on time. we have ailson frasier, director of the institute for economic studies at the heritage foundation. as director, she oversees the heritage foundation research on a wide range of domestic, economic issues, including federal spending, taxes, the debt and deficit. before joining heritage in 2003, she was deputy director of the oklahoma office of state finance where she worked for governor. next, rudy penner, the institute fellow and the rj and francis miller chair in public policy at the urban institute. prior to that in his long career, he was director of the

congressional budget office where he supervised a young economist who did not learn a whole lot from them and that is what i am here rudy has had a distinguished career he has had. i remember those conversations. i hope i can do them-just -- i can do them justice. finally, we have david walker, founder and ceo of the comeback america initiative. he is formally the comptroller general of the united states. he was also the head director of the u.s. government accountability office for almost 10 years. he is widely read and has written numerous articles on the debt and deficit. he has a new initiative which makes tremendous sense.

his new group is looking at the efficiencies, inefficiencies, duplications in the government to try to find areas where we can save money without cutting. it is a very interesting initiative, one that you ought to look into and see about supporting. i hope we he will mention it briefly in his comments today. i will turn to the panel and sit-down and we will start discussing hopefully some of these issues. [inaudible]

>> the short run problems of the fiscal cliff, but we're going to do with this debt and deficit issue and take time to summarize how we should look at these issues. i will start with david on the far side and move right across. >> thank you for coming. first, there are common denominators between the challenges at the federal, state, and local levels. some are inadequate but the controls, escalating health care costs, huge unfunded and off balance sheet obligations and outdated tax systems. other factors -- demographics, and infrastructure, state of the infrastructure, etc. with regard to the federal government, there is a lot of attention on the so-called fiscal cliff. i think here everyone knows what that relates to.

that is really more the system. it is not the disease. but washington typically does, it focuses on some things rather than the disease. we need to avoid the fiscal cliff. we need to recognize reality. there is only so much that can be done the balance of this year. we need to do a credible down payment and build a bridge to a grand bargain which would involve more fundamental reforms that have to be achieved. but it controls. -- budget controls. we had but the controls until 2002. we had been out of control ever since. we have had democratic spending policies of republican tax policies which leads to large escalating debt. we are going to have to reform the social insurance programs. we have to reduce defense programs and other spending and the gate in a comprehensive tax reform. that takes time.

it will have to of all -- involve extraordinary presidential leadership, which we have not had in a while. hopefully we will get that. it will involve some type of citizen engagement. the good news is i recently took a 27 state national fiscal responsibility bus tour round the country focusing on swing states. a representative group of voters did the following after they heard the burning platform case about where we are -- 97% believe putting our finances in order to be a top priority. 92 percent agreed on six fundamental principles and values be exposed to them for guiding a grand bargain. 85% agreed it would take a

combination of spending reductions and additional revenues. and least 77 percent agreed on a range of fundamental reforms to but the controls, social and service programs, health care, defense, taxes, business and political reforms that are needed to put us on a more prudent sustainable path. people are disgusted with a lack of progress. they want results, not rhetoric. i am in town for private meetings on the hill and the white house. hopefully sanity will prevail and build a bridge to something that is transformative. in the final analysis, we are all in the same vote and share in the commonalities. we need to work together to solve his problems to create a better teacher.

-- better future. >> i have no idea what is going to happen with the fiscal cliff. i have an uneasy feeling that president obama and speaker boehner do not know either. it is a huge possible fiscal shock. it would be one of the biggest negative fiscal shocks we have had since world war ii. the only thing that is comparable is when we had in vietnam surtax applied after military spending was already falling. falling office cliff would mean a recession. i think it could be much worse than cbo implies. 1, the economy is very fragile right now and vulnerable to a secondly, i think it has a horrible psychological impact on the business community and

consumers who would totally lose confidence in our ability to govern. i agree with david that what we need right now is a downpayment, making some progress. one that probably involves the tax and spending side. and the pledge to do much more later. the important thing to know about the proposals on the street right now is that you can accept everything in the president's proposal for everything in speaker boehner's proposal and he would not solve the budget problems in the longer run. in my judgment, you need about twice what they have put on the table. i'm very troubled by the fact that we are giving the impression that we can solve

this problem without imposing much pain on the middle-class. the president made that very explicit. he promised never to raise taxes on the middle class. of course the republicans would back him up on that. there is no way mathematically you can solve this problem without giving something. that has to involve the middle- class. that is where all the money is. as for the point about building a bridge to the bigger solution, i think we have to. i am not clear how we do that. how do we pressure the congress to returning to the issue and avoid the cliff right away? that is very hard, i think. we have had these mega triggers of this sequestered. we thought surely the super committee would avoid this

