that money should be spent for the benefit of the american taxpayers." circling back to the frustrating aspect that allen pointed out, it is unfortunate. unless we are able to reform our operations that waste could reoccur. we need better oversight. host: stuart bowen, special inspector general for iraq reconstruction. thank you so much for being with us this morning. that is all for "washington journal" today. we now go to the house for a pro forma session. speaker. the clerk: the speaker's rooms, washington, d.c., march 11, 2013. i hereby appoint the honorable frank r. wolf to act as speaker

pro tempore on this day. signed, john a. boehner, speaker of the house of representatives. the speaker pro tempore: the prayer will be offered by the guest chaplain, reverend michael wilkler. the chaplain: gracious god, our liberator and guides, on the 100th anniversary of her death, we thank you for the life of harriet tubman. while she was enslaved and oppressed by others, you rehinded her of her god-given dignity and freedom. thank you for leading her to escape slavery and for returning to lead others to abolish slavery and advance women's rights. thank you for the care she gave to her family and neighbors, especially the elderly. we are sorry that for too long our nation did not recognize her freedom, treat her with

respect and recognize her military service and leadership . we pray that you send the same spirit you gave harriet tubman into the hearts of people everywhere who are oppressed and enslaved. send them courage to survive, resist and escape. protect and guide them through peril and give them strength and wisdom to work for the freedom of all. men. the speaker pro tempore: the chair has examined the journal of the last day's proceedings and announces to the house his approval thereof. pursuant to clause 1 of rule 1 e journal stands approved. the chair will lead the house in the pledge of allegiance. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation, under god, indivisible, with liberty and justice for all.

the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir, pursuant to the permission granted in clause 2-h of rule 2 of the rules of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on march 7, 2013, at 5:24 p.m. appointments, commission to eliminate child abuse and neglect fatalities, signed, sincerely, karen l. haas. the speaker pro tempore: the chair lays before the house another communication. the clerk: the honorable the speaker, house of representatives, sir, pursuant to the permission granted in clause 2-h of rule 2 of the rules of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on march 7, 2013, at 2:28 p.m. appointments, advisory committee on student financial

assistance. signed, sincerely, karen l. haas. the speaker pro tempore: without objection, the house stands adjourned until >> this change would have the implications not only for federal benefit programs like social security but also for income taxes. it would also affect the poverty threshold and guidelines published by the bureau of labor

statistics, which in turn are used to determine eligibility for many low-income benefit programs. the congressional budget office recently estimated that moving to a change it cpi for vermin- wide would reduce the federal deficit by. .340 billion about 2/3 comes from reduced federal benefits. there are options other than the chained cpi for determining cost-of-living adjustments, and one of those is moving to a consumer price index for older americans. today we will have five speakers to discuss a broad range of issues related to the cost of living adjustment. each speaker will give a presentation and then we will open up for audience questions. bios are in your packets so i will not spend a lot of time on introductions, because we have a

lot to cover. the packets also includes the presentations and the stat sheets from the policy institute. our first speaker is stephen goss, the chief actuary of the soldier security administration. he will be followed by sita slavov, resident scholar at the american enterprise institute, and dean baker, co-director of the center for economic policy research, rebecca vallas, attorney with the community legal services of philadelphia, and finally, tom tarantino, chief policy officer for iraq and afghanistan veterans of america. we will start with steve. >> thank you, gary, thank you, christine, and thank you all for being here. i want to state for the ad said that i'm not here to advocate a

position but to hopefully shed a little bit of light on the nature of how weak and no changes in benefit levels for federal benefits -- how we handle changes in benefit levels for federal benefits. good, it works. the first thing is really just a question that we always do with whenever we talk to people in congress or elsewhere -- what are your goals, what are you trying to accomplish? whenever people get a benefit, they start at a certain level. from one generation to the next, that level can change. after people start getting benefits, it can change. i've looked at the four different mind-set, approaches that one might consider in picking what kind of benefit increases we should have paid one is the standard of living increase. over time, the standard of living changes. your grandparents or great great-grandparents', what they

had available and what they live with and what we live with is very different. another possibility is the pure price increase. if you look at the stuff we have an by today, how much did those prices go up over time? that is another possibility. that is kind of what the cpi is all about. a third possibility is what we might refer to as modified price increases. there are a number of ways we can measure how we adjust price increases. finally, as gary mentioned, there is the price index specifically designed kinds of things that -- designed to towards the kind of things that elderly folks buy. adjustments across generations, people retiring at 62 this year versus 62 the next year, and how do we do that as social security? those adjustments across the generations are done by the average wage index, and that is

the standard of living adjustment. the ssi program across generations rice's only by the modified price measure, lower rates of growth. both of those adjust benefit levels after the people start receiving benefits, individuals, just by the modified price measure, not the standard of living measure. it is about what the 505 people who work in our vicinity here, what their intent is and what they want for benefits. the first item, just to elaborate a little bit on standard of living -- standard of living as a general measure is the rate of growth and average earnings level for workers in our economy. that is what workers have available to do this stuff they want to buy. the good news is that average earnings grow faster than prices, which means that we have become wealthier overtime and are able to buy more stuff.

that is a good thing. this is consistent also if we had the federal benefits increasing over these lines with the idea that people might want to have a consistent kind of lifetime income or purchasing profile across their lifetime. private pensions have no cost- of-living adjustments at all. and drop offal driv as people get older. just for the initial benefits that people start to get, it is the people's relative position in our society with their well- being and producing power. your price increases, the second option we could go to. pure price increases is kind of a consistent with the old-style cpi we had a couple of years ago. it is what we had available in the mid-70's, when social security had annual cost-of- living adjustments to its base

of the been referred to as the fixed market basket -- look at all the stuff people are buying at a point in time, and how the prices go up. two things you bought, you bought them at equal prices, and one of them double in price -- you got equal amounts of them, and one of them doubled in price and the others stayed the same. this is why it says, how much prices go up on what you bought and what you considered buying. nothing is added in the cpi for new things that come in the markets. some are old enough to remember when vcr's first came around, everybody remembers when dvd player's first came around. they don't boosted the level of the cpi. they just change the prices of the things that are already out there.

