of these moments before we get to the last possible second before we do something. that worries markets, the american people, and there is a chance something can go wrong when you wait till the last minute to do something. host: let me pick up on your argument that after the election people will understand. it will be people who are lame duck members making important decisions rather than duly elected. guest: is that:i would prefer it not be, but most will be reelected. that is the state of american politics. probably one quarter at the most would not be returning to the new congress. the president may or may not be the next president of the united states. two thirds of the senate is not even up for the election.

it is not as if this is a body not broadly reflective of the american sentiment. host:tom cole has a seat at the appropriations committee and also at the budget committee. he is here to take your questions or comments on congress and the federal budget and the debt and all the politics wrap up in that. let me ask you about medicare and social security. if there are changes in discretionary spending, everybody says that is not where the big problems are. guest: on medicare and medicaid, republicans have a plan that they have passed it twice. it has done over 42 votes. that is the paul ryan budget. you may like or dislike the plan, the problem has been we

have not done a plan from the democratic senate. the administration has not presented a plan. if you are running for president, you ought to put a plan on the table and let's debate it. i argued that we should present a social security plan as well. then chairman paul ryan decided not to because he thought it was the one area we might be able to compromise with the democrats. laying out a plan might make them more difficult. the math on social security is fairly predictable compared to health care. we know what the population is likely to be and the incomes are likely to be. unfortunately that has not worked out. i do think the next congress needs to deal with both of these things. we are not in the immediate jeopardy. everybody's social security taxes will probably go up.

the payroll tax they will run out. we still have major reserves that does not hit the wall until 2030. sooner is better. we can fix this now. on medicare, that is the great unknown. we know what is going to happen. that will be the paul ryan the proposal. the president again has not put a plan on the table, and the democratic colleagues have not either. host: when you look at the politics of medicare, i have been listening to recent polls coming out suggesting that since paul ryan's selection, florida is more in play that it might have been in the past. people are expressing the federal government tampering with medicare. guest: the federal government has already tampered with medicare. we shifted $700 billion out to obamacare to fund a new entitlement.

medicare is going to change. we have to be upfront with people and talk to them now. the best chance for medicare for those near term is actually the paul ryan budget. so far, again, the president has failed. he has not presented a plan at all. the politics are different. i am proud of the republican caucus for putting a plan for ward two years in a row. the minute you vote for it, you know it will be used in a campaign against you. that takes some courage. we have to have some courage in the senate and we have to have courage from the administration. host: before we get to calls, what do you think of the state of the romney/ryan ticket? guest: i think it is going pretty good. george bush was behind at this.

in 2000. i remember ronald reagan being behind in 1980. i think the decisive days of the campaign are in front of us. i think october will be a decisive month. the debates will be critical. we have two job reports between now and the election. we have a crisis in the middle east. that is unpredictable. i think it is volatile and clothes and will go down to the wire. host: but go to calls. new hampshire is a state being targeted by both campaigns. ron is a democrat. caller: hello, mr. cole, it is and honor to speak with the. c-span, also. always a great pleasure. you guys do a great job.

you said that president obama did not have a plan. he has been sending plans to congress ever since he has been there. his plans are dead on arrival as soon as they reached congress. this president has not been given four years to fix the economy. he has been given one year and a half. let me ask you this -- what has the majority of the republicans in the congress, what have they done in two and a half years? they cobble together some plans they knew that would not pass. they send them to the senate. the word out takes of the president's original plans. the republican -- they were out takes of the president's original plans. the president has tried to work with republicans.

you see that all of the time. it has not happened. host: let's pick it up from there. guest: first of all, remember the president to get everything he wanted 40 dead years and had total control of congress and still retains control of the senate. this idea that he is being held hostage by the house of representatives -- ronald reagan ever had control, and he got a lot done. bill clinton did not have control of either house for six years. i suspect you would think he got a lot done. the president has not produced. the things he did get done are remarkably unpopular. in terms of the last year and a half because that is all the republicans had control of, we have done a lot. the old republican party would have never passed the ryan a

budget. i think it takes a lot of courage to put your finger prints on a plan that will lower spending by $5 trillion. that is a real plan. the president has never sent us a plan on that. when he sent us a budget -- when it was put to a vote in of the senate, it failed 97-0 once and a0 the second time. when democrats will not vote for the plan the president of the, it is not a serious plan. the democratic senate has not produced a budget in three years. the ryan budget is an overall plan. a road map to tax reform, entitlement reform, a road map to stronger restraints on discretionary spending. i would argue congress has done more than it gets credit for. we have a budget deal in april 2011 to cut discretionary spending on an annualized basis

by $60 billion. we had a debt ceiling bill that cut long-term spending by over 2 trillion dollars. we had three free trade bills the president asked for. we just finished a transportation bill, which most people thought we could not do. took care of the student loan interest rate issue. we did the intelligence reform the of the industry should called the most important piece of work in that area. there has been a little bit more by partisanship than either side would suggest -- little more bipartisanship that either side would suggest. would you say we have not worked with the president, i think the beginning of working with the president is producing your position. this is the opening possession and what we would hope is a negotiation. the other side has to produce the open position as well. so far, i would argue the

president and colleagues have failed to make it happen. host: peter and twitter wants to come back to the medicare discussion. he writes please not the 700 billion again. ryan has the same 700 billion and his. guest: the difference is he did not take it out of medicare. he left it there. and i am all for saving money in medicare. i think you should leave the money your saving in the program you were saving it from. this is a program were the number of people will probably double in the next 20 years. taking reserves out of it to fund a new entitlement is simply wrong. host: next call is joe on the republican line. caller: good morning.

congressman cole, i am appalled at were the republican party is going. for you to sit there and think you're done a good job is crazy. ttwo questions. what do you think about a constitutional amendment to base your pay on performance? and what do you think we are ignorant, when you say your quintic the president of one- term president and make the rest of us pay for your childish ax? cts? host: you listed yourself as a republican. caller: i am very upset with the lip service. you: what are the two ?ere referring to host

guest: karl rove. i did not say we of of a wonderful job, and i do not think anyone in congress is please. i did say a lot more has gone done than anyone suspected. the things i listed were all bipartisan, deals with the president of the united states. i think the fundamental question of the election is the one the next four years to be like the last four years because the present as not told us why and how it would be different. i cannot respond to your two- vote idea because i am not sure what they are, but pay for performance is never a bad idea, and i would be willing to sit down and talk to you. i would like to have something like that link to passing the budget. i did that is a fundamental part

of the job. it is only taking 51 boats. there are plenty of democrats to pass it. we passed a budget. it is a budget that will be the subject of many political advertisements, already is. we are under attack. that is what government is about, choosing. the other side has to make a choice. without offering an alternative i think is an application to responsibility. caller: joe ramirez wants to know if you voted down bowles- simpson? guest: it was never offered to the united states congress. i think has some ideas and it. it has no plan to reform medicare or medicaid and it assumes the president's health- care plan stays in place. i am not in favor of either of those things. if inc. something like the ryan budget, that would be good.