totally irrational thing. because they would avoid it and come up with something more reasonable, but of course they did not. that is what is that -- what has left us where we are today. it did trigger did not work, what would work? i've become pessimistic that we can think of any action forcing mechanism. >> thank you. alison? >> thank you. i am delighted to be here. i want to talk about some basic the discussion we're having today is not about that this booklet at all. the fiscal cliff is more than -- is not about the fiscal cliff at all. this fiscal cliff is about other things. there are a number of things that need be addressed.

this discussion really is not about the fiscal cliff, per cent. congress and the president can come together quickly and pass a bill that would put off the fiscal cliff, he there for some large amount of time or even indefinitely. it really is about making a down payment on closing deficits in the future. i would say it is also really about the president's campaign not this -- not just this past election but his first election to hike taxes on the successful. we have to see some real leadership on the longer-term budget unsustainable issues. what we do not need is negotiating in the political theater. when we see that stop, that we know we will be serious about

whether we will resolve the fiscal class -- cliff and have some large down payment. when it comes to republicans and conservatives, there are three things to bearer in mind. one is the house republicans they were elected to cut spending and not raise taxes. that is one of the reasons it is hard to move toward. -- for word. there are a number of revenues that would be acceptable to conservatives. the first one is one that speaker boehner put out almost immediately after the election. that is revenues to a stronger economy. that seems to be a table -- to be acceptable.

also acceptable would be a way to reduce subsidies. you could see more premiums for things like flood insurance, pension plans and so forth. these are acceptable type of revenues to conservatives that are not getting a lot of discussions. also are forms of privatizing. we talked about public-private partnerships in transportation, and for structure. -- and infrastructure. also all kinds of ways we can undertake a program of sales and other services to generate revenues to the federal government that would be conservatives. we could go without access to energy sources -- open up access to energy sources. the new revenues must not be used for more spending and used to reduce the deficit. how we would lock that in my

rather a failure, i do not have the solution to. it is important to note there are revenues that are acceptable to conservatives. that leads me to the otherour long-term issue really is the spending issue. to the extent we have tax revenues low today, not because of the rates, because the economy is underperforming. the economy is quite weak right now. we should see much stronger lower. we want to see policies put in place that strengthen the economy and also begin to tackle this longer term spending issue we have driven primarily through entitlements. when it comes to those, there are a number of very broad, bipartisan support of the

recommendations easily available to the president and speaker boehner and other leaders want to come together and get serious about making a down payment on our fiscal future. that leads me to the fourth issue -- it is possible to solve this without raising taxes. i know this because at the heritage foundation, we have done this as part of the product by the petersen foundation. plan. i have it right here. shameless promotion, i know. it is a choice. maybe a political one, but not economic. we balance the budget within 10 years. even warren buffett, who is been a champion of raising taxes on the wealthy to make sure they pay their fair share, would not raise revenues over 18.5% of gdp. so we need to think about is it necessary, if you get more

revenues, how do you ensure they do not go to more spending? what are we talking about taxes right now women have a spending problem? -- when we have a spending problem? that is what i would like to offer at. >> thank you, very much. it is interesting that when you look at the exigency getting something done, it really is artificial. we have a date that congress put out there. that is what we have to act by. if we do not, we go off a cliff. i'm not suggesting by any stretch that we ought to do that. i am suggesting there is hyperbole on both sides to say we have to act now. they see this as a gate that should not be wasted. -- as a data that should not be wasted.

a crisis that should not be wasted. i am afraid that in rushing to judgment over an artificial date shift. i am not suggesting we should go off the cliff. policy. but these artificial dates have never produced good results. in order to create something that was so draconian it would never happen, we have to deal with it. back in the depths of the financial crisis, we put in a program that some people said would cost $700 billion. the banks have paid back, and they have done so with a profit. aig is now going to unwind its federal relationship to the tune of a profit to the federal government. many people were very skeptical that would ever occur. putting out these artificial

dates, i think sometimes we give this policy a short -- people alluded to the fact we have to have a bridge to the future. that is a recognition we are probably not going to get a big deal in the very near future. we know the pieces, but the negotiation might take longer. is there something out there we are missing that we should or could do to ensure that whatever we decide to do does not go to waste and does not get lost in the shuffle down the road? is there something we are missing that we should do that we could do to hold people's feet to the fire? >> we ought to talk about what might be realistic. given the clock is ticking. you have to look at what is set

