of the american people so the united states of america can get back on a solid foundation and what is un doing? he is starving his people. it is pretty hard for us to figure that out. >> thank you. >> president obama unveiled his budget request. the 10-year blueprint would cut $1 trillion from programs and 800 -- at $800 billion in taxes ncluding 4 cents attaper pack n cigarettes. later, white house budget officials to questions from reporters on the plan. -- take questions from reporters on the plan.

>> good morning, everybody. please have a seat. as president, my top priority is to do everything i can to reignite what i consider to be the true engine of the american economy. arising, thriving middle-class. that is what i think about every day and that is the driving force behind every decision that i make. over the past three years, our businesses have created $3.65 million new jobs. are at an all-ts time high. we have to get wages and incomes rising as well. our deficit are falling. at the fastest pace in years. we can do more to bring them down in a balanced and responsible way. is point is our economy poised for progress as long as washington does not get in the

way. frankly, the american people deserve better than what we have been seeing. a short sighted, crisis-driven decision making like the across- the-board spending cuts that are hurting communities out there. cuts that economists predict will cost us hundreds of thousands of jobs. if we want to keep rebuilding our economy on a stronger, more stable foundation, then we got to get smarter about our priorities as a nation. and that's what the budget i'm sending to congress today represents. a fiscally responsible blueprint for middle-class jobs and growth. for years the debate in this town has raged between reducing our deficits at all costs and making the investments necessary to grow our economy. this budget answers that argument because we can do both. we can grow our economy and

shrink our deficits. in fact, as we saw in the 1990's, nothing shrinks deficits faster than a growing economy. that's been my goal since i took office, and that should be our goal going forward. at a time when too many americans are looking for work, my budget begins by making targeted investments in areas that will create jobs right now and prime our economy to keep generating good jobs down the road. the said in my state of union address, we should ask ourselves three questions every day -- how do we make america a magnet for new jobs, how do we give our workers the skills they need to do those jobs and how do we make sure that hard work leads to a decent living? to make america a magnet for good jobs, this budget invests in new manufacturing hubs to help turn regions left behind by globalization into global centers of high-tech jobs. we'll spark new american innovation and industry with cutting edge research like the

initiative i announced to map the human brain and cure disease. we'll continue our march towards energy independence and address the threat of climate change. and our rebuild america partnership will attract private investment to put construction workers back on the job rebuilding our roads, our bridges and our schools. in turn, attracting more new business to communities across the country. to help workers earn the skills they need to fill those jobs, we'll work with states to make high-quality preschool available to every child in america. and we're going to pay for it by raising taxes on tobacco products that harm our young people. it's the right thing to do. \[applause] we'll reform our high schools and job training programs to equip more americans with the skills they need to compete in the 21st century economy. and we'll help more middle-class families afford the rising cost of college.

to make sure hard work is rewarded, we'll build new ladders of opportunity into the middle class for anybody who's willing to work hard to climb them. so we'll partner with 20 of our communities hit hardest by the recession to help them improve housing and education and business investment and we should make the minimum wage a wage you can live on because no one who works full time should have to raise his or her family in poverty. \[applause] my budget also replaces the foolish across-the-board spending cuts that are already hurting our economy. and i have to point out that many of the same members of congress who supported deep cuts are now the ones complaining about them the loudest as they hit their own communities. of course, the people i feel for are the people who are directly feeling the pain of these cuts, the people who can

least afford it. they're hurting military communities that have already sacrificed enough. classre hurting middle- families. there are children who have had to enter a lottery to determine which of them get to stay in their head start programs with their friends. there are seniors who depend on programs like meals on wheels so they can live independently but are seeing their services cut. that's what the so-called sequester means. some people may not have been impacted but there are a lot of folks who are being increasingly impacted all across this country, and that's why my budget replaces these cuts with smarter ones, making long-term reforms, eliminating actual waste and programs we don't need any more. so building new roads and bridges, educating our children from the youngest age, helping more families afford college, making sure that hard work pays, these are things that should not be partisan, they should not be controversial, we need to make them happen.

my budget makes these investments to grow our economy and create jobs and it does so without adding a dime to our deficits. now, on the topic of deficits, despite all the noise in approximate washington, here's a clear and -- in washington, here's a clear and unasailable fact. our deficits are already falling. over the past two years, i've signed legislation that will reduce our deficits by more than $2.5 trillion, more than 2/3 of it through spending cuts, and the rest through asking the wealthiest americans to be paying their fair share. that doesn't mean we don't have more work to do, but here's how we finish the job. my budget will reduce our deficits by nearly another $2 trillion so that all told we will have surpassed the goal of $4 trillion in deficit reduction that independent economists believe we need to

stabilize our finances, but it does so in a balanced and responsible way, a way that most americans prefer. both parties, for example, agree that the rising costs of caring for an aging generation is the single biggest driver of long-term deficits. and the truth is for those like me who deeply believe in our social insurance programs think it's one of the core things that our government needs to do if we want to keep medicare working as well as it has, and we want to preserve the ironclad guarantee that medicare represents, then we're going to have to make some changes. but they don't have to be drastic ones. and instead of making drastic ones later, what we should be doing is making some manageable ones now. the reforms i'm proposing will