-- if it inc. something like the running if the present as the reduction have not seeni have not stoloni it. host: the next calller is from gainesville, florida. caller: good morning. i have several questions about the fiscal cliff. is it something we're going to be totally concerned with, and how does that affect americans? from what i am hearing on mitt romney i's video is that if he s president, he will not have it do anything. we will see a gained from that

just by him being president. it seems crazy that if he is elected president, we will see a gained, and yet this other calller stated earlier that mcconnell from day one said he would block anything the president does. if he is gone to do that, we see there is nothing getting done. mitt romney is president and says without even doing anything, there is planned to be an increase. this is crazy. i cannot believe we are living in america and hearing this. this shows who he really is. >> first of all, i am not sure -- i do not recall mitt romney saying we being present will fix everything. -- me being present will fix everything. i think he has laid out an

agenda that will get things moving again. in terms of the fiscal clip, i think you are right to be concerned. i do think we will avoid it. i think both sides agree sequestration is bad, but it is also difficult on domestic programs as well. there are ways to avoid it. it will be very different obviously if the democrats prevail that not only reelt the president but will take both houses. i do think we will avoid the fiscal clef. it will take an election to break the stalemate. while a lot of things have gotten done, there are fundamental disagreements in the party. i could not agree with the preme court decision, although i think justice robert said it right when he said it is not our job to protect the american people from bad decisions from the elected officials. so we agreed to decide this

state -- the fate of health care in the next election. . a lot of big decisions will be made by the american people in november. host: bill king says a simple yes or no question, well above cost seniorget 6000 more per year as is being reported? guest: no. the ryan plan is basically medicare part d applied to the whole medicare system. we have found that has actually worked. the only health care program i am aware of in history that actually cost less than we thought it would. 47% less than the cbo projected. it is over 40 percent lower

premiums for individuals than we thought it would be. it has actually been a program that has worked. his medicare proposal is largely rooted in the democratic deficit commission chaired in the late 1990's. these are not new or sweeping or radical ideas. these ideas have been kicked around for a long time by both parties. the package them and put them out there and was willing to take the political risk to do the right thing. medicare and medicaid will not survive in their correct form. it will simply have to change in some way to accommodate a much larger senior population. we can do it thoughtfully, gradually over time, or wait until disaster hits, but one way or another the system will have to change. host: next up as brooklyn. les, a democrat. caller: good morning. the rep.o ask

he just said the cbo figures were crazy, but the republicans will quote figures from teh is in theirit favor. 1700 $19 billio what was the savings from medicare for the new health-care system? you said he is going to take in and put it into obamacare. that figure was not going into obama care. that is what it would save with obama care from the savings from

the course of health care. you keep saying, and it is the second morning in a row i have been sitting here watching this tv with the republican saying nonsense about the $700 millio billion. it is a savings. with the obama care in place we will save $19 billion over 10 years. host: thank you. guest: this is in some sense as a medical argument. it is a savings. -- a semantical argument. that savings plus 600 billion in new taxes are what finance that. it is one thing to save money and leave it in the system, in other words not using it up for a brand new program. the country is already running trillion dollar deficits.

the largest that that any single president has racked up in a single term. yet we're talking about a brand new expansion of entitlements. that is done by reforms in medicare that divert money that otherwise would go there, someplace else, and 600 billion in new taxes. you can describe it how you want, but basically taking money out of medicare to help, along with additional tax revenue, to pay for obama care. that is the way the system is designed to work. i would argue, if you can save money in medicare, that you leave the savings and touched. you do not divert them to a new program. savingsyou leave tehe untouched. the president has presented a budget that never balances. you have to have a budget that balances. it takes a couple of decades to come into balance.

the idea we're being brutal in is simply not accurate. the ryan is one set of ideas and on the table. we still have not gotten a set of comparable budgets from our friends in the senate or the president. host: nick proto is asking your thoughts on the republicans killing the veteran's job bill? guest: i was pretty busy with legislation of my own and did not see that. ting on that,nt andin the two sides have a pretty good record on veterans affairs. george bush increased by one header% and eight years. the president has done it by 40%

in its first term. we a cooperated across the aisle and the house and senate on a jobs preference and tax credit program for returning veterans. this is an area you cannot possibly do too much. these men and women put themselves in harm's way to protect the rest of us. i am always willing to sit down and look at what we can do in that area. president obama and bush have a lot to be proud of in that regard. both parties have worked together on veteran's issues. host: for congress that often has a bipartisan split, -- a partisan split, 310-95 on federal funding of political party conventions, which you would like to end. guest: your very kind to mention. i think most american taxpayers do not know the presidential public financing system parties

each received a check every four years to help them put on a political convention. this year it was almost 18 million for democrats and republicans. i think that is a frivolous use of public money. i used to be the chief of staff for the republican national committee. i can assure you both sides can raise the money to put on their own conventions. if they cannot, they will curtail the conventions to put on tused the money they can raise. it is only four democrats and republicans. i think it is unfair. the money should stay in the federal treasury and should be used for more pressing purposes. i do not think any american really believes we need to publicly fund political campaign conventions. host: next is a call from roy in baton rouge. caller: i wish the guest who was

next -- they swear to uphold the constitution, if i am not mistaken. the constitution states it is the congress who was supposed to regulate currency for our republic. the federal reserve seized the power in 1913. it will be an anniversary of the century. within that anniversary they have bankrupt the country. we're 16 trillion dollars and counting. if the congress would assert their power back from the federal reserve, then you could hold people accountable for the massive debt that is increasing. it is not too late to do this. it is almost like you would take the quarterback and a hurry. here is an analogy. the quarterback gives up his right to play. he gives it to the senate.

he gets in the locker room and curses the senate out. if people would wake up and demand congress get rid of the butter reserve, then we could hold congress accountable to book them in and vote them out of the run up a massive debt like we have. this problem would be solved in a decade. guest: a couple of things. to be fair, and i can be very critical of federal reserve policy. i think the policy they just adopted, $40 billion a month and mortgages is a big mistake, and potentially inflationary down the line for, and a pretty strong statement the president's economic policies have not worked. having said that, i do not think about reserve is responsible for the debt. it is a congressional responsibility. that is something congress has done or failed to do. not the federal reserve. the federal reserve has two key

functions. one is to maintain the stability of the currency, and the second is to try to maintain full employment as well. sometimes those things are in conflict and they try to juggle them. this congress has looked pretty critically on the federal reserve. we passed through the house and to try to get abill clearier idea of what has happened. he has been more forthcoming than most but reserve chairman have been in the past about discussing things openly. the last thing i would ask the calller to consider is you're really want politicians to be in charge of the stability of the currency? they think politically it's usually react according to the election cycle. that is not a good thing for the country. i do not know anyone who was in finance that actually thinks we

should get rid of the federal reserve. the people in finance think it is an indispensable stabilizer in the financial system. attack, y to bash an attacd but it was passed in 1913 for a reason. we have had a lot of currency instability in the course of the first part of the american experiment, and we thought this would give us better stability. actually, i think it probably has. paul volcker probably did more to break the inflationary cycle than anyone else. it has had successes and failures. i do not think getting rid of it is a good idea. host: a tweet for you -- the budget have to balance? did reagan's balance? you cannot:

indefinitely run one trillion dollar deficit and keep thinking people will buy the debt. right now the biggest in order is the federal reserve itself. that is like buying your own debt, sooner or later that does not work. we do not have nearly the latitude here that one would like to have. you have to get the fiscal house in order at some point. i think it does not have to balance immediately, although obviously would like to do that. you need to know you will have more than enough income to pay off your obligations. right now we do not have that. sooner or later it will cause economic havoc. i would argue one of the things hurting us now, i think a lot of private money is on the sidelines, in part because without having our debt in order they think taxes or something will go up. i think it is already

discouraging the economy. -- discouraging investment. we have to sit down and get serious about this. we've done it before. it was done in a bipartisan fashion. we need to do the same thing again. i am hopeful after the election we will be able to get serious about that. host: an email -- the fiscal clip would reduce the budget and deficit by $6 billion. -- the fiscal cliff would reduce the debt and deficit by 600 billion. that sounds like a place we should explore. guest: this would potentially trigger another recession. it would slow economic growth by a percent or% and a half. we're growing at 2.5 percent right now. we need to avoid this. but the school cliff was set up

to be an alternative that was so unthinkable that you would force the sides to negotiate, which is what i think will happen after the election, based on who wins. host: expecting christmas in the capital? guest: i am certainly not making any plans. if mitt romney wins, might be a little less so in the fact that decisions will be postponed until the new administration and congress comes in. we have already passed a continuing resolution in the house that will give us a financial stability until the end of march. i think a lot of big deals will happen between the election and that point, regardless of who wins in the election. host: john, independent line. caller: hello?