to expire. i would suggest the payroll tax cuts should be allowed to expire. it is $127 billion. it is not needed. in addition to that, it sets a terrible precedent to general revenue financing of social security. secondly, you clearly do not take place. allow some of it to take place. we have got to patch amt. we have got to do something pending more fundamental health care reforms. the president talks a lot about balance. i would suggest that is the wrong term. we need a comprehensive

solution, not a balanced solution. balanced implies 50/50. it should be weighted towards spending. tax expenditures, they are back door spending. if you reduce tax expenditures, even geared toward the "wealthy," then you reduce spending and increase revenues. 95% of people who voluntarily sign up for voluntary programs for medicare get a 75% taxpayer subsidy irrespective of their income. if you move towards premium support, that will generate more revenues, but it will count

as a spending reduction under government rules because premiums bought from medicare beneficiaries count as reduction in spending. if you look at indexing formula as that end up affecting both the spending and revenue size, dealing with inflation or otherwise, you can do things that are structural that can slow spending as well as generate additional revenues. that. recognize reality. the budget. soon. the states do not do it either. it is not a balanced budget. they are using cash flow. they are not using accrual. what we need to focus on like a laser is debt to gdp. i think realistically, what ever you do not let expire, you

extend to the end of september, along with the debt ceiling limit, so you have all things coming together at once with a more realistic mechanism, because the nuclear device did not work, the super committee was a super failure committee, and therefore we have to recognize those kinds of devices will not work. you have got to have something that is more pragmatic. the fiscal cliff has gotten more pessimistic almost every day. we really cannot go over it. there is one thing that gives me a little hope. it seems to me there are three things we almost absolutely have to fix. one david mentioned, the alternative minimum tax.

right now, we have to fix it retroactively for 2012. if we do not do that, there will be over 25 million americans who will get a real shock when they do their tax returns. early. i am told they are not prepared. -- the irs is not prepared for the consistency or fixing datethey have to reprogram because they have to reprogram their computers. all sorts of other things. the other thing is that i cannot and imagine we will allow reimbursements. there will not be 50 doctors serving the medicare program. thirdly, i really think we have to fix the estate tax, which exemption. -- which goes back to 8 $1 million exemption.

in my neighborhood, that is a house. i would strongly recommend that die in 2013. [laughter] i said that at an earlier meeting and a congressman responded, but you should commit suicide in 2012. [laughter] so, i have the hope that if we could really concentrate on fixing these things, then we could cover more areas on the revenue and spending side. david is right. we do have these things that should encourage us to do something. the debt limit. i would add to that, he did not revolution. -- resolution. we know it expires march 1. we have a coming together of these things that should provide a very strong incentive

to get something done in the longer run. >> i would echo just about everything you guys have said. i think the fiscal cliff is this false deadline. this is a crisis that is entirely created by congress and the president. you pick the right four things. the amt, unemployment, extended benefits, and i think there is a little more wiggle room on that one, but it is an issue, and the state tax. these things are critical. they have to be done. they will have to make some sort of decision as to what to do on the sequester and tax policy. my recommendation would be they simply extend all current policy with regard to those two.

they are running out of time. hawaii shortly. it is not the time to go through complex policy issues because you will give them the short shrift. they should accept them. -- they should extend to them for some period of time like them the more hard deadlines when issues need to be addressed. these are strongly agreed to by partisan issues, raise the retirement age for medicare. take care of reducing subsidies and medicare by testing premiums, at a premium for part a.

then there is further means testing that could be done in social security through a progressive indexing and things like that. those are the things that have been talked about around town. quickly. december? policy. the important thing is that this makes a substantial down payment for long-term sustainability. to focus on 10 years, while important, it gets to those cash flow issues, it does not necessarily deliver the kinds of reforms that will be reducing our debt to gdp ratio and stabilizing it. i to not know why we are not hearing serious conversation about this from the guys negotiating. some of these things were included in the president's own budget. have liked. simple things to do.

easy to do in a bill. why don't we have a conversation about that? >> part of the problem is if you only extend the four things payment. you are not going to extend the tax policies. that will not happen. >> no down payment now. what i am saying is you have to do some of these other things. >> i would love to see that. >> let me tell you my concern. i do a lot of talking inside and outside the beltway. i am concerned liberals have misread the election and are overreaching. there is no question the president campaigned on more revenues and more share for the wealthy. it is legitimate.

to say he has more than that is not credible. what we are hearing right now is grand bargain-type numbers on revenues but not with regard to reforms in spending. by either partythey are talking past each other. the president said, we want to reach marginal. tax rates. the fact is you generate more revenues, you increase the effective tax rate of the wealthy more than going back to old tax policy. it is more politically acceptable for republicans to go that route. it is more in line with comprehensive tax reform, which is where we need to go. i am concerned they need to get real and focus on avoiding the cliff. they need to set targets for the grand bargain and focus on debt to gdp.