strengthen medicare for future generations without undermining that ironclad guarantee that medicare represents. we'll reduce our government's medicare bills by finding new ways to reduce the cost of health care, not by shifting the costs to seniors or the poor or families with disabilities. there are reforms that keeps the promise we made to our seniors, basic security that's rock solid and dependable and there for you when you need it. that's what my budget represents. my budget does also contain the compromise i offered speaker boehner at the end of last year, including reforms championed by republican leaders in congress. and i don't believe that all these ideas are optimal, but i'm willing to accept them as part of a compromise. if and only if they contain protections for the most vulnerable americans. but if we're serious about deficit reduction, then these reforms have to go hand in hand

with reforming our tax code, to make it more simple and more fair so that the wealthiest individuals and biggest corporations cannot keep taking advantage of loopholes and deductions that most americans don't get. that's the bottom line. if you're serious about deficit reduction, then there's no excuse to keep these loopholes open. they don't serve an economic purpose. they don't grow our economy. they don't put people back to work. all they do is to allow folks who are already well-off and well connected game the system. if anyone thinks i'll finish the job of deficit reduction on the backs of middle-class families or through spending cuts alone, that actually hurt our economy short term, they should think again. deficitcomes to reduction, i've already met republicans more than halfway, so in the coming days and weeks, i hope that republicans

will come forward and demonstrate that there -- they're serious about the deficits and debt as they claim to be. so growing our economy, creating jobs, shrinking our deficits, keeping our promise to the generation that made us great but also investing in the next generation, the next generation that will make us even greater, these are not conflicting goals. we can do them in concerts. that's what my budget does. that's why i'm so grateful for the great work that jeff zients and his team has done in shaping this budget. the numbers work. there's not a lot of smoke and mirrors in here. and if we can come together, have a serious, reasoned debate not driven by politics and come together around common sense and compromise, then i'm confident we'll move this country forward and leave behind something better for our children.

that's our task. thank you. god bless you. god bless the united states of america. [applause] >> reaction from mitch mcconnell on the president has a budget. we'll also hear from senator robb portman. >> nearly every one of his budget so far is late. really late. after two months he has kept the country and hold, the house and they have passed their own budgets. it is hard to see with the white

house plans to accomplish. i want to leave the intention is not to purposely low of the rest of process so the president can campaign the budget process he blew up but from the reports we're seeing, it is getting harder and harder not to draw that conclusion. after all, the document headed our way does not appear designed to bridge the differences between house and senate passed budgets. that is the role thamericans wod expect the president to play but his budget does not represent some grand. from the left to center. it is a pimmit from left to left. arehese reports we seeing are correct, it is the same thing we have seen year after year after year. that is really too bad because it is not like we do not know the kinds of things that need to backne to get our budget

to balance and americans back to work. we need to provide families and businesses a more fair and flatter tax code so they can save for the future and create jobs. we do not need a budget that piles on tax increase after tax increase. we need to get renne out of the way so the private sector can actually grow again. we do not need a budget that spins more money we do not have. we need a balanced budget that encourages growth and job creation, we do not need an extreme, and balanced budget that will not balance in your lifetime or mine. the white house initially made some fantastic claims about the amount of deficit reductions, supposedly contained in its budget but when you cut through the facts it looks like there is less than $600 billion worth of production in there and that is over a decade, all of it coming

-- surprisingly from texaco tax increases. in other words it is not a serious plan. for the most part, just another left-wing wish list. let me clarify a wish list with an asterisk. the president concedes that something needs to be done to save entitlements from their slide toward bankruptcy. he is coming to grips with the mathematics year. it is well past time for form and it is something the president ought to want to do because he presumably cares about saving entitlement programs, because he wants another excuse to raise taxes. as we start to think about reforming entitlement programs, we should think about reform this way. will the changes we haimake help modernize and elements over the long term in order to eventually meet the needs of our rapidly aging population in a realistic way, or just kick the can down the road without actually

solving the problem? , kicking the can down the road is how we got to this point in the first casplace. if the president and his allies care about social security and medicare and i take them at their word that they do, then they need to prove that to commitment by proposing ambitious, forward leaning structural reforms to save them. this budget is a chance to do that, and i hope it will, but if they choose to continue using these programs as campaign weapons instead, it points to a clear outcome. the entitlement programs ouso my americans rely upon will go bankrupt and today. washington democrats will have to live with that legacy. to that point, but republicans only control a tiny sliver of the federal

government, so there's not much we cannot -- we can do until the president and his allies get serious about reform. it is way past time they did. we do not need another repeated budget. we have had enough of those in the past few years. we needed a serious reform- oriented budget. sadly, i do not believe we will see that one today. mr. president, i yield the floor. latest will be the submission in decades. i hope what the president submits is something serious,