thank you for c-span. i think it is not biased media. the problem is the corruption. with 25,000 lobbyists in washington. they cannot do their job. if they did not take care of this problem, the country will go down. guest: i think that is always something to be concerned about an appropriate, but for people who say nothing is done in washington, the opening two years of the obama administration a lot got done. i did not agree with its, but the health care legislation and the stimulus are huge pieces of

legislation. this congress alone, a major budget deal, debt ceiling deal. three free trade bills. student interest rates. the idea that things do not get done is not true. we do have a series of looming challenges. impending fiscal crisis. we have the alternative minimum tax running out. how we pay the medicare providers and medicaid providers of running out. the payroll tax all running out. big things that will happen automatically or can deal with thoughtfully. i think the election will give us indication of how these things are great to be handled and dealt with. i am not telling you the process is perfect or we get to deal with everything we ought to do in the way i would like to do it, but that is democracy. host: "the washington times w" writes --

not necessarily. not necessarily. the ryan budget avoids this. taxes -- if the president is reelected, we know taxes will go up for high-income earners and small businesses. the obama care has hundreds of billions of dollars of taxes associated with it. those will all fall into place. i think the payroll tax holiday will end regardless of who wins the election. you cannot indefinitely do this. the bad thing with any kind of payroll tax holiday, sooner or later you have to put it back on. the president wanted to do that in exchange for extending the

bush tax cuts. he got that compromise. the president could have ended them all in 2010. he chose not to. i think he chose wisely. he asked for a couple of things in exchange, which he got. the payroll tax holiday and extension of unemployment insurance. the process does all work, but it is not working easily right now, because there is a sharp difference of opinions between the sides. host: this is a tweet i would like to get your reaction to. bush came in with a strong america. ix years later america wasn' in three wars plus almost eclipsed -- almost bankrupt through fraud. the 16 trillion is all bush's debt. >> no, it's not.

he got us into war, that idea, 9/11 got into war. this president has actually tripled the number of troops in afghanistan. by the way, have republican support to do that. this idea that bush manufacture that attack, i do not think so. it was planned and executed in afghanistan. thank goodness we got osama bin laden. while it is a difficult and tough fight, ellis' we do not have massive terrorist training camps with people planning to attack us. we were on the offensive against them. i think the pictures of the bourse is very mixed. for people to say you did not pay for it, we do not fight wars to pay for them.

i think the situation is somewhat more complex than the viewer might suggest. the next calller is from winston-salem on the democrat line. she waited all that time. off she goes. congress leaves after this week and will not be back until after the election. how do you see november and december playing out? i think everything will be in the shadow of what the american people decide on election day. the first order of business will be to deal with a sequestered. the present as been forthright about the taxes. the republicans have passed the way they would deal with it in may.

one of the other ways will prevail and deal with the sequestered. then we have to deal with are you going to let all of the bush tax cuts go up? democrats have already accepted essentially 80 percent of them for 96% of the american people. they must not think they're all bad because they're willing to take almost all of it. there will be some deal struck on it. i would like to see us honestly extend them all. do what president clinton suggested, which is expand them all for a year in work on a total of all of the tax system. we all know too many credits, loopholes, and too many games and the system. we need to compensate for medicare and medicaid. that all runs out. otherwise, 27% cuts across the board. that has to be dealt with.

there is a whole succession of items that have to be dealt with in a short amount of time. host: you were the director of the national republican committee. i know you follow this pretty closely. guest: after three elections in which the house has changed control twice, i think you will see very stable house landscape. the real action is in the presidential and senate race. we are in a very narrow band. republicans might pick up two or three seats. we might lose half a dozen. we are almost certain to have a republican house of representatives on the other side of the election. steve israel and pete sessions have both done a good jobs. you will have a lot of action in motion, but not much movement in the end. it will be a pretty stable year

for house elections. host: thank you for being here. i am sure we will see you after the election. mr. cole talked about the house races. we will bring you up-to-date on two closely-watched senate races. joining us this morning is shane goldmacher, national journal's congressional correspondent. the two races i want to talk about our having debates tonight. the first is the virginia senate race. i will show our viewers the polls. two polls favor kaine. what can you tell us as the candidates in the race to go head-to-head today? guest: these are two really known politicians in virginia. two polls came out yesterday and

for the first time they have not been completely deadlock. today they will meet for the first televised debate. it is the first opportunity to try to reach an audience, and a particularly important audience that is being aired in northern virginia. toy're trying to reach out independents and women in those suburbs. host: the northern virginia area has been historically much more blue. i am wondering about how the state is breaking down overall with the candidates. where is the appeal in the state? guest: northern virginia was definitely tinted blue, and this is one reason it has become a president a battleground in senate battleground is that the growth has been so fast and leading democratic that it has turned the whole state that the southern into a competitive state. to talkt's move on

about massachusetts with the incumbent scott brown challenged by elizabeth warren. looking at some recent polls. elizabeth warren has a six. edge on scott brown. >> four consecutive polls that have heard leading. late last night was the first one had him leading again. this is the first time these candidates are getting together. it will be an interesting debate. scott brown republican in a very blue states. . elizabeth warren just wants to close behind them and get past the line. he is trying to help her. he gave her prime-time speaking role at the democratic national convention and try to promote her as much as he can. scott brown does not want to talk about republicans. he wants to run as mr. popular

in 20210.wn who run won he ran an advertisement talking about the boston celtics and does not even mention running for u.s. senate. host: what has the reaction been n to the mitt romney and the 47%? guest: it is a tie rupiahs to walk. he wants to distance himself from the republican line, but acknowledge he remains a republican. host: going back to virginia right now. it says the top 10 richest counties in the united states, six of them in the washington, d.c. suburbs.

virginia's economy doing better with the federal government in the northern area of the northern area and the military in the southern part. guest: northern virginia is really well off. that is really being reflected in the tv ad campaign and of the campaign both candidates are running. tim kaine has two advertisements he has run this week. president obama is that to under $50,000 and below. he says he thinks that should be $500,000. the reason most people think is because there are a lot of people making $250,000-$500,000 in virginia. it depends on which candidate is

talking. in virginia both candidates talk about the economy. in massachusetts they both are, too. elizabeth warren wants to talk about all kinds of democratic issues. she wants to talk about every issue possible to mixture boaters know scott brown is the republican and she is the democrats. host: what kind of money is going into both of these races and how much influence of super pak spending on both of them? guest: an enormous amount of outside money is going into the race. the tv has been filled with advertisements paid for by the super pak group's four months and months. mostly negative advertisements. totally different story in massachusetts. in massachusetts, elizabeth warren and scott brown have a handshake agreement where we said we will not let outside groups run our campaign.