and the nature of the new things that come in -- those of you who remember vcr's and dvd players, when they first come in the market, they tended to be really expensive and then drop in price very fast. the cpi does pick that up. new stuff is coming out all the time. and of course, the pure price index does not measure anything with the real increases in income that comes for workers. the third thing is the modified version of price increases. the mid-1990's, there was a change in the cpiw that in use for years and years, used for the social security automatic cost-of-living adjustments, to reflect some other things, behavioral responses, if you're a practice is that people had. it gets a little bit crazy

there 3211 different categories called strata of goods and services that build up all the cpi's, and one of them includes a steak and hamburger. within each one of those they made an effort to reflect the fact that for instance, steak goes up in price a whole lot and hamburger doesn't, and people shift to hamburger. two things you can buy, 1 doubles in price and the other stays the same. you have two things you but equal amounts of and instead of going up by 50%, the price index, they go up 45%. that may or may not be true. in terms of hamburger, it goes up a lot at a price and steak doesn't, people may not shift all that much to steak. we estimated about 2/10 rate of

growth in the cpi as a result of those adjustments in the 1990's. those affected all of the cpi's, affecting the cost of living adjustments. another one -- i hope we're doing ok on time here, gary -- another one which is further modifications for behavior that could be considered, this is across the 211 broad a strata. we could start take into account the possibility that people could shift between items could not just hamburger and state anymore. my favorite example, cars and flat screen tvs. cars double in price all of a sudden and flat screen tvs don't, people might decide to buy a flat screen tv and not by a car that year. people do it just what they buy,

and some -- people do adjust what they buy, and some more than others. this affects the ability to shift across these categories of broad adjustments, it just in reaction. this, by the way, is the chai ned cpi, being done only for the cpi-w at this point. we estimate that this would slow the growth for their, the rate of growth and measuring prices, by another 3/10 of 1% going forward. we have a fourth option, price increases for the elderly. there is so-called experimental cpi-e that puts greater weight on health expenditures, greater weight on housing, which is where the elderly spend money proportionally more than other

folks. these historically result in a faster rate of growth in the cpi, if one were to look at this and use it for increases in federal benefits. one of the arguments against using cpi-e and calling it experimental is that the elderly age 62 and older have been a relatively small sample. back in 2006, the cpi-w represented about 37% of the overall sample of all urban, and the elderly was only 16%. by the time we get to 2020, we estimate that the rates will be about the same. it is not appropriate to use the cpi-e because of low sample rates. it is probably not as serious consideration any more. really, this is a matter of

options, which people in this building consider all the time. we could have a standard of living increases across generations and potentially after people start receiving benefits, which would keep beneficiaries of all times with the standard of living people enjoy in our economy co. the modified price increase that we have now is just 2/10 never percentage points lower on average per year. and the third one to have further modifications so that people can shift what they by over time, another 3/10 lower. the price index for the elderly we estimate would be about 2/10 faster than currently modified and put us to the same rate of growth in prices we would estimate as the cpi we had one automatic adjustments went into place. let me show you a little craft here. this is in nominal dollars of

what overtime from age 62, concerning retired worker beneficiary, benefits would look like under these different flavors of approach. the blue what is what we would have if we went to a real standard of living adjustment stan -- but of living, cost of living, take your -- standard of living, cost of living, take your pick of what you want to use. if we go to cpi for the elderly or go back to the pure price index, is 4% higher benefit levels. chained cpi, 6% lower than what the current cpi would be. the percentage changes from what is being offered under the current and you can see how it is higher, 6% lower, and all the other possibilities in the

range. i would conclude by saying that this is a a choice that has to be made about what kind of measured it is if we want to ethics benefit changes over time. should be the standard of living people are operating on so that people as they get older and older are able to buy the same kinds of things as workers are able to buy over time? should it be a pure price index? or should it be a doubly adjusted version of a price index, which takes into account the fact that people can change their behavior and move towards lower price or lower-inflating priced items as time goes by? it is a choice. i will step down now, and i think we will have lots of thoughts about people possibly about where we should be going. -- thanks again, gary. [applause]

>> ok, thanks. i am going to focus in particular on the implications of the chained cpi for social security retirement benefits. that is the topic i've done a little of the research on myself. that will be the focus of my presentation. i am going to start by saying that we are all aware that social security is on an unin the near future we will make adjustments to either the level of promise benefits or parallaxes. the idea that between switching to chain the cpi is that it will produce promised benefits and it will get us was that goal. the question is, is this a good way to accomplish the goal? when you think of slowing the growth of benefits, i think it is important for us to focus not just on the level of benefits, but on their structure. the key question is, given the

level of lifetime benefits, what is the best way to pay that out over person postretirement? -- over person postured retirement? social security provides a real inequity. -- real annuity. that is pretty rare in a private market and is a valuable thing for most people. epitaxy and not just against al living your savings, but also -- it protects you not just against al living your savings, but also inflation. we have been about how we indexed benefits for inflation -- what is the appropriate cost- of-living measure. there are a couple of different options. there is the cpi-w, currently is to index social security benefits. chained cpi-w is an alternative. a third alternative would be the experimental cpi-e.

cpi-w reflects a broad group of workers, about 1/3 of the population. it does have some shortcomings. it is not adequately account for the substitution between goods that consumers might be able to make. the price of one good goes up and that might be mitigated by the fact that you can switch to a different good as the price of cars goes up and you can switch to a flat screen tv's and that might offset the impact of the increase in car prices trade that is a legitimate criticism of cpi-w, and chained cpi does attempt to overcome that. another criticism of the cpi-w with respect to indexing social security benefits is that it does not reflect the habits of older people. older people spend a larger fraction of their income on health care. if we look at the experimental

cpi, cpi-e, that is based on the spending patterns of older americans, it is not a chain waited, so it does not take substitution into account, and it does rise faster than the cpi-w mostly because health-care costs rise faster than other prices, and older people tend to spend more on health care. the key question here is if we want social security benefits to rise with cost of living, and in other words, if we want social security to be paid as a real annuity, what is the best measure of inflation? i want to emphasize that this is a separate question from the initial level of benefits, or the total value of benefits over person's lifetime. i have done a little bit of work on this question, together with my co-authors at stanford university.

together we have done some work on the appropriate cost-of- living measure for social security. we have a paper that was published in the june 2011 national tax journal that looks cpi-e.cpi-w and what we do in this paper is that -- is we begin by estimating the pattern of out- of-pocket health care spending by men and women. we use data from the health and retirement study, an ongoing survey of a representative sample of older americans. as you might expect, out-of- pocket spending rises with age. at any given age, out-of-pocket health care spending rises over time. for a few different cohorts, we performed it the following calculation -- we compared the pattern of their retirement over the social security benefit net

of health care spending. we take the social security benefit and every age of retirement and subtract out of pocket health care spending and we say that that is what they have left to spend on everything else besides health care. in doing this calculation, we are implicitly assuming that these individuals have no other source of retirement income other than retirement security, and the calculations we have done in this paper applied to the 1/3 or so of beneficiaries who rely on social security for 90% or more of their income. this is the group we want to be most concerned about. we take what is left of their social security benefits after health care spending and we look at the pattern over their retirement and we compare that to the growth in the non-health component of the cpi-e. what that tells us is how well as the purchasing power of their non-health spending held up over their retirement. the bottom line is that it has

not held up very well. one example -- we find that for people born in 1918, the purchasing power of non-held spending grows at a slower rate than the non-health component of the cpi-e. by age 89, purchasing power it falls short of that measure by about 20% from and and 27% for women. is larger for women because women tend to have higher out of pocket health care costs that rise faster at older ages. we get similar results for other cohorts in different racial and ethnic groups. we find that further indexing to the cpi-e, even that is not fully protect non-health care purchasing power grid as a person ages, health-care spending grows, in addition to the general health care costs overtime paid a 75-year-old is likely to spend a larger fraction of their income on

health care than a 65-year-old. to see this visually, the solid black line on this graph shows you the actual average social security benefit, and nominal terms for a man born in 1918, and it shows it to you for ages 65 through age is 89. the solid great line on this graph, the lowest line there, is the social security benefit minus out-of-pocket health care spending. the dashed grey line is what that cohort's non-health care spending would need to look like to maintain non-health care purchasing power, measured by the non-health care, one of the cpi-e. actual net of health-care spending falls short of that amount, and that sort of grows over their retirement. the dashed black line is what the benefits would look like for

the school board over their time and if they are indexed to cpi- e instead of cpi-w. the next graph shows you the same comparison for women born in 1918. these women are aged 89 in december 2007, which is what we did the calculations. actual net of health care spending falls short of what it would need to be in order to maintain non-health care purchasing power. and that event, as i mentioned earlier, is greater for women at older ages compared to men. a couple of important caveats to this analysis. nor cpi-w ispi-e chain-weighted. they don't adequately account for substitution.