that helps us address the central challenge of our times. i see some young pages on the floor and there are lots of young people who i met with this morning from ohio state university and i told them the same thing which is their future is at stake. it is about our economy and is about the future. are we going to get control of these record debts and deficits and began to turn our country toward the america that has been something we saw much have taken for granted which is the america that is growing and prospering and wages are growing up. will have the ability to make our course and be a beacon of hope and opportunity. are we continuing the slide we're on now? wages have gone down. the deficit and debt continues to grow at unacceptable levels. there are places where they did not watch what was happening in terms of their fiscal house. they allowed the debt and

deficits to grow to such a large extent they became as large as the entire economy of this country's. guess what? year, our- as of this debt is the size of our entire economy. there are studies that indicate that when we get to that kind available there is a big impact on economic growth and we're seeing it. we're living through the weakest economic recovery since the great depression. whether it is measured in terms of our economic growth for in terms of jobs, we had a very disappointing report from last month on the job front showing wheat gained 88,000 jobs, disappointing all the projections but significantly, half a million people, almost 500,000 people left the work force. we have the lowest labor participation rate, the percentage of people working that we have had since the days of jimmy carter. that is over three decades. in some ways the policies of

jimmy carter have been replicated over the last two years in the sense of larger government, more taxes, more regulations and what we're seeing is an economy that is starting to resemble what happened in the carter days. that is not acceptable. we need to provide opportunities for americans who are on the first rung of the latter to get to the second and third in the fourth. those of the folks who are being hurt the worst. with this economic malaise we have with these job numbers that are disappointing and they do relate back to the deficit and debt. there is a study by a couple of economists that indicate we would have 1 million more jobs this year alone. if we do not have the debt at these higher levels. we're told we can expect the deficit of $1 trillion again or more. the fourth year in a row. never in history have we had debts and deficits of $1 trillion. and the president's budget it

appears will not fundamentally changed the course we're on. from what i have heard from the media reports and so on is likely to add $7 trillion to the debt over the next 10 years. putting our debt that is already over $16 trillion again, at a level where it is the size of our economy where we have, unfortunately, continued economic doldrums because we can i get out of this huge overhang of debt and deficit. it is time to make a change. it is a moment for trees. it is an opportunity to address the challenge. my fear is the budget will not be adequate. there are some things in the budget i think will be positive. i want to say that. the president is likely to propose a more accurate measure of inflation after readjust for the cost of living and providing for the unsustainable but important program of social

security. social security is in deficit meaning that $77 billion is projected to be spent for benefits and social security > the amount of payroll taxes coming in. so people who say social security is ok, it is in fine shape, $77 billion shortfall is not ok. also we're told that the disability trust fund will be insolvent, a bankrupt, belly up by 2016. that is a few years from now. more people have got on disability that have been added to the work rules in the last four years. this trust fund is going bankrupt in a few years. even if you include all the fire you's in the trust fund for the old age and survivors trust fund, the fundamental trust fund for social security, that will be insolvent. i 2033. that is not that long from now. folks are retiring today, many of whom are likely to live to that point. for retirees today, they're

looking at the possibility of this trust fund going bankrupt and what happens when that goes bankrupt? there's a 25% cut in benefits. that is the law. so with this hemorrhaging every year, this year again, $77 billion with these trust funds heading toward insolvency, social security does have to be addressed and i commend the president for saying let's use the right measure of inflation. it happens to affect the benefit side and the tax side. it actually increases taxes as well because there will not be the same adjustment for the rates for indexing on the income tax side. so there is a revenue gain through this proposal and also there is some savings on the programmatic side because the more accurate measure of inflation is used. this is a controversial issue among some folks. i understand that in -- and i commend the president for putting that in the budget as i am told he will. having said that, that is one step in the right direction. unfortunately, even with that

proposal, a social security will continue to have these enormous shortfalls. on the health care side, i am told the president may make a proposal to reduce spending in health care and that is a good thing. not adequate to the task before us. the total will be $400 billion. we will argue about where that comes from but it looks like most will come out of providers. the people who are providing health care to lower their reimbursement at a time when more providers are saying they're not interested in providing care under medicare and medicaid because the reimbursement is too low. we need to be careful of how it is done but let's assume we agree. what would that mean? that would mean that the federal health-care expenses instead of going up 110%, more than doubling, over the next 10 years, would go up about 100%. would -- that would double. have ant is that we challenge in front of us that requires a much more aggressive approach. it requires us to be honest with

the american people. things are not going well. we're not turning the corner. these incredible of debts and deficits do not enable us to do that. it is like a shadow over the economy and it is a wet blanket on the economy today. unfortunately, for the young people listening today, it is going to affect their future in very significant ways if we do not address the problem. let's see what happens with this budget proposal today. i am hopeful it will have more in terms of savings and that has been suggested in the media and the savings that are in there i think we ought to support as republicans and democrats alike and encourage the president to work with us on taking it to the next level. to truly address this challenge. on the tax side we're told that the president is likely to recommend additional increases in tax. remember the taxes were increased $620 billion this year a few months ago. the ink is barely dry on that huge tax increase.