they have affected play kept all such groups out of the race. -- they have effectively kept out such groups out of the race. host: both of these races will have debates today. one of them may be affected the senate schedule. we will bring them open for c- span. as the agenda the past, election we have done in the past, we will bring in 100 seats. you can see the issues being debated and the hotly-contested contest all of the country. shane goldmacher, thank you for

your time. let me introduce you to our next guest, rick larsen. our topic is a voter registration laws and the changes happening in states. thank you for being here. you found a piece of legislation you are sponsoring called the american tax act of 2012, and you want to do what with it? guest: the american vote act of 2012 is a pretty simple bill and my view. in washington state we have mostly male in balance. you really cannot voter i.d. laws, because there is no going to the polls to check id'd. when they fill up their ballot, you sign it on the outside as an affidavit, saying the person whose signature this is is this person's vote. we a very high penalties if

there is a fraud. it is a system that works. what i'm trying to do is say the states that have voter i.d. laws, which i think will end up suppressing votes, what the american boats access to a person shows up at the ballot without the appropriate id according to the state law, if they can decide an affidavit saying they are who they are and that balance will count, not as a provisional ballot but a standard ballot, that person does not return to the polls or jump through any more hurdles in order to exercise their right to vote. this person has to be a citizen and legally registered to vote. the penalty will still be high if there is any voter fraud at all. we had a press conference -- press call on this a few days ago. host: sent to support the

personal affidavit, let me ask you to respond to a story that came up in research. this is from a few years back, but it is in your state. a survey shows procedures for evaluating signatures are highly subjective and varies from county to county. more than 3400 votes were rejected because the signatures match.t match official guest: i am a former county elected official. i have sat in rooms after elections, along with republicans, and a third party as well in order to do these signature-matching exercises and make the determination with their eyes on the ballot, on the signature, when it is disputed to determine if we will count as or not. that is a system that works.

it is agreed to by all three of us or none of us whether or not the vote count. that process is a system that works. i would argue if we have a fraud problem and washington state, we have a system in place to deal with it. with high penalties, eyes on the ballot for disputed signatures and then move forward. host: on the idea of changing voter registration laws, we had a guest on the program last week. here is what his thought is philosophically about requiring i.d.'s for voting. guest: you need a id to talk to eric holder, enter a federal building. bottom line, voter i.d. is part of american's daily life. there may be a few people who do not have a government-issued id.

i say let's get them one. you cannot travel. you cannot cash a check or collect welfare benefits. let's get people an id. the number is fault -- far smaller than 25 percent of americans -- african americans do not have an id. host: this is the report he is referring to. what you have to say? -- do you have to say? guest: the brandon cente looked center looked at the numbers and determine whether they met qualifications that were put into place. 25 percent of african- americans, 16 percent of hispanic s. i think what is patronizing is

people assuming everyone will have an ide that meets requirements. the other idea about having an id to get out we were driving or by cold medicine. what i want to buy cold medicine, i want to be able to do that. i travel a lot, but i do not have a constitutional right to do this. i may have to do those things, but not my constitutional rights. the hurdles to do that should be much less if it is a constitutional right. host: don richey righwrites -- guest: i am assuming he means our washington, d.c.. people from washington state are little particular about that. i would have to go back into

history to look of the problems we've had sometimes in our states with those states have gotten in a way of people tried to exercise their legal right to vote. do we have a right to tell michigan or any of the other states have to set up their election systems? no, but i think we have a national obligation to ensure the folks that are leach wrote -- legally registered to vote in citizens of the u.s. are able to do just that. host: gary in baltimore. he is a democrat. caller: good morning. can you hear me ok? thank you c-span for having the least-biased reporting. i have a comment on the voter i.d.. what is the problem? from what i have been seeing, solution to a problem

where i cannot see it exists. if i am correct in some of the stuff i have seen, how much boater fraud was there in the last election or the previous? 0.0004 per cent? %? this is a waste of time and distracts from the real problem of, and i am sorry i have to put you in this, congress not doing its job and voting on a budget for things on a timely fashion. i do put a lot of blame on the obstructionist republicans that would come in and say our number one job is to make this a one- term president. sink the ship no matter what. we are all in a boat, and if you

are leaning one way and the others are pulling the other, we're not want to go forward. in fact, we could capsize. my thing is, both of all-out -- i am sorry, that is not a solution either. i will say this, anybody that comes in, they should be fired. if we have to have an election every year because congress keeps putting off doing what it is supposed to do by the time it is done, and they should all be fired. should all be fires. d. guest: thank you for the discussion. you make several good points, which one is what is the problem? this america votes act addresses the very specific issue about allowing folks who are citizens,

legally registered to make sure the hurdles to exercising their right to vote are as low as possible. i jokingly say this, but i'm trying to exaggerate to make the point, there have been 10 alleged instances of voter fraud in the past 10 years. or the same time, 36 architects in the united states. there are 304 cases of exploding toilets were there was a recall of a particular brand of toilet. if we are born to address issues by the number of times things happen, it is pretty clear voter fraud are happening at a level that require action by the states. that is why i think the voter i.d. laws are not really about getting voter fraud, they are about suppressing the vote.

that is why we have the america boats act of 2012 to give people another alternative, their name, the affidavit saying who they are, and then have high penalties if there is broad in that case. host: gregory on twitter wants to pick up that and as if you could expand of the alleged voter suppression and a recent court ruling? guest: that is a great question. there is a lot to that answer. the brennan center acknowledge is 25 percent of eligible african-american voters, these are the kinds of folks that would not have or do not have the appropriate boater aideed to comply with the voter i.d. laws. that is going to suppress the vote in those populations.

i think what we need to do is work to increase the vote for all populations of anyone who is a citizen, legally registered to vote. that is what i mean by voter suppression. the second part of a question, please? on the court ruling, it depends on what state you're talking about as well. the texas voter i.d. law needs pre clearance by the department of justice and the courts so far have said that is an extremely strict law that will disenfranchise people. the pennsylvania supreme court remanded the lower court decision to the lower court and asked them to prove voters would not be disenfranchised. there clearly is pushed back in the courts on these voter i.d. laws, a push back i think is appropriate, and that is one avenue we need to pursue.

i also think legislation is an appropriate avenue to pursue as well. host: "washington times" writes -- this will expand the conversation. "usa today" writes -- also, the opposing view --

after 2000 the country spent a lot of money on upgrading the voting booths, stations around the country. are -- how are we situated going into the election? guest: much better situated than we were in 2000. in 2002 we passed a help america boat acvote act. this would help them upgrade and update their voting systems. there has been much concern -- much less concerned lately about voting fraud, but still important to have a paper trail. i know where i go i go to my county auditor's office and invokecan vote in person.

i am one of very few who do that. there is a paper trail when i vote electronically. it does bit out a piece of paper so i can review myself on paper how i voted. there are systems out there that do work. i think we're pretty well situated in terms of electronic voting. the issue for the fall has to do with the impact of the voter i.d. laws on voter turnout, voter suppression. because as a presidential election year, we will have a lot of people wanting to vote anyway. turnout may not be impacted as much. look at the next year when you are looking at elections locally or statewide, there is always a lower turnout. the more you raise hurdles in a local election, the lower turnout you're going to have. host: are you anticipating, given the closeness of the polls

and the new laws, that there will be litigation with the election? guest: i think it would be wise for campaigns to be ready for litigation. am a little biased. i do not think we will be all that close in the end, but i think it is important, even if it is not close, that people defend other people's right to cast their ballot. if there are cases where people went to the polls and were unable to cast their ballot, that has to be defended in the courts. host: next up a guest in new mexico. caller: good morning. how are you? guest: good morning. great to have you up so early. caller: i have two items i want to discuss with you. the first is also security and medicare. as a background, i want to tell you i am 68-years of age and

have just recently applied to begin social security. i have not received area and i also start paying into social security and medicare back in the mid-1950's when i was 11 or 12 years old working as a bad bog boy. it was explained to me the 15.3% that was withheld from a check and sent to the federal government's would be kept for meat and taken care of and a separate place and would be given to me in the form of love -- in the form of a lifetime annuity, it like an insurance policy that if you live a long time, you collect more. if you die early, you do not collect anything. what this means is taking care of your health and safety and so forth.

host: what is the question? caller: this is kind of a statement released. i take on brent's with people calling it entitlement. my social security and medicare is something i have paid for with my own money at 15.3% of my earnings for my entire working lifetime. i have been working since 1955 or so until the end of last month. host: i am born german at this point. concern about it being an entitlement. -- i am going to jump in at this point. guest: if a person earns social security, if they're 65 or entitled toen they are get a health-care procedure paid through medicare and entitled to

social security payments every month. i understand where bill is coming from on the issue of being resentful of it being called entitlements. in terms of budget amendme, it n entitlement, but you're paid into the system and should get it out of the system based on the formula. host: i read there was a milestone reached this year where now younger people, a generational divide, the people bills age and older collect more benefits than it paid in. as of this year people who are younger participants it in the system will get less. -- under participants in the system will get less. -- younger participants in the system will get less.