neither anticly and accounts for -- neither adequately accounts for improvements. in my view, the ideal cost-of- living measure for older americans would be some version of a chained cpi-e. that does not exist. you would need to go back and look at the kinds of substitutions that older americans make. you needed to go to the data for that. chained cpi-e would grow slower than cpi-e but faster than cpi-w. -- cpi-u. it is not clear if you would grow faster than the cpi-w. you would need to calculate it. switching to the chained cpi-e, in my view, does not necessarily

improve the accuracy of cost-of- living adjustments in social security. if we want to keep purchasing power relatively constant over person's lifetime and want social security to be a true it real annuity, it is probably not a great idea to make that switch. my colleague has made the point that we want the purchasing power of social security benefits to grow over person's retirement, because that might encourage a logger, years. you might work part time to supplement social security benefits, and when you are no longer able to do that at older ages, you get increasing levels of benefits in real terms. we need to make some adjustments to benefits. 's onow that program sustainable, but it is a separate question of how benefits should grow over a retiree's lifetime, and more generally in reforming social

security and other entitlements, we need to pay attention to the structure of benefits and ask ourselves what is the purpose of these programs, what do we want them to accomplish, and make sure we are doing that rather than just focusing on the level of benefits. thanks. [applause] >> ok, thank you for coming. i appreciate aarp for organizing this, and it looks like a timely issue, because when we read the papers and hear the news in an attrition and congress are -- the administration and congress are coming to a deal on this. i want to make four main points to current seniors are not affluent. i don't know how many times in

the papers i see "affluent seniors." second, the situation for near- retirees -- coming down the road, baby boomers like me are going to be real wealthy. the data does not support that. there, the evidence on cpi -- we have had good accounts of this, but is very mixed. we have to think about that very, very carefully. i want to hit on a few more things to it the last is that this is a big hit. the thing i find frustrating in washington is that no big deal, we will do this, no one will notice. the reality is that we're talking about real money here. first off, the absence of the current retirees. -- affluence of current retirees. this is an average monthly

benefit worth over $1,200 on monday. this is not an affluent group on the whole. social security is a very, very large chunk of the and, most retirees -- of the income of most retirees. when we look at the group as a whole, the median prison income for people over is to buy was $20,000 -- median person income for people over 65 was $20,000. the median for people over 75 was 17,600. the impact of that -- we can argue about price indices, but what we cannot argue about is that the impact increases over time we giving the biggest hit the people in their seventies, eighties, nineties, and there's

been some discussion of trying to ameliorate that. when you are trying to save money, that becomes very hard, because a lot of the people you are trying to save money are exactly those people. if you ameliorated for a certain group of people, you will end up with not a lot of money and a half and very complicated stories -- have very complicated stories. i would like to show the impact of the housing crash. that is why i still have 2004. this is income for near-retirees -- not "income," wealth of retirees. the median for this group is about 170,000. important point -- these people left paid off -- have paid off

their home. the median house prices $180,000, which i find very useful, because the median prison in this age group can take everything -- median person in this age group can take everything in their home, everything they have in 401ks, savings accounts, use that to pay off their mortgage, and then they have at 0. everything they have to live on is the social security. this is near-retirees, people 55 to 64. does not look terribly promising. the younger group, not a lot better. the median wealth for this group is about 770 -- is about $70,000, $75,000. people are still working for the most part and they have an

opportunity to accumulate different assets. no one i know at least as a picture of everyone doing great. it is hard to imagine them doing much better than the cohort of older baby boomers. the people we could see retiring in the near future look like they don't have a lot of money. defined benefit pension plans, we know they are disappearing rapidly. this does include defined benefit pensions take it does not look like he will be a big factor for these people. summer this has already been touched upon. -- someo f this has already been touched upon. point was hugely important, that the health-care component is measured in the increase in the same set of health care services.

people are getting more services through time, and one reason they get more services for time is older people need more services in general, and that will be additional cost. for that reason alone we are not picking up what we might think of as their cost of living. second thing is that if we are talking about substitution, is not clear -- look at the higher levels substitution that steve was talking about, between the flat screen and the car, and it is not clear that applies for the elderly. how good is the current index -- you go to the chained cpi and it might be less good. the bureau of labor statistics did an analysis some years back, not looking specifically at seniors, but people on other programs and they found is substitution effect for this group was basically zero. things may have changed. we cannot assume that seniors

are just like these groups. but you cannot assume they are not. the other point i wanted to make, and i realize that is a typo here. i will keep our g-rating -- lower level substitution. we cannot assume that this will be the same for everyone and particularly for seniors. for reasons unrelated to this, and i don't typically do this on the weekend -- i happened to be looking at some of the strata over the weekend . you find and sugar and artificial sweeteners, and one of the other strata is margar ine and butter. if the price of artificial sweeteners it goes up, will they

switch to sugar if they have diabetes? i don't think anybody knows how it is. we cannot automatically assume they will make those switches. people shop at wal-mart, shop at a big store -- not going to do a commercial for wal-mart. what if you don't typically shop at a big store? you go to a small corner grocery store, convenience store. you have less opportunities. is that true for seniors? i don't know. we might be already assuming a greater level of substitution than is actually there. steve raised this issue of new goods. a very, very important point. new goods fall rapidly in price. cellphones -- one thing they are

beating up the bureau of labor statistics for, because they did not include cellphones. the bureau of labor statistics has done a very good job and this was a rare mistake. the cellphone had plummeted in price and people were saying that cpi overstates inflation. hey, you missed this big drop in price paid flat screen tv's, and they, in price. -- they plummet in price. do seniors buy these at the same rate as everyone else? we want to pretend we are knowledgeable people, and you better know the answer to that. i don't know enoug -- i don't know and i don't know anybody else who knows. my guess is they don't buy these goods when they come out and are very expensive in price.

my point is that if our concern is accuracy, if we want an index that falls the cost of living for seniors, we can do that by constructing a full elmley index, and it could be a chained elderly index, but we don't have the information to say that now. it is a cut, that is undisputable -- i should not use the term "cut." whether it is accurate or not, we don't have the information to answer that question. the last point is whether this is a big deal or not. i have had a lot of discussions with people who say, "oh, what is the big deal?" 3/10 of percent over year, 3% in your benefits, 20 years, 6%, 30 years, if you live that long, 9%.