the president apparently is likely to recommend taxes at about that level again. $600 billion or more. some say it is more like $1.50 trillion which is in the senate floor but maybe it is more like $600 billion. what ever it is, we have to of knowledge that increasing taxes again is going to hurt the economy. there is no question about it. the question is whether it is appropriate to have a higher level of taxation in our economy. let's think about that for a moment. we're told by the congressional budget office which is the non- partisan group that analyzes all these budget proposals, currently, we have taxes at a percent of the economy at levels in 2015 which would be below our historic average. in a few short years, we're looking at taxes at 19.1% of the economy. it is 18.3% so it is higher than the average.

we're under current law looking at higher taxes partly because of the fiscal cliff agreement and the new taxes that were raised over 10 years. handpending on the other which is already at levels higher than the historic average which is 20%, today is that 23%, is projected to go up. over the next three decades according to the cbo, it goes from 20% to an average, over the last 50 years, to about 39% and then they stopped counting because they cannot imagine spending at that level because we have no sense of having -- getting revenue at that level. no one is talking about taxes that would be increased that high. it would be tripling the taxes. at least. so, these are issues we need to talk about as a country. how much taxation do we want to have on our economy? how much spending to we want to have? we ought to do is come up with a plan. 10 years from now, where do we want to be?

republicans are going for a balanced budget. we think true balance of means you balance the budget. you stop spending more than you take in. --ocrats would like to seize seymour taxes. the issue is not the revenue. spending and the that must be addressed. i think the president for his indulgence and again, ask my colleagues on both sides of the aisle, let's work together. to get america back on track and to solve this problem that if we do not deal with it will not allow our economy to prosper and will not allow america to be that beacon of opportunity for the rest of the world. >> more capitol hill reaction to the president's $3.80 trillion budget request for 2014. we will hear from house speaker john boehner and other house republican leaders. the president has backtracked on some of his entitlement reforms in conversations we have

had a year-and-a-half ago. he does deserve some credit for some incremental entitlement reforms. they have outlined in his budget. i would hope that he would not hold hostage these modest reforms for his demand for bigger tax hikes. why do we do what we can agree to do, why do we find the common ground that we do have and move on that? the president got a tax hike in january. we need -- do not need to be raising taxes on the american people. i am hoping we will have an opportunity through the budget process to come to some agreement. good morning. finally the president has offered his budget to the american people. what we see in the document is more of the same. more spending, higher taxes, more debt. the speaker talked about the fact that there are some things

in the budget beyond the tax increases that frankly we can find some agreement on. i share the sentiment that we ought to see if we can set aside the divisiveness and come together to produce some results for the people that sent this year. if the president believes as we do that the programs like medicare, medicaid, social security are on the path of bankruptcy and we can do some things to put them back on the right course and save them, to protect the beneficiaries of these programs, we ought to do so. and we ought to do so without holding them hostage for more tax hikes. as the speaker indicated, listen, the disagreements we have in this town are well published and well-known, but let's start anew and try and say, look, set aside these differences and let's come together on the things we can agree on.

i think most people do that in their daily lives and expect nothing less of us here in washington. >> well, now that we've -- we'll see the president's budget finally, we'll have clear differences. the president's budget does not balance. this is a challenge that we have. you know, nothing came stronger in showing that until yesterday. yesterday i took a group of freshmen down to watch the selling of our debt. you know, we do that every monday and tuesday. other times we expand it out to other days. you walk into the room and you watch the billions of dollars being sold and you watch who's buying it. from rates happens to be low right now, but just the increase in the interest rate itself can break us. but the addition day after day after day, this is the moment, the opportunity and truthfully it's the fairness of the

american people to put a path onto a balanced budget. i look forward to the day we don't have to go to borrow in the aspect of where we're going. and as i took these freshmen members around and they looked into the glass as the minutes -- the billions of dollars went out, you know how long we're borrowing, a simple month, because we have to come right back again and do it one more time. that to me is the real challenge and the differences between these two budgets. this is an opportunity to come together with one simple goal, find a budget that will balance. >> as we remember a great leader, margaret thatcher, this week i thought i would just share a quote in the words of margaret thatcher.

you may have to fight a battle more than once to win it. as we stand here before you today, it's the same battle. it's a battle for america's future, for the policies that are going to make america strong, that are going to create jobs, that are going to stronger economy, that are going to keep taxes lower so that families have more take- home pay and that also that the congress is doing its job as far as putting forward a budget, ours that balances in 10 years provides that certainty and that confidence so that people can make decisions moving forward. and the reason that it is important is because it does impact the college grads that are out there trying to find jobs and it impacts families that are continuing to struggle, the seniors that do not have confidence as to these safety net programs. and when i was home over the

break, i continued to hear this message everywhere i went in eastern washington, d.c., the continued concerns over our economy, the struggles to find jobs, the uncertainty over what tax rates are going to be or what health care reform is going to be going forward. and our basic responsibility is to get a budget in place and one that balances in 10 years is one that will provide that confidence and that certainty for the american people that they need so that america will be stronger and a better country. >> well, we do honor margaret thatcher this week. i so admired her courage, her strength of character and her conservative leadership. and she provided such a role model. that's probably the reason both cathy and i have her top of mind this morning. and she also once said, i love argument, i love debate. and so today we will continue the debate in washington in