guest: we may have to make reforms in the future, and perhaps on a later date we can checat on that. davis says thisren is a poll tax because it keeps those without money from voting. guest: even though boater id is not something that you pay at the poll, you may have to under these laws purchase a separate id in order to go vote. it certainly can function as a poll tax. this would violate the constitution and something the courts would sort out. the basics of the america votes

act of 2012 is that if you are in a state where there is a voter i.d. law, you show up without a corporate id, you can sign an affidavit attesting you are who you are, and if you are not, we will find you. the state will find you and fine you. under this law, up to a $10,000 fine or five years in prison. that is a high penalty for voter fraud and think it is appropriate. host: some emails. tom writes what is so hard about getting an id? i got passports that were pathetically easy to obtain. guest: i do not think -- i

fundamentally disagree it is more than enough time for people to get proper identification. i disagree with the premise that an id is something people need to vote. you can do this and watching -- and washington state has shown, you can achieve what people say they want to do by having high penalties for voterby having hir voter fraud, by having folks sign on the dotted line when they go to the poll, a testing to the fact that they are who they say they are, with high penalties. the idea that we are somehow equating moral equivalence to a constitutional right to vote with having an idea to buy medication -- at this point, it is beyond me how we can acquit this. there is no doubt you need an id sometimes to buy cold

medication. no doubt, you need an id to get on an airplane. that is for security purposes, not for voting purposes. but to say, therefore, you need an id to exercise a constitutional right to vote, the constitution has always been about lowering the bar for participation in society, not about raising those hurdles. host: this is a message from allen in indianapolis. guest: that is the point i'm trying to make. it is not easy for folks to get these ids. on top of that, you have folks

who have been voting for decades, and sometimes just for five years, and now we are going to change the condition that they have to comply with in order for them to vote, something they have been legally doing, in some cases, decades. i also agree with you about the amount of money in campaigns. it is tremendously high, it is atrocious in some cases. you need to raise money to communicate with voters. since bill got to go off topic, i'll go off topic as well. we need to pass a constitutional amendment to get rid of the citizens united decision. that is opening up the floodgates to undisclosed money in politics. that, as well, is causing some suffering of our democratic republic. host: is it likely to happen? guest: i did not know any

amendment for the constitution that is passed quickly, but we need to start the conversation. i am already on the bill in the house of representatives, similar to bernie sanders' bill in the senate. host: phone call from eric in pennsylvania. caller: there was a 1960 court case where the court ruled there was no legal obligation to social security money. is not a retirement system. with that said, let me get back to the subject. the fact that you worked in the elections office, i would like to know how many investigations you look into of voter fraud. and it goes back to the question, can you prove a negative? how can you prove there is not fraud? louisiana is an excellent case. by the way, the federal government is the last

organization i would use if i was worried about this. you have so much going on, you are deceitful, confiscation. i do not think the government has much integrity. your idea is it is not easy. since when is easy constitutional? you can forge signatures. you put the cart before the horse in so many of these instances. you have this huge backlog of system. why not just catch them before they do it? why does the government to be involved in every step? host: we have the point. thank you. guest: i was a local county elected official, as part of the county canvassing board. i was not on the election board. after an election, they need to

do signature matching for disputed ballots, as well as to look at ballots that have been marked, to determine voter intent. you do that with a democrat and a republican in the room, and a third party, and they have to agree for that ballot to be counted. with regard to your point about the federal government, i can understand your concern. if you are tried to make the case that somehow the federal government has stood in the way of voting rights in the past, i would argue, if you look at the kennedy administration, the work of the voting rights act, sometimes it takes the federal government to step in to ensure the american citizens who are registered to vote, first, are registered to vote, and second, are able to cast that vote. , unfortunately, we have a

history in our country where that has not always been the case. >> what do you -- host: what do you think of this sentiment on twitter? the problem has been low voter turnout. we are too lazy or fraudulent voting. guest: i suppose that is one solution. from my perspective, lowering the hurdles for u.s. citizens to vote is always better than not. and then you have high penalties for voter fraud. whether or not that results in voter turnout being higher or lower, i think, is separate. you need low hurdles to vote, high penalties if there is fraud. voter turnout is determined by a lot of things other than whether

or not someone wants to vote. there is a lot going on. host: ed on the democrat's line. caller: i have been trying to get on desperately. i was trying to get on when cole was on. it is funny how the republicans are all the sudden conscientious about the budget deficit. if you remember, when they were in there, bill clinton's administration brought down the debt and they said deficits do not matter. we need to give breaks to corporations and other money people because they create jobs. we know that is not true. we had unfunded wars, all sorts of things.

we had a garment factory and a shoe factory here, but they are all gone. they moved overseas. 98% of all shoes are now manufactured in foreign countries. we need to bring those jobs back. we need to charge taxes and tariffs on things imported to our country. host: thank you. we are going to stop you there. we began the program with a question. 51% of americans said that the economy is doing better. how is the economy in washington state? guest: a lot better. about one in three jobs is dependent on trade. that is driven by the global

economy. since the global recession took place, we got hit pretty hard. with the economy increasing, a trade growing, washington state is doing pretty well. there is a marked difference in people's expectations about the economy. my district is north of seattle. if it has a 7 asbut if it ha it was builtmber, in my district. we are training manufacturering

workers for that, but there is some ways to go. of course, nothing is perfect, but it is getting much better. host: the viewer who called supported a tariff. what we think about tariffs? guest: washington tends to be for trade, but also tough trade enforcement as well. the thing that the obama administration is doing in particular when it comes to china, trying to hold china to its of cto obligations, is important for the country and also for washington. host: aaron2000 the sentiment on twitter.

guest: you may not be that far off. i have given it some thought but i have not come to the same conclusion. he or she may not be far off. section 5 of the voting rights act is meant to ensure the states that have to comply get clearance from the department of justice on some of the changes they make concerning access to the ballot. that is why the voter id law in texas was opposed by the federal courts. the other issue on voter suppression -- whether or not there is some nefarious motivation behind these states to pass motor id laws, the end result, according to studies, is raising the hurdles for folks.

this is affecting one in four eligible african-american voters and one in 10 eligible hispanic voters. that is not who we are as a country. host: a sensible argument. guest: i am with you. that is what it is all about. host: the america votes fact is available on our website. you have how many co-sponsors, and where will it go? we had 22 co-sponsors. we are still working on republicans. i think there are enough reasonable republicans left that we can get some. i think the history of expanding voting rights, at least keeping the hurdles at a low wall where people can vote, this is the

first death in a long road. host: a viewer in jacksonville, ark.. jack, go ahead. caller: good morning, congressman. you mentioned the constitutionally protected right earlier. do you believe you should be able to purchase firearms without showing id? that is the constitution to protect -- protected aspect under the second amendment. host: required to show i.d. to purchase. caller: yes, fire arms. guest: the second amendment to the constitution gives you the right to bear arms, absolutely. what i am saying is the constitution gives you the direct right to vote. you do not need to purchase your vote. you have a right to vote. there is no in-between on that.