that is an average cut of about 3%. i have learned in washington that 90% of the policy debates over what adjective supplies. what i can say is that something that is bigger than something that's big also has to be big. that i feel comfortable saying. we had a really, really big fight over raising taxes for the wealthy, which you can say that president obama won or lost or whatever you want to say. how do you raise the taxes over someone earning over 5000 others, the median prison affected, -- median person affected, some one earning over $500,000 in income. that was supposed to be a really big deal. this is about three times as much, because for a typical senior, we are cutting their post-retirement income by about

2%. if we think the tax steele was a big deal -- if we think the tax deal was a big deal, we have no choice. just to sum up -- the affluent seniors, i always want to say who are you talking about. the second point -- if our issue is that we are really troubled and we don't have an accurate index, we could get an accurate index and have the bureau of labor statistics construct a full elderly cpi. there is more at stake for most senior span was at stake for the wealthy with the tax increases put in effect two months ago. thank you. [applause]

>> which one do i hit? thank you to aarp for having us here today, and more importantly, thank you to aarp for having water bottles press, because they took them at the door and i was concerned that we would not be able to make marco rubio jokes. [laughter] now we can. my name is rebecca vallas. i am a policy advocate for disability issues here in washington. i want to speak about something a little bit different than what a lot of my fellow panelists are speaking about. we are hearing a lot about seniors, and one of the pieces of this conversation that often gets lost people with disabilities. the reason that is significant, as my sides will discuss in detail, is because there are other social security programs besides social security

retirement benefits, and that is what is getting not discussed in a lot of the media attention and a lot of wonderful forums about this potential policy change. briefly i will discuss what our social security disability benefits, what are ssi benefits, who gets them, and why that is a significant part of the conversation, or should be. here is a brief snapshot of ssdi. ssdi is a program also under social security, but provides a modest monthly benefit to people with disabilities, specifically people with severe disabilities and health conditions who have worked enough quarters to be covered by the disability program. i'm not going to get into details about what that means. it is almost 9 million workers with disabilities and severe conditions. the average age of people who get the benefit is about 53.

the vast majority are over 50. the amount they get any benefits is based on how much they work and are and ho-- and how much they earn when they are working p. the average benefit that social security disability insurance beneficiaries get is about $1,100 a month. it also comes with the medicare after a two-year wait period, which is significant for these people. my next slide is a snapshot of ssi, supplemental security income, a separate program for people with disabilities, and the main distinction is that it is for people who are not covered by ssdi because they have not worked enough or have not earned enough to get benefits through ssdi. the disability standard is the

same, so we are talking about people with severe disabilities. it is programmed for people 65 and up but to not have enough quarters to get social security retirement benefits. there are about 8.3 million ssi beneficiaries and in the u.s., and 4.8 million of them are adults ages 16 to 54, because we're not just talking about the elderly here. we talking about people with disabilities who are non-elderly as well. it is also 1.3 million children who have severe disabilities, and that gets neglected as well. i will come back to what concurrent beneficiaries are. ssi benefits, the amount you get is based on the federal benefit rate. the maximum benefit that you can get, that will benefit, is $710 per month for 2013. if you are part of an ssi

couple, husband and wife, the benefit is reduced at a couple rate per month. most beneficiaries get less than that. perspective how little it is to get by on each month. in order to get ssi you have to be not only disabled but really, really poor. you have to have limited income, not just you, but your household, and the asset limit is $2,000 for a single person and notably, that has not been adjusted for inflation since 1989. the federal benefit rate is adjusted using the social security cola, and that is what makes ssi relevant in the conversation about chained cpi. they are typically in most states eligible for medicaid.

without going into a long discussion of why we have these programs, it is similar to the program for social security. it is about reduction of poverty for seniors and also for people with disabilities, prevention of homelessness, and to prevent and reduce institutional station, critical programs for people living in the community and staying in their homes. it is about helping people maintain their health and helping people access to essential needs of life. housing, shelter, food, etc.. the last bullet describes the role of the family in caring for people, the whole family caring for that person so that they can stay home. who are the people who get these

benefits? read't read it is slide -- this slide to you, but this is a long list of severe conditions. many of them actually die with me to years of receiving benefits -- die within the first few years of receiving benefits. most people who apply for benefits are denied. many report worsening health. they i not only sick, but are getting worse over time. as dean noted for seniors, the same is true and even more true for people who receive disability benefits, that their b enefits comprise all or most of their income. ton it's your only money

buy anything in the world, and makes any reduction in your income impactful in your life. over 90% of income for non- institutionalized and fisheries -- non- institutionalized beneficiaries, and 13% of ssdi beneficiaries also get ssi because their benefits are so low. there are about 2.1 million americans who both received a very modest ssdi benefit and a very small ssi benefit, and the reason is their social security retirement benefit is so low that it is below the ssi benefit rate, so they received a little bit of ssi to bring them up, but it reflects how many people who report benefits are incredibly

low income, and the majority of beneficiaries have no other source of income at all. the next slide should come as no surprise, given that. -- given that i show how many receive benefits as the majority or entirety of their income. if that is all the income you have got, compare that to the federal poverty level, and it should be no surprise, many ssi recipients, virtually all of them, and how many ssdi recipients are below the federal poverty level, and a majority are the low price the federal poverty -- are below twice the federal poverty level. these folks a struggling as it is. another useful comparison point is the minimum wage, higher than

the annualize benefit for both of these programs. there is research that shows that market rent in virtually everywhere in this country exceeds the ssdi benefit rates. it puts into perspective how much money we're talking about. i would argue that for people for whom this is their sole or majority source of income, it is seen differently more than a technical change. it is a huge cut in your household income. this shows you the annualize benefit cut that folks will incur based on how much they are getting. the lower portion, especially low-income ssdi beneficiary does not get much more than the annual benefit rates, but it is significant cuts over time, and many people who receive ssi and

ssdi start getting benefits that number ages than their retirement age, and they have longer to receive the benefits, during which time they will see those benefit cuts really build up. i think an important note on ssi beneficiaries is they face a two-part benefit cut. before they even start to get benefits, if the chained cpi is in place, the federal benefit rate is going to grow more slowly, and the benefit they get, by the time they actually qualify based on age or disability, is going to be reduced in terms of purchasing power. for ssi-part cut beneficiaries, which we can get into more during questions. it would be eroding the value of

what is already a sub-poverty level assistance for people who receive the full benefits. is the chained cpi more accurate? i think dean raise a lot of good questions. we don't know, we don't have a lot of good information here. but i would like to put forth a little bit of common sense. what is it like to be living on $520 a month? is there any room for a substitution there? the best example of why chained cpi makes sense to a lot of economists is that if the price of and mercedes goes up, people will just buy an audi. that does not work for my clients. it is not work for people receiving ssi and ssdi in most cases. they are not driving a mercedes, they are not driving audis. if the price of beef goes up,

you cannot say that people are buying chicken -- it would be hamburger, but if you cannot afford to have meat in your diet, that is not a substitution you can make, either bid this substitution effect, even with the full ssi benefit, is scrimping on one basic living expenses to cover the other. a tragically common thing with my clients is that they become efficient with how to manage the household budget so that you do not have any utility shutoffs, you stick your gas bill to pay your elector, and then pay your gas bill next month but you don't pay your elector. you have to not paid for 60 full days, and if that is the policy, that is the substitution you are seeing. skipping no, takin -- skipping

a meal. that needs to be not neglected in the composition about a switch to chained cpi. what is important to put that in perspective is what that breaks down to on at a daily and weekly basis. i did some very light math on the weekend and i found that $520, that breaks down to $130 a week, $17.33 a day. if you took a cab to this event and you spend $10, that is almost all of an ssi beneficiary's daily budget. if you bought a grande latte from starbucks, not to do a commercial for starbucks, but that is bitterly pocket change for most of us and that is what these folks are living on.