gusto in honor of margaret thatcher. and there are so many major issues to debate because the american people are hurting, and we will delve into the president's budget this morning and learn more about it. but it appears at this point to be very much a status quo budget, that just has more of the same, more tax increases, more spending, more debt, more deficit, higher unemployment, less g.d.p. growth. that stands in stark contrast to the republican vision that we laid out a few short weeks ago, a budget that balances in 10 years, that puts us on a path to energy independence which is great for american manufacturing and families concerned about their pocketbook. it has fundamental comprehensive tax reform in it which ends crony capitalism, stops picking winners and losers, closes special interest loopholes, makes a fairer,

flatter tax code for all americans. it addresses the issue of our autopilot spending programs, setting aside everyone who's 55 and older, making no changes to those in retirement or near retirement but saves those programs for the young people that are coming up. and most importantly, it increases economic growth and opportunity, encourages job creation here in the united states. so we look forward to a continued debate this week. >> well, thank you. i want to thank the leadership team for inviting me here today. this is my first opportunity to greet most of you. my name's luke messer, i'm a congressman from east central and southeastern indiana, indiana's sixth congressional district. i want to echo the comments made by others that we're encouraged to see in this budget the fact that the president

mentioned entitlement reform but discouraged to see him lock that reform into his demand for further tax increases. hasknow, everybody up here family members, friends and neighbors who are dependent on social security and medicare. in my case, i was raised in a single parent family by a mother who's nearing retirement. she still works at the delta faucet factory in greensburg. i have an 85-year-old grandmother who worked her whole life as a cook and janitor. both are dependent on social security and medicare and would not be able to make it through their retirement if these programs are not protected and preserved. the president was fond of saying in his campaign it's simply math. well, the simple math is if you are not reforming medicare and social security, then you see these programs fail. it's not acceptable that happen. the president indicated in this budget that he would support the

reform of social security and medicare. if that's the idea then let's go to work on doing that work and not tie that important improvement to further tax increases. thank you. >> speaker boehner, around 11:00, senators manchin and toomey are expected to send an amendment to gun control for background checks. >> any bill that passes the senate we'll review it. in the meantime we'll look at hearings looking at the source of violence in our country, but i want to wait and sew what actually passes over in the senate. >> will the house veto that legislation? there's some concern among democrats that it will be a pocket veto. >> the senate passes a bill, the house will review it. >> on the specific issue,

though, are house republicans opened to the idea of expanding background checks for gun purchases? and how much would senator toomey's endorsement, a known conservative, help with, you know, help with that? >> well, we'll wait and see what the senate does. it's one thing for two members to come to some agreement. it doesn't substitute the will for the other 98 members. so we'll wait and see what the senate does. >> what do you think -- should something like this be put into law? >> what i think is that we're going to review whatever the senate might pass. >> recently, you said that you supported real background checks for everyone. this bill only limits it -- >> no, no. no, that's not what i said. one of the issues that we have today is that if there is a background check required that they don't actually check all the backgrounds. that's what i was suggesting. laws not enforcing the that we have on the books today. and so we're going to have a background check that's in the law, let's make sure we do our real background check which not in every case happens. >> just limiting to internet

sales and gun shows, it doesn't create any kind of national registry. is this something that you think house republicans can -- >> again, i think it's important for the senate to do its work. and once they do their work, we'll be happy to review it. >> what's the best way for republicans to deal with debt limit this time around? >> i think we made it clear that the sequester will stay in place until we have cuts and reforms that puts us on a path to balance the budget over the next 10 years. and if -- as we look at the debt limit, those are the kind of changes that we believe will be important that would allow us to increase the debt limit. thanks. >> mr. speaker, on the budget --budget question, is the

will hear from alan kruger and gene spurling. afternoon, ladies and gentlemen, thank you for being here. the president announced today from the rose garden that he has has submitted his budget to congress. you heard him make a very important point that his number one priority is what it has always been.

economic growth and job creation. that strengthens the middle class. he also made the very important point that you can grow the economy and strengthen the middle class and reduce our deficits in a responsible way. you can do both. .hat is what he has been doing he signed into law a $2.50 trillion deficit and debt reduction, two-thirds of that coming from spending cuts and the budget he presents today will further reduce the deficit over 10 years by more than $1.80 trillion. i have with me today four members of the president's team to discuss the budget with you. i will begin with the acting director of the office of management and budget. he will then introduce the other participants and i will remain to field your questions after they make their presentations.

thank you. thanks, jay, and good afternoon, everyone. i will to a quick review of the major components and i will turn to alan to review the economic assumptions and will be what through the other policy highlights. the main message of the president was a budget is you can make critical investments to strengthen the middle class, create jobs, and grow the economy while continuing to reduce the deficit in a balanced way. we can do both balance deficit reduction and jobs investments. on the left-hand side, in terms of balance deficit reduction, the budget bills off the reduction achieved to date and includes the fiscal cliff compromise offer to speaker john boehner from last december.