host: so that is not a good comparison. guest: no, i do not. we may disagree, but that is what thmakes america a great country. host: you can read more about this on the website. will we be working on this more for next year? does it depend on the outcome of the election? guest: no, i will continue to work on this. we will be back after the election at some point, we will uck, but thee do important thing is we need to show that we are going to push back on the voter id laws that many believe are going to suppress the vote. we need to push back and let folks know, if you are eligible, registered, a u.s. citizen, you should be able to vote. host: coming up next, our final

segment. donald marron will be with us, the director of the tax policy center. we are going to dig deeper into mitt romney's preference into the 47% of americans who do not pay taxes. we will look at who does pay taxes and how it breaks down according to the irs analysis. >> i think there are a lot of anti-obama books out there, a fair number supporting the president. i did not want to write either of those books. i wanted to talk about the most interesting question. look at barack obama as a character. he is a fish out of water, in a way. very little executive experience. his entire life is that the law professor of lectern, the committee table, but he is never

the guy in the front of the room deciding, making the hard calls. he has very little management experience. and then suddenly, he is in the most important managerial job in the world, president of the united states, leader of the free world. so my question is how does he do it, how does he make decisions? >> investigative journalist richard miniter investigates the obama administration. saturday night at 10:00 eastern and sunday night at 9:00 eastern. host: this is donald marron, director of the tax policy center here in washington, d.c. we are going to dig deeper into mitt romney's reference about a 47% of american to do not pay

taxes. where does that number come from? guest: it was from a report that we put out of people who pay federal taxes. we estimated about 47% paid no federal income tax. host: when you break that down further, how do those numbers brick town? when you pay no federal income tax, does that mean that they do not have a payroll tax withheld from their paycheck? guest: no, this is purely a statement about the federal income tax. almost two-thirds of the people in this category to work, so they pay payroll taxes, they contribute to social security and medicare. host: the number i have seen is 18% of the public pays neither the payroll tax or income tax. can you tell us more about that some of our population? guest: you have some folks who are retired, so they do not pay

payroll taxes, and they have incomes low enough from social security and pensions or they do not have to pay a federal income tax. senior citizens get a few tax breaks, the most important of which is, and large portion of social security benefits are not taxed. host: the working poor, the elderly, and the low income. but spend some time on them. the working poor are affected by the earned income tax credit and by child credits in the tax system. when did the earned income tax credit come about? guest: i believe in the 1970's. it had been expanded several times in the ronald reagan years. it has had bipartisan support, and it is originally designed to offset some of the peril taxes that low income people face. the idea is to make work more attractive and to help working families. host: philosophically, why would

republican support this? guest: because it is designed in such a way to reward working, and in particular, for those entering the work force, makes work more attractive. host: so they come into the work force, their income is not taxed, so they have more to spend? guest: some people actually get money back from the government. host: so they earn more in taxes than they have earned in salary. they get an extra supplement? guest: in terms of the federal income tax. what they paid in other taxes is larger still, so it is a net -- host: what about the child credit? guest: this is designed, in part, so that it gets larger for people that work up to a certain

level. the basic idea is for families that have children to give them a break on taxes, make it refundable so that they get money back. host: we are going to open up the phone lines. e-mail and twitter as well. you are welcome to join in on the conversation. democrats, 202-737-0002. republicans, 202-737-0001. independents, 202-628-0205. our topic is who pays taxes. we are working off of the mitt romney, this week, and what your view is about it. there is a debate currently happening in washington that everyone should have a stake in the federal tax system, which makes them part of debate. you want to hear whether you agree with that or not. could you comment on the philosophy of everyone should have a stake in the system? clearly, the number of people

pay no federal income taxes has grown. what is your thinking about being invested in the process? guest: the figure has grown over time, in part because of bipartisan policy choices, and the weak economy. the number one reason people do not pay any income taxes because their income is low. your wages go down, your hours were down. then as the economy declines, this number would also decline. host: most pay taxes throughout their working careers. how does the system changed so that they do not pay taxes when they retire? guest: people get in come in terms of social security checks but they do not have to pay taxes on that. in addition, there are some other benefits and that helped them out. a key thing about this group is

that it is not that this is a stable group over time. different points at different times in their life cycle will be in and out of that group. when you enter the labor force, you may end up in it. when you retire, you may end up in it. for the majority of your working life, you will not be. >> mike. caller: we did not pay taxes before 1913. why should we do it now? most of our tax dollars goes to funding wars. i would like your comment on that. guest: federal income taxes introduced in 1913. there have been some taxes than. the federal government has grown substantially since then. we have asked to do more activities, is a given amount of the fat -- of defense spending. most of the increase has been in programs like social security and medicaid, program designed

to help folks. with the growth of those, we need a way to support them. host: here is a chart from "usa today" that looks at this 47% that mitt romney talked about. this is the breakdown for different groups in our population. a call from memphis, tennessee. dolores is a democrat. caller: good morning. i was calling in to say, if a person loses their job, how can they pay anything? and as the last caller said, they are taking our money for wars. and no candidate has said

anything about paying for prisons. they have not mention that. host: thank you. with the record number of unemployed, people getting on the planet benefits, our unemployment benefits taxed? guest: it depends on your income level. the vast majority of people will find they fall below tax levels. host: you say people come in and out of this 47% over time. has it been affected by unemployment rates? guest: certainly, it is at the highest as it has been since the great depression. as the economy recovers, as wages go up, this number will naturally decline. host: before the recession started, do you have a figure in mind where the number was? host: we have that on our website, but i do not have it

with me -- guest: we have that number on our website, but i do not have it with me. host: bob is in pittsburgh. welcome to the discussion. caller: i want to ask if you are familiar with a process known as transfer pricing. corporations in the u.s. would sell products and manufactured to one of their offshore subsidiaries at a lower price, and then have the subsidiary sell that to another company at a much higher price, therefore reducing the amount of taxes, and maybe even pay no taxes at the offshore site, or little taxes. there is a very good article in "the pittsburgh tribune review" that most people should pay attention to and read. guest: one of the challenges is

you have corporations with international operations, they have an opportunity where they want to locate their process. not surprisingly, corporations like to locate their profits will -- where they will be leased tax. -- least taxed. not typically down to zero, but they would end up paying less than what you might think is the appropriate level. host: this is a map of the united states broken-down by state. what are we looking at here with a red states? the 10 highest non-payers, and why is it grouped geographically? host: i do not know. where is this from? host: it is from the tax foundation. non-payers by liability. these states, according to their

calculations, have the highest percentage of non-payers. is there a geographical difference? guest: absolutely. it depends on people's incomes. some areas have been hit more or less by the down turn. for retirees. all of that could drive these circumstances. host: so if there is a region that is more economically distressed, is more likely to contain more non-payers. next phone call, al in tennessee. caller: that may link the last guest to this one. the last guest seem to be making the point that we needed to make voting available for people who probably should be voting but do not have id. those are probably the people that are in that 47%.

if you take this argument -- i think mitt romney made this argument -- that this is predominantly an election about the producers, those that pay taxes, against the people that vote for a living, this is what this is about. the previous guest wanted to make available the voting ballots of people that earn a living by their vote, that is, their representative provides them with the things they need, nurses those who pay taxes. there are no producers out there in the economy without ids. they are leasing equipment, they are paying people to work for them, they are doing all sorts of things with id, and they are paying taxes. the people we are talking about do not pay taxes and may not have the id, and those are mutually exclusive groups. guest: my fall back would be to

look at the constitution, look at who is eligible to vote. i would be careful to draw any starke linkage between producers and non-producers, people in the 47%. a lot of people are in the 47% temporarily. when a young person enters the labor force, they may not be in this group. someone who decides to stay home with their kids for a couple of years may end up in this group. this person producing jobs may be in this group if he is experiencing losses. host: what is the threshold for paying tax, the amount of income you can earn before your obligated? guest: it depends on your family structure. typically, somewhere around $40,000 for a family of four.