>> i agree. optimistic. [laughter] i think david is right, the other side has become much stronger against any kinds of reforms to entitlement. recently. groups have really come up very strongly about, do not touch my social security, medicare, medicaid, and so forth. what we have to do, one thing that bothers me about all of this, if you really project where we are going to a sovereign debt crisis, which seems to be inevitable if we do

not change these policies, the people who are really going to be hurt are the poor. 25% unemployment in greece and spain. imagine what the minority unemployment would be if we had a 25% unemployment rate on average in the united states. we see pensions being cut without any notice hardly at all. social programs slashed. there is at least some probability that will happen to us. i will say it is a certainty eventually if we do not do something about the situation. i would think they would be much more sober in their demand. at this moment, i do not see it. >> i would say a lot of this is, if we are talking inside the beltway, that is a different conversation.

part of the disservice is the debate is having today is it is steering away from what the real issues are, the most depressing issue, i am more optimistic. it is steering the conversation away from that. it is not helping ordinary americans understand what the threat is over a somewhat longer term. i do not think we have 25 years anymore. maybe it is two or five. we get closer and closer every year that we build up our debt and every year that we postpone tackling entitlements.

>> we had a political -- someone who ran the congressional budget office, somebody who has worked in the state budgets, people who can count, which is always a disadvantage in discussing federal finance, and yet, we come up with a consensus of things we all know we need to do. i am being a little bit provocative here, but i am worried about the fiscal finance in this country because i think we are getting a real break because europe is having the problems they are having and, as a result, the world has excess savings and are doing the investment and do not have a great choice.

they look at us and say, we are better. interest rates fell. we are living on borrowed time. why they are playing political games when there is such a real issue. we are self-dealing in our own debt. >> the federal reserve is the largest holder of u.s. date. purges in over 70% of all new u.s. debt issuances. if you look at people who are buying our debt, their appetite is getting less, not greater. they are buying short-term debt because of huge interest rates risks.

if you look at china in particular, they are looking for corporate bonds rather than u.s. treasury securities because they do not like what they see. we are living on borrowed time. we have created another bubble. my view is the reason the fed is doing that is because the mandate was changed in the late 70's to where they have to be concerned with unemployment. we need a fiscal deal. the fed is the onlythe fed has to change its policy unsustainable over time. >> right. >> one of the most successful physical consolidations in the developed, democratic world in canada, in the mid 1990's, and i ask the canadian politicians how did you do it? the public went from cheering

on spending to deficits within a matter of a year or two. the government in canada now risks some peril if they do not balance their budget. the answer you most frequently get is all they had to do was say, 40% of revenues was going to pay the interest bill on the canadian debt, and the public immediately realized that was not a great idea. we cannot make that argument. we run these massive deficits and because interest rates have gone down, the interest bill has barely moved at all. that. even with the modest projections in terms of the interest rate increases they see

over time, we are going to quadruple our interest bill in 10 years. hopefully, that will get attention. i almost regret the fact markets have not reacted more negatively to what we are doing than they have. >> if you are looking at $16 trillion debt in total, and interest rates at rock-bottom levels, if they go up 2.5%, you are looking at $500 billion a year in interest costs, which, the total deficit is $1 trillion. you are looking at increasing that by 50% if interest rates go back anywhere near their averages. you are right. do the math. again, i was asked in a panel, somebody said if i could change anything out there on the tax reform, what would it be?