replacese, the budget the indiscriminate cuts of this sequestered with balance deficit reduction. it turns the sequester off. at the same time, the president does the budget proposes important job investments to enhance tackett -- enhance economic growth through skills and competitiveness and investments in education and r&d. all these investments are fully paid for. the investments do not add a dime to the deficit. , over theduction past few years, democrats and republicans have worked together to cut the deficit by more than $2.50 trillion. here is the breakdown of deficit reduction achieved to date. the budget control act capt. -- discretionary spending, saving

over $1 trillion. another three under $70 billion in savings through 2011 appropriations, the end of last year's fiscal cliff agreement reduced the deficit by more than $600 billion. this deficit reduction a lowered interest payments saving $480 .illion more -- more than $2.50 trillion has been achieved. $4 president is committed to trillion. this is the amount for the benchmark, if you will, that that bowles-simpson and other economists have established to put this on the correct path. the president was a budget finishes the job with an

additional $1.80 trillion in deficit reduction. this $1.80 trillion is from the compromise offer the president made to speaker john boehner during the fiscal cliff negotiations in december. by including this offer in the budget, the president is showing his willingness to compromise and make tough choices in his commitment to putting the country on a sustainable fiscal path. here are the components of the deficit reduction that tickets from the $2.50 trillion achieved to date to over the $4 trillion target. on left side, starting with a $2.50 trillion we have achieved, the first bar, $400 billion in health savings that strengthen medicare by squeezing out waste and incentivizing delivery of high quality and efficient health care. next, to honor dollars billion in savings from other mandatory

programs including reductions to foreign subsidies -- farm subsidies, performs to retirement contributions, and selling of unneeded federal real estate. next, $230 billion in savings by indexing annual and placement -- inflation adjustment to the changed \[inaudible] cpi. bca caps.yond the and revenues in tax reform by closing loopholes and reducing tax benefit for families with more than $200 -- $200,000 in income. invest $50 time, we billion in infrastructure to

repair our roads, bridges, and create jobs. an immediate $50 billion investment in infrastructure. in total, is the taves $1.80 trillion in additional deficit reduction over the next 10 years, bringing total deficit reduction to a $4.30 trillion with more than $2 in spending cuts for every dollar in revenue. to be very clear, this offer includes difficult cuts the president would not propose on their own including cpi, which the president is only willing to do with protections for the vulnerable and as part of the balance plan. -- balanced plan. the president is showing his willingness to take -- make tough choices in his commitment to reducing the deficit and putting the country on a

sustainable fiscal path. here are the annual deficits from 20123 20/203 as a result of this deficit reduction. as you can see, in 2012, the deficit was 7% as a percent of the economy. the budget phases in deficit reduction to support the ongoing recovery and by 2016, the deficit is below 3%. 2% at 1.7%.is below 2023, a deficit 1.7%. as a result of the deficit reduction, that as a route -- a percentage of the economy is on a declining path. decliningg -- with deficits and declining debt, the budget achieves an important milestone of fiscal

responsibility and sustainability. the budget reaches this important fiscal milestone while investing in the drivers of economic growth. in doing so, it demonstrates we do not have to choose between deficit reduction and economic growth. it shows we can do both. and indeed, we must do both. the country will not prosper if we have unsustainable deficits but it also will not prosper if our infrastructure is crumbling and our workers lack the skills to compete. through paid for initiatives like pre k for all, job training, and accelerated infrastructure investment, this budget will enhance our nation's competitiveness and to balance deficit reduction, this budget will enhance confidence and laid the foundation for more durable economic growth. it is the right strategy for our economy, for creating jobs, and

fulfilling prosperity. let me handed off to alan. thank you. let me say a little bit about the process that underlies the products -- the forecast in the budget as well as some of the key components of the forecast. the forecast is made jointly by the council of economic advisers and the opposite of management and budget and the treasury department. in what is known as the derica of -- troika process. this is to enable these agencies to calculate spending and revenues. we concluded the forecast in the middle of may. out of date.nths theompleted the forecast in

middle of november. it is five months out of date today. we make the forecast under the presumption that the president's budget and policies will be put in place. that means that we assumed the sequester would not take effect. the budget replaces the sequester with a much smarter set of spending reductions which would be much better for the economy. theearing that in mind, forecast is a little out of date. on the other hand, i think if you compare our forecast to private sector port chester's -- forecasters, there are more current forecasts, we're still in the ballpark. over 2013, we are projecting gdp

growth to be 2.6%. that is assuming this requestor does not take effect. the congressional budget office has calculated that the sequester will reduce gdp growth by six -- 0.6 of a percentage point. our internal estimates are similar. that suggests gdp growth will be around 2% this year if the harmful rare -- sequester remains in place. that implies that overall economic growth in 2013 will look a lot like economic growth in 2012. 2.2 million jobs in 2012. disappointing thing is the economy is poised to grow more strongly. that is why we are projecting more deep the growth absent the sequester. we think -- the reason why we think the economy will grow more