host: for a single earner? guest: i do not know. host: an historic question about taxation. on twitter, the original income tax not reached down to the port and working-class. guest: it was originally aimed at high income folks. over time, its scope has definitely expanded. host: speaking of high income folks, one statistic i read, 24,000 people at the top of the 1% pay no federal income tax at all as well because most of their money is in tax-exempt bonds. guest: there is a small handful of people in america, someone with $100 million in municipal bonds for does not pay any federal income tax. but isn't for to keep in mind, the best majority of people who pay no federal income tax for

people with low incomes, elderly, or low to moderate income and have kids. host: next phone call from anita. caller: i have a comment. i think the democrats should push for mitt romney to show his income tax because of what he has been saying about those of us that are not paying any federal income tax. i worked for 30 years and i've paid all my taxes. i am on social security. i think he should provide his income taxes. we have to. i also think the comments that he made is very rude, just really insulting. i think the democrats should push for him to show his income taxes. host: we will let that stand.

next call is from alexandria, virginia. juan is an independent. caller: good morning. i want to make three brief statements. roughly 55% to 60% of the economy, studies have shown this. we collect about $3.80 trillion in taxes a year, most of it from individuals, not corporations. no. 3, 1 walmart setup a new store, the subsidies paid by the u.s. taxpayers. give me a break. revenue about $3.80 trillion? host: if you combine -- guest:

if you combined state and federal taxes. a ultimately, the burden has to be borne by some human being, so that is individuals one or another. host: if one group does not pay federal taxes, is there another group that does? guest: if you are a worker, you are paying directly. in addition, your employer is paying on your behalf. all economists believe that is coming out of your paycheck, so we should credit you for that. it turns out there is a lot of evidence that the corporate income tax, a portion of that comes out of wages. we think you ought to give people credit for that as well. and then there are excise taxes, gas taxes, cigarette taxes. host: this story about tax policy -- on the cigarette tax, it suggests smokers spend 25% of

their income on cigarettes. over time there has been an increase on taxes for cigarettes for the hope of changing behavior. here is the story. the poor pay $600 million in cigarette taxes and get little help including. mr. sanders says statistics show smokers earning less than $30,000 a year paid 39% of state and city taxes on cigarettes. he added more of the revenue should be used to finance smoking cessation. so higher income people pay a smaller portion, will appear smokers, those earning $60,000 or more, pay 2%. donald marron is our guest. we are talking about taxes and who pays them. bill is a republican in florida. caller: hello, how are you. it seems to me, one of the

problems we have is we do not separate the welfare system from the income tax system. what we're doing is we are giving welfare to people through the tax system. if we would let everyone pay their fair share or whatever the tax code requires and then have congress separate, and instead of giving credits in the tax system, send people money for having children, etcetera, then we would better understand where the money is coming from and who is going to. host: are you referring to the earned income tax credit? caller: earned income tax credit, credit for having children. no one makes people have children. we just decided that we should give credit to people that have more kids. host: in certain cases, these bills were championed by republican administrations. you are republican. your thoughts on that? caller: the not become an independent for the subject.

i hate to be pigeonholed. i like to tell people, tell me what subject i'm talking about, and then you can pigeonhole me. guest: this raises an important point about our tax system. the caller suggests we run an enormous amount of social and economic policy through the tax code. the tax system is not just a way to collect revenue to finance government activities. it is also a way to help low income folks, and there is a whole litany of other things. we subsidize housing for the mortgage interest deduction, we subsidize health insurance, on and on, solar panels. frankly, that does but the caller suggests, confuses discussions of what the federal government is up to. the line between taxes and spending is often rd to draw. for things like the earned income tax credit and the child

tax credit, those are, primarily aimed to help low income working families. frankly, the irs is in the business of collecting information about their income. so it makes a lot of sense to run those programs to the irs, since they are in the best position to decide who qualifies. host: this is a e-mail question. why do we withhold taxes for those, based on earnings, where they would otherwise not have to pay? host: we like to have this system caller:when yoguest: policd researchers are trying to figure out ways, particularly for the eitc, to get it in advance. it is something that people are working on.

host: next phone call is from joe in connecticut. caller: even though i'm a democrat, i do believe everyone should pay something. so iti believe there should be a base, maybe 5%, that everyone should be responsible for paying to the federal government. i called because i wanted to explain the difference between your gross income and your adjusted gross income when paying taxes. for example, by the time i am done taking my deductions and credits, the government pays me money, which i feel is wrong, but that is the way it works out. we are supposed to have an alternative minimum tax, but it does not seem to apply to many people. if you could extrapolate on those ideas, i would appreciate it. guest: we have a very complicated tax code that has lots of deductions and credits

and exemptions and exclusions for all sorts of activities. that is why turbo tax is in business. it is the way policy makers like to encourage particular types of behavior or were people who do particular things. it does mean that certain people end up, even though they have earned income, they end up in a situation where they do not owe any taxes. again, mostly that is because people have low-income, our elderly, or have moderate income and children. but some people give enough to charity and have big enough mortgages, when you put it together, they can get their tax rate down to zero. that is the exception. host: the history of the alternative minimum tax? guest: there were a lot of people in the 1960's who were earning a high income and would not pay tax. this was set up as a secondary tax system.

this has been expanded since. every year, our friends in the capital do an amt patch to keep it from apply to many more middle income folks. if we go over the fiscal clip at the end of the year, this will begin to apply to millions of more americans. host: what is your sense about the level of interest in this town about fundamental we visitation of our tax code? guest: just about everyone in this town recognizes that the tax code is broken, it is too complicated, it is not fair, it has this weird feature that large portions of it expire at the end of the year. the hard part is getting people to agree on how to fix it. people often talk about lowering rates, which is a popular talking point for both republicans and democrats, but to pay for that, you need to broaden the base, all that these

tax cuts, and then once you get into the specifics of that, it is hard to make politics work. host: going back to the question of people with no taxes. on twitter, the government gets to use the money for a year. guest: that is true. with interest rates so low at this moment, this is not much of a benefit to the government. host: south bend, indiana. good morning, tom. caller: it is interesting to hear the democrats and republicans as they call in on tax issues. i think we all tend to agree more than we think we do. my question is not so much in the area of policy but more politics. how likely is it that we are going to be able to make tax policy and issue, not only in these debates, but in the rest of the presidential elections?

as it is, all we hear is the same old slogans. with governor romney's comments, i wonder if you thought there was any way to use that for a platform for broader tax discussion in the presidential election? guest: i think taxes will be a big focal point as the election winds up. we have a looming fiscal cliff at the end of the year which involves a lot of expiration's of tax cuts. we have two candidates that have led a different vision for what they think the tax system should look like in the future. obviously, governor romney's comments has rekindled interest in how tax divisions affect people at lower income levels. i think all that will be fodder for a healthy debate about tax policy. host: two e-mails with similar themes. this one is from massachusetts.

just to clarify earlier, you say that is a small number of people. guest: if you are looking at the 47%, very few are people that earn $200,000 or more, so they really are an anomaly. they can exist in our system. someone who has all of their wealth in tax-exempt bonds, someone that has gigantic itemized distant -- deductions, so that can happen. do not get me wrong, there are plenty of tax breaks that benefit high income folks. tax breaks for investment income. many are linked to the marginal tax rate you pay. there are plenty of benefits they get. but in terms of are they paying or not, that is really a debate about low income and moderate income folks. host: next phone call is from tina in fort myers, florida.