i will be done with my limited time, which i may well have exceeded, but here is ruth, age 83, worked full time until she came down with lung cancer, and she worked for her savings before she applied for social security. she gets $878 a month, which makes her pretty well off compared to most of these folks. every dollar of her income gets eaten up a very, very quickly. i don't even have a column for miscellaneous items like toothpaste and deodorant. every dollar counts to ruth. another example is dana. she is 40, so she is one of these younger folks who has a disability but receives ssi benefits. she is only 3/4 of the federal poverty level, even with the

fall ssi -- full ssi benefits. she has less than $2,000 in savings because she asked you if you want to be eligible for ssi -- has to if you want to be eligible for ssi benefits. we are pushing her even further into poverty and that is clear looking at these numbers. that is all i have got. [applause] >> well, good morning. i'm tom tarantino, the chief policy officer for iraq and afghanistan veterans of america. i wanted to start out by thanking my fellow panelists for explaining this issue, for

breaking it down for all of us, because frankly, this is really complicated stuff. forgive my lack of powerpoint. i am a soldier, not a lawyer or analyst for anything, and i'm used to doing my presentations with chalk on the side of a tank at barely half that neither, despite my request, so you will have -- i apparently have neither, despite my request, so you will have to bear with me. this is very complicated stuff. cpi, the point is that it's complicated. that is the reason they're looking to cut it. they said no one will notice the difference. no one will notice. why? it's impossible to explain. the stock as with complicated.

-- this stuff is really complicated. i said, pretend you are in a bar and trying to chat someone up. boil it down to 30 seconds. it's impossible. you're talking about cutting benefits. you're talking about cutting benefits for the people who of sacrifice the most for this country. you are telling veterans that their service is not valued. that is what you're telling them. slip away all the stuff that does not matter and understand what we are telling the men and women dress sacrificed blood, in many cases they're lambs, other health for this country. -- their limbs, their health. it is unconscionable to think about. we have come up with creative ways to cut benefits.

it outrages me. i find it unacceptable. you should, too. less than 1% of this country has fought in iraq and afghanistan. less than 1% of families have sacrifice the most over the next 10 years and now we're saying, guess what? you're going to take another hit. this is not theoretical. this is real. there are 3.4 million veterans receiving v.a. disability and it a chain cpi would cut those benefits. a disabled veteran that enlisted now would get -- never mind about that. this is what i'm saying. i am reading all of these stacks. my colleagues have given me all of this stuff.

it's confusing. you're talking about cutting benefits for 3.4 million veterans than they already wait nearly 300 days just to get those benefits. stick you're going to in this backlog it, this unmanageable system and then we're going to get them. it is not just disabled veterans. you're saying we're going to cut your benefits. thanks for your service. oh, the way come when you retire and all you have is your veterans benefit, maybe your pension, and social security, we're going to cut all three at once. that's what we're talking about here. that is why we're so outraged. they are outraged this is even on the table.

that is not a political thing, not a partisan thing. this is breaking the promise we made to these men and women. most people do not understand that the fight for services in this country is ongoing. it has been going since world war one and it has not stopped. it is still nowhere near where we needed to be. most people do not know that. the suicide rate in the military is astronomically higher. we lost more people to suicide in the military last year than combat. most people do not know that. in the time i have been talking about this, one veteran has committed suicide. most of them are elderly getting

benefits we are talking about cutting. the va has a backlog for these benefits that is unbelievable. i don't know if anyone saw it today, but in the daily beast, he did put out an investigative report on a statement of the va backlog. it's much worse than we thought. we sit the veterans of iraq and afghanistan on average wait 300 days. in most urban areas it's closer to 600. need nowhere near where we to be to care for these men and women who have been sacrificing. i cannot believe we're even talking about this. the government is failing them every single day.

every single day care and services for our veterans are failing. to come to them and say, you know what? times are tough. we all have to sacrifice. now we are cutting your benefits. it's a punch in the face. tell me about it. times are tough. tell it to the guy who's done three tours in afghanistan who cannot get a mental health appointment that the va in 50 days. tell that to family members who have lost veterans to suicide. you cannot keep going back to the same well and pull water route otherwise you're just going to have people stopped serving in the military. you're going to have a national outrage. this is something we cannot accept. this is what we're really talking about. we're talking about the train the faith we keep with our men and women would then their country.

that's really all that needs to be said about it. thank you for your time and attention. thank you aarp for bringing us here today. i hope the good your bosses and talk about this in simplest terms possible. this is something we cannot accept as a country. thank you. [applause] >> as you can hear, there's a lot of passion about this issue. i'm want to congratulate the panel for staying on a tight schedule. i had as wrapping up at 11:10 and it's a few minutes before. that leaves plenty of time for questions. we have some microphones in the back. i ask that you raise your hand. i will go ahead and kick things off with the initial question. i think rebecca might have

mentioned this as well. this not only effects the cost of living adjustment but we also know the current problem any measure is woefully outdated. what about applying this to the threshold docks >> presumably would apply it across the board. he was saying under some circumstances it may be the thing to do. we have all these programs tied to the poverty index. do we say this is not the right measure poverty? if we do not do that, it's going to rise rapidly.

people today we think of as poverty, it will not be rising as rapidly. >> and dean said that well. this is a point that's very important to make. i did not have entire slide they could go into, but the two slides that i put up also received food stamps and data received in hong community-based services to help her with her activities of daily living through a medicaid waiver. part of that is based on where she falls in the federal poverty level. another point that was buried in the comment is that maybe we can just protect certain categories of people and then the chain cpi will work. maybe we will want to protect ssi beneficiaries or poor

people. it is not just ssi beneficiaries but also d.i. beneficiaries and low-income beneficiaries. acustar carving out all those groups that would be adversely impacted, you have eaten up the whole policy and not sure what's left. that's an important point take in. >> i am laurie montgomery with "the washington post." i'm wondering you know about the proposal the president has put on the table. we understand poor people and ssi would not be affected. in a talk about their proposals and why they do not provide specific protections for the people you're talking about?