strongly, the housing sector appears to have turned a corner. households are lot further along in the deleveraging process. corporate balance sheets are still quite strong. all of those conditions suggest the economy is in a position to do a lot better going forward but unfortunately, the sequester is a step backwards. the full 11 years that we forecasted, that is 2013 through 2023, the average gdp growth rate is 2.8%. that is above what we think the long run potential growth rate for the economy, there are slack resources as a result of the economic crisis. the long run potential growth rates in the economy we put at 2.3% to 2.4%. our projection is quite close to the congressional budget office

and private forecasters. the 2.8% figure i mentioned for our forecast on average over 2.7% 11 years compares to for the congressional office. very similar. let me next turned to the unemployment rate. the unemployment rate averaged 7.8% in the last quarter of 2012. it has since come down to 7.6% last month in march. toproject the rate to fall 7.5% by the end of this year. the average is 7.5% in the last quarter of 2013. and then to come down half a percentage point over each of the next three years so it would be 7% at the end of 2014. 2015.n

if we were to update the forecast today, that is one component that we might change slightly. the and employment rate has come down a bit faster than we expected when we made the forecast, when we made the forecast, the unemployment rate was 7.9%. last year, we saw the unemployment rate come down considerably faster than what our forecast had been. i would not be surprised if we're offline the same direction this year. if our forecast is conservative. i should note to our forecast exactly matches the average or private sector forecasters and the blue chips that was released this morning. inflation is projected to be 2.1% over this year and average 2.2% over the entire 11-year period we forecasted and that is very close to the congressional budget office and to private

forecasters. let me conclude by saying there are of course risks to any forecast. on the downside, the sequester i believe is a risk to our forecast as i mentioned. we do not assume the sequester would be in place. no one wants to sequester to be in place. it is where recognize this bad policy. shave 0.6 ofted to 1% of gdp growth. the european debt crisis remains a threat to the economy. geopolitical tensions from around the world also remain a threat. i would like to balance so on potential, there is for our forecast to surprise. i hate to call them risks, the opportunities are strong corporate balance sheets. if we list the uncertainty that has been weighing on the economy because of the budgetary issues

and the manufactured crises that have been causing uncertainty. that could help. there remains pent-up demand for durable goods, including cars. the housing market has been stabilizing nationwide. we're seeing home prices grow nationwide although some parts of the country are lagging behind. i think all of those are reasons why the economy is stronger this year and why there is potential for the forecast to be a bit conservative this year. let me turn it over next to gene. much benefit to me standing up at my high. i will stay seated. balance hits the right not just in terms of revenues

and entitlement savings. but the right balance in terms of an economic strategy that strengthens jobs and a recovery in the short term while strengthening our long term job creation and competitiveness. to do that, a budget needs to hit a fiscal sweet spot, which is that it needs to at one time, an economic plan at one time needs to create confidence that you are dealing with your long term fiscal challenges. that gives confidence to people deciding where to make long-term investment in job creation decisions and the u.s. is a place that is managing its long- term fiscal challenges. it also need to make sure that you are taking measures that are strengthening the recovery in job growth, particularly when you are coming back from the worst financial crisis since the great depression. and third, you need to make sure

you are making room for the things that will fundamentally make us competitive and will encourage more location of highway jobs -- high-wage jobs in the u.s. in the future and the key thing is a strong plan to jump-start job growth won't be as effective if people doubt if you're dealing with your long term fiscal future. a long strong plan that has austerity at a time when you're recovery is seeking to get its full momentum can be counter product for jobs and growth but also for your fiscal forecast. a strategy that forgets that we re competing against tough competitors around the world and what those components are that make it a magnet for job

creation. if you forget that you also fail. so hitting the sweet spot hits an economic strategy that the president has that deals with all of these together. jeff has described really well s it brings us under 2% of deficit -- percent of g.d.p. but let me do the other two components quickly and turn it ver to my companion. one, this plan is good for jobs right now because first of all, anti-jobsake away the nature of the sequester. independent experts estimate uld cost this economy from

500,000-750,000 jobs. as we do this long-term deficit reduction plans there, as the president said, measures to jump-start job growth right now. this budget does include key aspects from the american jobs act that does not have any long-term impacts of our deficit but as part of this comprehensive plan that we're giving momentum to the recovery now. in addition to taking away the contraction and the job-costing nature of the sequester, this still has -- i will put in three buckets, a strong infrastructure comb poe innocent that is accelerated. neven the offer that the president gave speaker boehner the fix ost of it in it first.