i said, the understanding of the american people. the average american does not understand the tax code and they do not understand what it is or is not doing. the headline was that i called the american public stupid. i did not. they are not, this set of all of what is in the tax code. they are equally not cognizant of what is in the budget issue. they think you can balance the budget by cutting. foreign aid. i have seen a lot of educational initiatives go on, but they do not necessarily seem to have any legs. how do we get the american public to understand the debate we had here today? debate. >> alison and i participated in a fiscal wake up tour. a fiscal solutions tour. now we are doing the next

generation of that. we did in september and october of this year. what you have to do is build a burning platform. you have to understand the kinds of polls most politicians listen to our superficial and grossly misleading. when the public is asked, do you want to work longer for social security? do you want to pay higher premiums for medicare? do you want to pay more taxes? what do you expect them to say? my point is, when you build a burning platform case, which can be done in 10 minutes, and i have done it thousands of times, they get it. that is when you get 97% off to be the top priority, 92% agree on the principles, 85% weighted towards the spending, so what does that mean? the biggest deficit this country has is a leadership deficit. we do not have leadership from

our top political leaders. the president needs to use the to build that case. we need to take a book out of bill clinton's presidency in 1998 where he used this type of approach to be able to prepare the way for social security, and for this case, grand bargain. that is what needs to happen. let me give you three simple ideas for congress. no budget, no pay. i am serious. this is one of our mantra. if you do not pass a budget by the beginning of the fiscal year, you do not get paid until you do, and there is no retroactive pay and. california did it. it is the only thing in the constitution they are supposed to every year and they did not do it.

number two,had a behavioral impact. no deal, no break. starting in 2013, they do not grand bargain. these people get seven times more days off than the typical american. money. thirdly, every member of congress should be required to prepare their own taxes. everyone should be required to prepare their own taxes because if they had to do it, they would wake up and we would get tax reform lot quicker. i ask people who prepare their taxes, less than 5%. as the governor knows, a lot of people, i do not get deductions but for two things. interest's on a home mortgage and charitable contributions. nothing for state, local taxes. gone.

g-o-n-e. people need to recognize where we are and change incentives. this effort. on the other hand, when you see the kind of information the general public has, one almost has to weep. one way we totally confuse people these days is with something called the baseline. the definition is in the law. they have to assume all of these tax cuts expire.

that is so ridiculous, most of us use other kinds of baselines. we use a current policy baseline, which extends all of these tax laws. more recently, everybody seems to be able to choose their own base line. [laughter] the president has his own. very peculiar baseline which takes credit for ending the war is. bowles-simpson, as much as i admire what they did, they had a rather odd baseline, too, which assumed we did not continue tax cuts for the rich. no wonder the public is totally baffled by all of this. if you look at the british austerity program, they do not compare it to what would happen if you continued.

they compare what they do now to what they did last year, a really radical notion. it is quite a bit less generous in that. whereas we, when we talk about reforming social security, talk about cuts and benefits, when all we are doing is slowing the growth. if you look at the bowles- simpson proposal, the benefits for everybody continues to increase over time, not as much as for the lower income. -- not as much for the affluent as the lower income. we are so confused, it is surprising they have the vaguest notion of what is going on. >> you see this reflected if you just look at simple polls. it is confusing. you hear tax cuts.

we are not talking about tax cuts. we are talking about preventing tax increases. they hear all of this fighting. if you go out and engage in the public outside of washington, you have to get people who are working to take time out of their busy schedule. that is hard to do. these are really complex issues. you cannot boil them around to your little sound bite. you have political leaders who are afraid to tackle major problems that involve benefits that will at some point affect everybody in this room and everybody in the country. that is hard for them to do and it is easy to demagogue it. the one thing we should take out of it is the public is pretty disgusted at the way washington is broken down into

total disrepair. the fact that you are not having a serious conversation on the part of the leadership, all three parts, about the fiscal cliff is a major part of the problem. we just had an election. we cannot stop campaigning. we have got this deadline. the debt is not artificial. no wonder the public tunes out. disgusted. if there was a mandate, the mandate was since the republicans returned to the house, the democrats to the senate, and the president was reelected, the mandate is, start problems. questions.

put your hand up, get the mike, identify yourself. and the fire away. go ahead. >> my question is, what advice do you have [indiscernible] that for organizations that provide insurance to the poor? we are looking for alternatives for the future. >> anybody want to jump and? >> government has grown too big, promised too much, but it is not too late. the charitable sector will be more important, and individuals

will have to take more responsibility for their future. charities need to have that reality and figure out what they can do to improve their role and retain some level of support for charitable contributions. promised the poor. the middle-class. mainly the middle-class elderly. our expenditures are squeezing the life out of the rest of the government. i think advocacy groups for the poor should be among the strongest proponents of fixing these major entitlement programs, medicare and social security.

we can do that without impacting the poor hardly at all. in fact, not at all. >> i think we have a myriad of anti-poverty spending programs in this country. they do not all have good outcomes. as groups think about these issues, it is important to focus on outcomes, streamlining programs, and on ways we can strengthen civil society and the partnership between private charities and the relationship with those they help. the government is going to have a role. we want to have a safety net. we do not want incentives to remain that lead to further instilling low income. the unintended consequences of great society programs. by separating a reciprocal

arrangement, welfare in exchange for work, those are things that further implicate behaviors that keep people in poverty. not only being engaged on the spending part, what are the policies that are married to any of the spending programs that are important that will help more people get out of poverty. the only other thing that would go along with that is making sure we have programs put in place to meet fundamentals get the economy growing as fast as they can to get more people back to work and to have better wage growth. question. please?