i don't think anyone is talking about cutting veterans' benefits, for example. >> i don't know if i am more not. this is another big problem. lack abouteneral reach to the community. they have been talking about modernizing all of this, but they largely do not talk to anybody about it. when we talk about the majority of veterans being at retirement age, it will not fix the problem. why palau autographing

calculator when you need to make this simple. how much in savings are you really talking about? if you're just making a political statement, don't do it on the backs of veterans and seniors. i cannot believe we are even still talking about this. >> they're going back and forth with the different proposals. i have also heard about the bomb set age 80 and 85. and then very few people live to 90-95. i do not think they're going to say they will apply cpi to the poverty level itself.

if the chain cpi is applied to the poverty level it means all the programs indexed to poverty for eligibility, which is an awful lot of food stamps, medicaid, low-income programs, they would all be affected. congress could decide anything but it will be very strange. this will be the correct cpi but we will have a different one for party. you could do that, but i'm be surprised. -- would have a different one for poverty. >> i go back to my year earlier comment. something you do not hear discussed is protecting low- income d.i. beneficiaries before they hit the age of 80. they may have been receiving benefits for decades, as many of them do. the other point i would make ties in with what dean just said. you start to carve out ssi,

d.i., vets, and you think of coverage or bases of vulnerable people. what's left? it's not a policy it makes sense switching to. you have to carve out virtually everyone it would be applied against to make it accurate and fair, it makes you wonder if it is more accurate. >> i would also add to that with all the programs we ever heard ,bout today, and i'm no expert there are implications for other groups. there is a detraction between social security and ssi, so if there is a bomb did does not help the ssi population. there are other things you need to do. it seems to me, to really fully account and protect the most vulnerable, it strikes me as an

impossible task to do. >> i am virginia with the national academy of social insurance. i have a comment and then i would ask your response about how this is so complex and people will not understand. it seems a small, but if enacted it would not be complex when it is in place. the cpi has been calculated. come election time, when they announced the social security cola, they said if the incumbent had not done this, it your benefit would be $4 bigger. the rafter that it will be $12 for the rest of your life. it's not hard. i'm trying to think about putting this in hindsight.

it's difficult to explain going forward. you're trying to think through the politics of this if it were done. it seems like it would be very hard on an incumbent on both sides of the aisle. >> that's the point. you are exactly right. after it's all said and done and you start feeling it in your check, then it's really easy. congress just cut my benefits. august occasion that it takes to get there. -- it's a crazy thing to say because no one knows what it means unless you are these guys who do the research and you know what a chain cpi or a cpi is. unless you have this bank of knowledge, you will just sit

there thinking about what it means. when it affects your life, you have a context. we do not tend to get engaged until it starts affecting our lives. then its, oh, my god. what do we do? we have to apply that thinking now to apply the brakes and prevented from doing things like this. >> it's hard to know how the politics will play out. you do not hear people saying they want to cut benefits but they want a more accurate index. 99.9% of the people saying that have no clue if it is a more accurate index. >> the other languages that it is a "technical fix." it may not be the correct technical fix. difficult to talk about all of the technical math stuff

that tom and rebecca mentioned about the real world effects on this. this does come down the way it has been portrayed, by and large, as a technical fix. there is no question that the changes it chain cpi would make would be more correct way of calculating something. i would just come back to what it is we're trying to target benefit increases to rise or change with overtime. is it a standard of living including everything that people might buy over time? is it just the prices of things they are confronted with? is it the prices of things taking into account behavioral responses in how people may want to shift away from what has been growing faster and slower. which of those is really the target we're trying to fix these

benefit increases to? one thing we have mentioned was quality adjustment to the cpi and sees -- indicies. the cpi grows smaller as the quality increases. one example is computers. capacity has exploded and other results the components in the cpi for the price of computers has dropped like crazy. gary, bless his soul, he cannot go to wal-mart or costco to buy an 8086. they have not dropped in price for what is actually available. that is true where quality of adjustment comes in play. >> i'm nobody special.

what confuses me is why this is being aligned with the federal deficit. as i see it, what my research and reading is that there is no doubt that social security, colo, it needs to be investigated in may be changed somehow. i'm not sure it needs to be on the table with the federal deficit. that is what is in my mind people are saying it is a decision that has to be made today. can we take it off the table with regards to the federal deficit? we paid in. not that it does not need to be looked out, discussed, debated with all of the differing choices we might have with change in the cpi, but is anyone listening to what you have to say? can we take it off the table

now? >> anybody can answer that? >> we think social security should have its own conversation and it should broadly talk about retirement security. >> i cannot say whether or not you can get them to see it that way. it is a distinct program with its own designated fund. . it is supposed to be off budget. this would mark a major change in what is being treated, just looking down savings on the opposite. what ever. that's beside the point. >> its notable there appears to be a disconnect in what's

getting discussed in washington and what people really want. an illustration of that disconnect is in a recent survey that the national academy of social insurance conducted. i would conduct you to their web site for the survey results, but in a nutshell the majority of americans were identified as republicans or democrats and across the income strata all supported strengthening social security benefits and paying for it through payroll taxes. that is not something that you hear about social security. all we hear is about cuts and raising the social security age. it is all we seem to appear in the echo chamber. that disconnect is unfortunate and hopefully it will not remain the case forever.

>> virginia are reyna would like to say there is a briefing on that survey and its results tomorrow. -- virgina reno would like to say there is a flier outside about it. >> stop bringing about the policy and look at the politics. we have to fix the cola up? is a broken? has anyone ever asked that question? judging by what we have just heard, nobody knows. we have to reform entitlements and raise revenue. well, this looks at reforming entitlements. whether it actually does what it's supposed to do or anything beneficial is a respective of the box that it gets to check that box. everyone on both sides of the aisle gets to give them a self- themselves a high five.

they're doing this with the people who are most vulnerable. >> technically and legally social security is "off budget." when you look at the discourse in the sea, and generally -- in d.c., generally they're talking thet the public figh debt and unified budget. it is completely in the game even though it is technically and legally off budget. >> let me just stand up for the house and senate. we got a majority of the democratic members of the house

to look at chains cpi and the cuts to medicare and medicaid. a lot of senators were doing the same thing. we did have some supporters and we are trying to raise our rates. the real life component of this is critical. i am particularly happy we're talking about the connection between health care costs and net social security benefits. one of the concerns we have is this hurts the eligibility of medicare and medicaid benefits, but there are also other changes being discussed that combining with all of this would be devastating. increased cost sharing for medical care, increased cost sharing for people with disabilities and seniors, changes to medicaid.

are you all looking at the combined effects of these? one of the big concerns we have is the chain to cpi over there, medicare over there, medicaid over there. the most vulnerable are people on ssi and ssdi. someone living on $25,000 in chicago in my district, there are not eligible for anything and they're having a very tough time. ist we're really looking up a combination effect of this. i'm curious as to whether anyone is looking at it. >> some not aware of any papers on it, but in a panel like this, we're trying to bring the connection together and are the effects of some of these programs.