in democrat. caller: thank you for taking my call. your idea about mr. romney's statement, 47% do not pay taxes , people do not pay taxes at all on social security or the income that you learn from working. it is so low. my husband and i earn perhaps $60,000 a year, which comes from military retirement. he spent 30 years in the military. we pay income tax on that. each month, some of it is taken out. at the end of the year, we owe more. at the end of the year, it is

all lumped together. my husband works 30 hours a week, he pays taxes on that. then we also get social security. we pay a tax on that. altogether, that pushes us up. and then we owe the government $2,000 at the end of the year most of the time, and then when you fell out your forms throughout the year for working, when you sign up for social security, the whole idea that people do not pay taxes on their social security is ridiculous. you have to have earned a very small money authorize your lifetime to not have to be able to pay income tax on your social security even. it is so insulting to so many people. we spent 30 years of our lives

in the military. there is this man that had everything handed down to him on a silver platter that has no idea what a real person goes through. and he wants to be president? even the gentlemen that is on now, -- gentleman that is on now, -- host: he does not work for the government. caller: ok, i got that part wrong. i thought he was with the irs. we do not make that much. we do not consider ourselves rich. host: the overall tax burden? guest: the caller points out that she and her husband pay taxes. that is normal. $60,000 a year.

the majority of folks in that range pay income taxes. if they are working, payroll taxes. i want to once again drive home this point, of the 47% that have gone so much attention, books have been nothing in federal income tax in a particular year. almost two-thirds of those folks as a result, many of them end up paying a net amount to the government. even if they are not taxpayers in a given year, many were in the past before they retired, where can expect to be in the future when their incomes go up. host: with is the percentage of people in society that make over $250,000, which is always the line of demarcation in tax debates? guest: it depends on the exact measure but around 3%, 5%. host: next phone call for donald marron. troy, michigan. don is an independent.

caller: hello. i contend that nobody actually pays any income tax. in this country, when you fill out your tax form, everything is based on personal decisions you have made. not based on your income. if it was, everybody who made $40,000 a year in this country would pay the same amount of federal income tax. we pay personal decision tax. nothing is based on your income when you get down to it. a person with five kids pays less than the person with one kid appeared that is a personal decision. that has nothing to do with your income. same thing with buying a house. same thing with all of these exemptions on tax forms. if they want to make the system fair, they should not make your tax based on your decisions. i will take your comment now. host: sound like an argument for

the flat tax. guest: this is one of the arguments that leads to the flat tax. as the caller said, the government makes an, an enormous amount of social needs policy through the tax code. many tax codes for having children, getting a mortgage, health insurance, whether you put solar panels on a rooftop, on and on. basically, folks in congress have realized this is a good way to provide incentives for people to change their behavior, but it is also what contains all the complexity in the tax code. people often talk about a flat tax would be desirable because there would be one blow, flat rate. the most interesting thing about a flat tax is how you can have your taxes on a postcard. the only way that you could have that in principle is to eliminate the vast majority of deductions, exemptions, and other purposes, and do something along the lines of what you

suggest, which is just to tax a broad level of income. host: if you look at the broad history of tax income, is there a period where there was a great flurry about decisions about deductions? guest: there was in 1986, the last time in major reform. that was very much one of these opportunities to reduce rates while broadening the base, rolling back a variety of tax breaks for businesses and individuals. since then, what we have seen, congress people have seen this is a good way to make policy politically, so we've seen an expansion of these things in the last couple of decades, giving us the complicated code we have today. host: next phone call is from st. petersburg, florida. alan, welcome to the conversation. caller: yes, i would like to make a comment about a fair tax on your program.

host: go ahead we are listening. caller: we talk about the vat, flat tax, income tax, but nobody seemed to be talking about eliminating the income tax by going to a consumption tax, which had been commonly referred to as declared tax. h.r. 25, as a house bill, never gets to the floor. it has the benefit of eliminating the income tax. it makes your gross pay, your take-home pay, it attracted jobs to the country because we become a tax haven for the world. it makes us globally competitive. this whole thing could stimulate our economy. it would increase our revenue to the government.

we have 40 million visitors coming to this country who would start paying on a consumption tax. that would be additional revenue. plus, the fact that it would raise prices at the retail level no more than 1%, if that. i never hear that discussed. i wish someone would discuss it. thank you. guest: i am happy to discuss the fair tax. for those of you not familiar, a proposal to introduce at the federal level a retail sales tax, similar to what many states have, but hopefully designed with a much broader base. in essence, a consumption tax. the other most famous consumption tax is one of the nations have, the value added tax, which is a close cousin, but the tax is collected through the supply chain, not in retail. there are a lot of good arguments to move to a fair tax. the income tax is quite progressive where the others are

not. if you're concerned about the tax code, you have to figure out a way to figure out the progressivity. in terms of the fair tax itself, it turns out there is a problem designing it as a retail sales tax. if you think about the rate you would have to charge, estimates run 20%, 25%, perhaps higher. that creates an incentive for a lot of people to avoid it when they are doing their retail transactions. if you look at the rest of the world, every other developed nation in the world has a value added tax, rather than a national retail sales tax. the key is, a value added tax is much easier to enforce and a better way to avoid tax evasion. host: a question from cspan junkie. let me just the construct this.

social security is taxed at what point? guest: social security benefits are taxed for some folks when they receive money in retirement. a majority of the benefits he received are not taxed. some are for high income folks. host: so they may have alternate retirement income from another source. the combination puts them over the threshold. guest: on some. host: roth ira, the discussion of those should be taxed. guest: traditionally, you are exposed to federal tax when you take it out. roth ira does the reverse. you are exempt from taxes when you remove it later on. this creates the political risk that the person is asking. can you trust the federal garment not to tax roth ira contribution several decades in the future? that is a matter of political

prognostication. there are certainly few politicians that have discussed that today, but if you think about undertaken federal tax reform in the future and if you think the federal government will be more revenue in the future than in the past, there is a chance that will end up on the table. host: jack wants to add this to our conversation. an exemption for children makes sense. they are future taxpayers, earners, and military. shortsighted otherwise. just a few more minutes with donald marron. next phone call is from huntsville, alabama. virginia is a democrat. caller: thank you so much for c- span. i wanted to say, mr. marron, on the screen -- it had alabama up there. we were in red, saying we do not

pay income taxes. i worked for over 40 years. i always file the long form, itemized. i have three children. i always have to pay the government. before that, i would claim 0 exemption so that i would not have to pay the government. at the end of the year, i have to write a check. now i am retired. on my annuity, i still have to pay the government anywhere from $2,000 to $3,000 a year from my retirement. not only that, i have asked them why i have to pay taxes on my annuity when i have already paid taxes. they said, because your annuity checks, you have to pay taxes on that. i never got to claim any earned credits -- not earn credit, i'm sorry.

my children, they were adults when president reagan past that in 1986. for a senior citizen to pay taxes on their lives and then have to pay again on their annuity, it seems to me, unfair. we look and governor romney, a billionaire that does not have to pay taxes. president obama had implemented a bill, when you become a senior and you receive $50,000 a year or less in your annuity checks, you would not have to pay income taxes. host: i am going to jump in. do you know about the legislation? guest: i do not know about that particular legislation. there are programs available to provide tax relief to senior citizens, a variety of tax breaks, including exempting social security from tax benefits. host: we are coming to the end

of the top of the hour. cape canaveral, florida. caller: first of all, we definitely have to simplify the tax code. no matter what income you make, we should all pay something. i do not care whether it is $50 a year for the poor and then go up progressively. everyone should feel like they are contributing. i also do not feel -- understand why churches are tax exempt. people who open these ministries just for the sake of knowingly do not have to pay taxes. i am a christian, but i do not know why churches are tax- exempt. and closing loopholes. there are so many confusing loopholes.

we need a straight for, a simple tax code. everyone should pay. no matter how little or how much you have, something there, so that we all know we are contributing. host: thank you. when she references religious institutions being tax-exempt, we move from the personal to the corporate income tax. what is the philosophy of nonprofits and religious institutions being tax-exempt, and is that under debate in washington? guest: it is, particularly around the edges. how do you draw the boundaries between a non-profit and a business-like activity? one of the things congress people have been concerned about is some nonprofits, including some churches, have aggressively expanded into things that look the business nativities, and there might be a need to redraw the lines so that the activity only goes to their core activities. activities.