>> one fast comment. david passed a law saying -- we passed a law saying legislators do not get paid until they pass the budget. in a new york. it became a problem. -- it never became a problem. it's true. my question is the fed has an enormous amount of assets. if they were to let interest rates go up, the decline in the value of those assets would have a more shocking impact on our economy. is that not true? how do we ever get out if the fed is continuing to buy these financial assets at the quantity they are doing it now? how do we ever get out of that mastaxsecond, i agree with everything you all said.

problem. our politics are. -- the way politics is financed. there is such an amount of leverage on this process and those are the ones who are not compromising and they are driving, in addition to the lack of strong political leadership, they are driving an extension of the stalemate. question. term. they hold some long term and that is staggered. billion a month the fed is repurchasing. if they just stopped repurchasing it, they would start to unwind that balance sheet very quickly. the banks have read deposited the proceeds of those funds and are getting paid 25 basis points.

the fed can change that as well and unwind the bank's willingness to do this. just the run off would allow the fed to very quickly reduce their balancing if they chose. right now, in terms of keeping the economy going, the fed is the only ball game. what they are trying to do is not create lending by the bank at the retail and local and business level. what they are trying to do is recapitalize the bank. they are subsidizing the banks through the repurchase arrangement they engaged in. year. that is an issue that is outside the issue we talked about here. it is one for another seminar on the fed policy. that one. >> i would respectfully suggest

no retroactive pay. they might be able to borrow money for cash flows, but they lose the money forever. >> a couple of points on the fed, i would not worry about the capital losses on the balance sheets. the central bank in the philippines had a huge negative equity. the central bank can go on positive equity. they have all sorts of tools they can theoretically use other than having to unwind their balance sheet. they can increase reserve ratio, the interest rates they pay on excess reserves, and so on. they have a lot of control. that makes me less worried about the fed's balance sheet. are doing recently. fairly easily.

this massive fed undertaking, in almost a desperate way, gets at the underlying problem. issue. it is a fiscal policy issue. we have a lack of leadership. the threat of the tax policy expiring all tax policy, much of which has been in place to over a decade, has been a congressionally made thing. congress refuses to work on it until now. likewise, they have refused to tackle the spending part, both of which get us to our debt. you have this utter lack of anything happening responsibly. we have to have things happening on the budget.

the fed is looking to do something on the unemployment issue. we have to have serious steps taken and we need stability in tax policy. >> with that, i am going to call an end to this. i think it was a good discussion. we could go on for hours. but i think it is important to understand the one commonality all of us up here share. this is real. it will have real impact. we know what the solution is. everybody who deals with it knows what the solution is. we are arguing where could lean one way or the other, and while we are doing that, our country and the economy are suffering. we need the leadership.

we need the congress and administration to come together and to find the commonalities laid out here and move the country in the right direction. answer. there is a lot we could do to make the situation better than it is now. i am not sure we are getting anywhere on this one. i want to thank the audience and the panel. we will call an end to this. i will let you all go out and today. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> the house oversight committee to investigate the use of human growth hormones in the national football league and the lack of testing. we will be live from capitol hill started at 10:00 a.m. eastern on cspan 3. also, ben bernanke holds a news conference and he will give an update on the federal open market committee with live coverage at 2:15 p.m. also on cspan 3. >> the white house was very controversial. who designed washington city, submitted a design for a palace but

americans did not want a palace. it was not all inspiring. in fact, in 1821, a european diplomat told congress it was neither of some or all of inspiring. the answer the congressman gave said the building serves its purpose. if it were larger and more elegant, but perhaps some president would be inclined to become a person -- permanent resident. >> vicki goldberg has gathered a few of her favorite white house photographs. watch sunday evening at 7:30 eastern and pacific on american history tv. >> up next, your phone calls on "washington journal." in 45 minutes, the house democratic caucus chairman talks about negotiations on the so- called fiscal cliff. at 8:30