>> part of it is we do not know what else is coming down the pipeline. there are cuts about some in medicare. at this point, i do not know what cuts in medicare are likely to look alike. prescription drugs? ok, that does not affect what you pay out of pocket, but they may well take a different form. >> i do not mean to get to this big semantic thing, but i want to highlight again there is a logic that it has to maintain its own balance. we get to the 2032 exhaustion date? is that what it is? 2033. there is no commitment. we will find out if we get there, but at this point there is no commitment we will have general revenues so there is

logic in treating it as a separate program. under the law and tax practice, it has to be self financing from its own budget. that could change, but is not the case now. >> and glad you mentioned that there are a number of people on both sides have really taken nuclear positions opposing chain cpi and it has not gone unnoticed. another individual who was really championed this issue is senator sanders. i think you also make another great point. whenever we are making proposals are having discussions about policy changes that impact people, we cannot be looking at them in silos. the programs interact and we have to look at the combined effect. it's hard to do when we have a

lot of theoretical ideas out there and we do not know what is coming or what will actually take hold. it is actually a critical principle very much illustrated by social security, ssi, medicare, medicaid, and many other programs that seniors and those with disabilities rely on for assistance. >> at the risk of adding complexity, but one item is imagine of the social security cost-of-living adjustment is approved by less than otherwise anticipated, one impact is on behalf of the medicare premium, the amount by which your part b premium can go up is limited by the amount of your cola. if it goes up by less than many people will be contributing less to the premium which means the basic premium will have to go up by even more because it has to

capture a certain amount of money to pay the rules. >> we are out of time. i just wanted to see how many more questions we had. i see two or three. >> i represent the pension rights center. and what we're talking about interactions. i know this is not supposed to be a tax panel, but i cannot believe that people seem to believe that this is a stealth way of raising taxes. i do not think they realize that for the vast majority of middle- income americans, they are the ones who're going to be the most dramatically impacted by the tax side of the cpi change. the joint tax committee did a

distribution now losses last year at the meek west of congressman levin -- they did eight distribution look last year at the request of a congressman levin. what you are telling middle- income workers that if you do this, your taxes will go up higher and then when you finally get to the point where you retire, we cut your benefits faster. you're hitting the same people while they're working that you're going to end up hitting when they're cooretiring. >> can we go to the next question? >> some wondering if one solution on the table could be taking the $110,000 cap for payroll taxes, if you took that away, what would that do in

getting the program to be more sustainable and maybe not cutting benefits? >> there are a few issues there. if you did the arithmetic their, if you did not raise benefits accordingly, that covers the projected shortfall. or it would get your most of the way. if you were to go that route, it does get complicated. currently, the payback structure is very progressive, but you get back the more you pay in. as a practical matter, you hit the very high end earners and it's easier for them to arrange to get their money in capital gains or other forms than wages. i think a really important point is you have more money going

over the top. when the greenspan commission set a cap, 10% one over-the-top and today it is closer to 18%. the u.s. structured so that 90% was always covered. we did not suffer redistribution, that would eliminate 44% of the projected shortfall. when people talk about this being a demographic issue, we are living longer, baby boomers are retiring, but there is a big inequality aspect that people should recognize. >> often the conversation we have when we talk about how to solve fiscal problems talk about cuts and it does not look at funding the program and generating revenue.

we did have a whole other panel about possible solutions for social security's financial future. there is one tomorrow, as we have been reminded. it needs to not be just how we can cut and who we can cut, which is where we sadly end up. >> we had one more question? >> i was particularly wondering while we have heard the social security administration has shortfalls in certain areas, bringing this up to speed on processing claims and such, would it be able to identify efficiencies systems if there are any? >> ssa works very hard, as you know, in processing claims as

quickly as possible. things are never done as quickly as we would like. that has to do with appropriations. even doing things faster, while it would make a big difference, it does not have a substantial effect on the cost of the programs. when people are finally allowed their benefits, they do get back benefits by and large. >> did the sequester affected the administration? >> it does affect the money coming down by about 8%. >> apart from any conversation about potential savings, that is a conversation that needs to be how does well. i'm sorry for suggesting so many future conversations. in its to manage existing workload and it is a critical

need. it's true for the da as well, i'm sure. a ministry if funding is critical and something that is desperately needed in order to get the right amount, the right time, the right place, the right person. it comes down to appropriations. >> if i could include one tiny plug in the options for generating revenue. my office has on our website, ssa.gov/oect, you can see the vast array of provisions by the people who work right around here that affect social security in many, many different ways. >> thank you very much. one thing i wanted to mention is coming back to the politics of this.

the administration and others often referred to this as a superlative price index. i want to thank you all for attending. thank you to the panelists agree great peril. have a great day. -- thank you to the panelists for a great panel. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013]

>> if you missed any of this a a r p forum on benefits for the elderly, you can see it again -- any of this aarp forum, visit our video library. the cato institute is hosting an event at noon eastern right here on c-span. on c-span3, more from the transportation department.

you can watch that live at 1:45 p.m. eastern on c-span3. we cover the morning session of the american transportation association's conference today. here's a brief look at some of the comments. >> sensible steps need to be taken to tackle our deficit and budget challenges. it's not a luxury but an absolute necessity. today, we're looking up the challenge of how to move 100 million more people and four billion more tons of freight over the next three decades all while we are stretched to our limit and it continues to grow. texas transportation institute report, the annual cost of a highway congestion alone now costs our economy over $120 billion in per year at a cost of $800 annually to each

commuter. it is enough fuel to fill the new orleans superdome four times wasted annually. for the first time, the institute measured travel reliability underscoring the need to provide or transportation alternatives. increasing amounts of time have to be set aside for priority freeway trips. our airports are struggling to keep up. this is a way of confronting changing demand and airlines are making cutbacks two more flights to small and medium-sized cities. it simply cannot be ignored.

the most cost-effective, the least oil reliant, the easiest way to move both people and freight. two railroad tracks can mcarry as many travelers in one hour as a 16-lane highway. rail right of way only consumes one-third of the land required by roadways. >> a reminder that at noon we go live to the cato institute for a discussion on the european financial situation. right now, discussion on the obama administration and's environmental policy from today's "washington journal." host: good morning, thank you for being here. i wanted to talk to you about what is on the horizon for the environmental agenda in 2013. let's look at the president's

cabinet. what are you learning about his goals for his second term based on who he wants to work with? guest: as we saw both in the state of the inning and inaugural speech, president obama has made it clear that climate change is a very top priority. that is why we are excited about the new nominees he has put forward. four years ago, when he announced his first set of nominees, we called it the green at dream team. they were people coming in to make a difference on our public health and environment. look at the new appointments, the same kind of leaders we need. i am a big basketball fan. it is march madness. when president obama announced that jeanette mccarthy was going to be the new head of the epa, it was a slam dunk for the environment. she has been head of the air division. she will continue that as head

of the entire epa. she is smart. she is strategic. it is a great choice. host: at the same time, the president talked about his picks for energy secretary. what can you tell us about him? guest: secretary to was a scientist. secretary moines is also a scientist. -- secretary munez is also a scientist. gina mccarthy at epa, mr. munoz at the energy department, they understand the critical challenge of the moment. each of them need to use their authority to make progress on the issue of our time which is climate change. host: we saw one of the nominees who will have some purview of our and our mental issues, sally jewell. but to listen to her testimony. -- let's take a listen to some protest the money. [video clip] >> there is no question we need

balance on the use of our public lands. many people, as they enjoy the outdoors, jump in a car to get there. it requires fuel. many of the products that our industry produces are produced in some way or another with materials that derive from fossil fuels. it is important that we take a balanced approach to both energy development and resource development, with conservation and recreation. i do not think it is an either or.

i think it is a both and. by knowing the places that we all collectively believe me to be set aside and protected and recognizing the importance to our economy and our communities of a corporate, state, and responsible development of resources, if look at my background from working on the alaskan pipeline to working with organizations in alaska on mining and elements of oil and gas, i have had that kind of balanced perspective in my career. i would look forward to bringing that to this role. >> would it be safe to say that you agree that part of the department's mission on federal lands is to increase oil production? >> senator, we're blessed with many resources on federal lands. leaning into domestic oil and gas production is unimportant part of the mission particularly the bureau of land management but also the department of the interior. host: that is sally jewll --

jewell, the president's pick up for a head of the interior department. does that concern you? guest: there is a need for balance. she has a great history. she is head of rei, and her lifelong commitment has been to make sure that people appreciate, understand, and use the outdoors in ways that people -- that are appropriate. we're confident that she understands what we need to do to protect the most important places. one of the challenges is to make sure we do new energy development a right way. as president obama says, in need to lean into the clean energy teacher, make sure we deal with climate change, which is the challenge of our time. we need to push in the direction of more efficiency and renewables. host: one of the biggest

decisions facing the obama administration is aware the keystone xl pipeline. here is a map of where it could go. the state department is poised to greenlight this, essentially. we saw an environmental impact statement that came out. they did not find some of the concerns and our mentalists have raised. guest: from my perspective, it makes no sense. it is not in the national interest. the state department said there is no national security interest to do this, and in the long term, it creates 35 permanent jobs. it clearly has a negative impact on the environment. the new secretary of state, mr. kerrey, was the leading champion in the united states who understands what climate change is the challenge of our time. as he looks closely at the

record that will be created, we're confident he will determine that this does not create our national security, and will clearly do major damage to the environment in the pace a climate change. "the new york times" has an editorial with that sentiment. host: a recent story, the state department opens up the door to keystone xl. guest: let's be clear, we were disappointed in the state department report on the perspective on the impact on climate change. somehow they claim that this development will happen anyway. that makes no sense. the pipeline will basically big one big -- for taking the dirtiest oil in the planet, running it through the heartland of our country, and most of it will be shipped overseas to china.

it will not help our national security. it will go through in our monthly sensitive areas in nebraska. it makes no sense. we think the state department was wrong in not underscoring as what we see as many more climate change impact from the pipeline. we cannot take all the oil and natural gas and all the coal out of the ground. the plant has no ability to survive we do that. we need to leave the dirtiest will in the ground. host: we will see a hearing on the keystone xl pipeline. robert menendez, democrat of new jersey, plans to hold a hearing and the keystone route. you talked about climate change legislation. where do you see signs that that will be picked up? we're seeing a lot in the news

about immigration reform, gun control. its climate change on the back burner? guest: clearly, it is not. let's be clear -- gun safety and -- gun safety legislation, immigration, that needs to go through congress. we do not anticipate major legislation to move through congress. there are some climate deniers running the house of representatives. this house of representatives that just ended was the most anti-environmental. the president under the clean air act can make major progress. three things -- raise his voice, continue to educate the public about the climate change problem. he has begun to do that clearly in his state of the union address and inaugural address. secondly, the epa has the authority under the clean air act to make major progress. i have already cut major carbon pollution from automobiles, the single biggest step this government has ever taken. now they can do the same on power plants. they can impose standards for new power plants. once they finish that this year, they need to do the same thing for existing power plants. the president can elevate his voice. number two, the epa needs to make progress in cutting pollution from power plants. number three, we need to reject the keystone xl pipeline. host: you just came out with

your and our mental scorecard for 2012. it ranks members of congress. -- your environmental scorecard for 2012. it ranks members of congress. if you want to join the conversation, these are the numbers -- our first caller is dave in pennsylvania, a republican. caller: good morning. i wonder who your favorite basketball team is. host: i am georgetown all the way. -- guest: i'm a georgetown fan all the way. [laughter] caller: i knew it. i wondered if you could

extrapolate on a president obama's agenda in so far as what he is planning on doing to prevent urban sprawl and to keep some reservation land open for anything ranging from overpopulation to just protecting some of our natural resources. number two, i am very disappointed in recent years because it seems very few people legislatively address animal rights, animal welfare, food supply, all of that. i recently changed from a voracious carnivore to more of a vegetarian, based upon my interpretation of our animal welfare laws and the slaughtering process. sorry to be dramatic. i was wondering if i could get your feedback on some of those

issues. guest: i appreciate the question. as we rebuild our cities, make sure the transportation systems work to make sure citizens can get around more easily. washington, d.c., is becoming a model for all that stuff. make sure we do not encourage the sprawl to the outer, outer suburbs. better quality of life with less pollution. a vegetarian diet can be very healthy. look around to the state. there is a lot of activity going on.

be in touch with some of them. host: james in wichita, kansas. caller: good morning. i want to comment that the epa does a bang-up job. you can now swim in the tidal basin. the reality is legislatures have decided to gut as much of the clean air, clean water act as possible. deep water drilling is one example. the never ending assault has to be continued. there is a lot of people behind you. thank you very much. >> bed rock laws were passed back to the 1970's. president nixon signed those

laws and there was bipartisan support. a lot of them are still intact. cutting pollution from power plants and automobiles. the united states house was the most anti environmental in history. there was a fire wall to weaken the clean water act. we've basically kept those laws in tact. there has been a lot of attack but the public is showing support. the public likes protecting our health. the public is still on our side and the senate has blocked all

those efforts. host: here is the voting score card. the red is the lowest scores. you can see the states moving up to green, the best environmental scores. the house here, the senate here. how are you seeing legislation move forward if the house has a lot of anti environmental votes. >> if folks want more information, they can go to lcv.org. you can search back to 1971. it is a challenge. over 200 votes were held in the house to weaken environmental protection. senator boxer how to block all those efforts in the senate. we need to make sure that we get more bipartisan support in both houses. republicans and democrats have

understood this is not a partisan issue. one of the green as members of congress from both sides of the aisle understands this. we need to build back at the grass roots will. we're seeing progress in states across the country. host: joe writes in on twitter -- guest: this is not about every

pipeline. many will go forward and that is a fact of life. we get energy from many different sources. we will be using natural gas and coal and oil. we need to move toward a clean energy economy. that means more renewables. this is the dirtiest oil on the planet and does not need to come out of the ground. it will not increase our energy security. it will do permanent damage to the planet. we cannot afford to have keystone go forward. host: we have a question about fracking. guest: natural gas is a challenging situation right now.

over 450 new coals have not been built. that is the biggest source of carbon pollution, power plants. fracking is challenging. in 2005, was president cheney got an exemption in the energy act for this process called fracking. if fracking is going to happen, we should make sure we have a better right to know so we know which chemicals are being injected into the ground. injected into the ground.