secondly, there are measures that are designed to help those communities and individuals who have been most hard hit. things like one time $15 billion for project rebuild to help with the housing crisis today. cecilia workedat together that gives people funds in the private sector to encourage those who have been e longest unemployed or most disadvantaged to get back into the private sector jobs. third, training to get people back to work. there's a one time tax credit for small businesses for sbretion their wages and jobs this year -- businesses for increasing their wages and jobs this year. these make most sense as part of a long-term package where it is

jump-starting jobs in a context where a 10-year plan is bringing down the deficit. secondly, this plan does include, even with the deficit reduction and the tight budgets, things that the president believes are critical for our competitiveness. that is for example, a focus on manufacturing, includes our manufacturing innovation institute, which we've already piloted. it includes expanding and making permanent the tax credit. it includes helping small businesses by having a $500,000 provision for small businesses. it includes a long-term commit to infrastructure and a strong authorize of our highway bill. it includes a commitment on skills. again, our community college proposal but also a proposal that would consolidate our two

major programs for displaced workers and put them together in one plan with greater accountability, with focus on results and a focus on helping everybody regardless how they lost the job and the proposal here would mean 1.2 million instead of 500,000 people would get re-employment assistance at this critical time in our economy. so we realize as we are jump-starting jobs, as we are putting in long-term deficit reduction, we're looking at what going to make us most competitive. the tax reform could lower rates and reduce loopholes and still take on abuses in tax havens across the country that could be good for jobs. this is another key part. some of the critical things,

energy and others i will leave and turn them over to cecilia munoz. >> thank you. by staying a the table he was saving me from a pair of eyebrows above the podium so thank you for that. this budget is built on the progress made over the last several years. you've heard us describe and the president himself describe we need to equip every american with the skills they need to do the job and to get on a clear path to the middle-class. that education has to start in the earlier years so kids start school ready to learn. so there is a return on the investment for preschool is very high. we also know that a lot of middle-class parents can't afford private preschool, so this proposal that every 4-year-old has access to high

quality preschool. it delivers a host of other benefits to our society, including saving hard-working families a lot of money, thousands each year in child care costs. the budget at the state partnership, much like the k-12 education system works. it creates incentives for schools to create all day kindergarten and to expand opportunities for children younger than the age 4. it is investment of $75 billion, which we plan to raise the tax a pack on .94 cigarettes. this is a major investment on the economy and the future of our children. i would say anyone who has been around a 4-year-old they are a

powerful force for the future and they are more than worth the investment. e prek proposal is part of a suite. as well as a $15 billion investment in successful evidence-based voluntaryary programs to help the most vulnerable first-time parents and their families. that is a program that demonstrates extraordinary benefits to those kids and the families and the rest of us overall. i want to touch also on the promise proposal this is consistent with the president's vision to make sure we're growing the middle-class and protecting the middle-class. also providing ladders for people who are struggling to reach the middle-class.

it san investment in 20 of the hardest hit communities across the community with the highest poverty. it does this by expanding tax redits but making additional investments in administration programs we think of programs that have demonstrated real value and a real impact. a $300 million investment in the department of education neighborhoods program and an nvestment in the huds program. to make sure we're helping local leadership to get communities on the other side of the tipping point to create jobs, to make sure folks are ready for those jobs and and to make it vablets for these jobs. part of the initiative is to

expand the minimum wage to $9. there are also -- the budget outlines a variety of proposals to continue in investing a competitive work force. something you heard the president describe in the state of the union address, it is a high school redesign proposal. it is a competitive $300 million fund to provide challenge and relevant learning experiences to children in high school linking them to higher education, inking them to complers. -- employers. you heard hymn mention the community college careers program and there is also in this budget the temperature strigs of the high quality and expansion of education in stem ield, science, technology, and

math. this provides a variety of programs that exists across the government. the budget proposes to consolidate those so we can maximize the use of every one of those dollars. in addition to the bill, to build on the cost of the higher education. there is $60 million in the world fund to spur cutting-edge innovations aimed at driving the cost of college down. also to reward colleges who are riving the costs down. again, we an to drive education fund to reducing college costs. i'm going to highlight a couple things with respect to energy. the budget continues the president's all of the above energy strategy that we've talk

you've heard us -- you've heard us talk about. the trust to support research in transportation technologies and a race to the top style investment on $200 million to cut energy rates and build efficiency and modernize the grid. let me stop there because we want to have time for questions. >> thank you. what we'll do is i'll call on folks who have questions for a gene.jeff, cecilia, and i'll start with jim. >> thank you. i don't know who best answers the question but i have two questions one on the corporate

tax reform plan and the other on the change of c.p.i. in your corporate tax portion of the budget, you have a number of tax increases, including the elimination of oil and gas subsidies and so forth. does all of that additional revenue get used exclusively for lower corporate tax rates? you've in the past talked about a lower corporate tax rate of 20% and not 25% tax rate for mastering companies. wonder why that was not included. >> there's nothing new in our tax proposal. what the president and our posture has been on corporate revenues is the following, we thinks there a significant number of unjustified tax expenditures and loopholes in

our current tax code. we think some of them do have negative impacts in terms of . ifting to tax havens and we have -- the president has put forward detailed proposals. the president believes those proposals could be used to lower r deficit or to help support more economically justifiable tax incentives. however, what he has said for the last couple of years, if there was a concertive effort, which requires the business community working together, bipartisan congressional action, have historic comprehensive tax reform. that would lower rates, have a ing um tax on foreign earn

that would discourage a race to the bottom. if we were able to do that he would accept a revenue neutral tax reform proposal. so again, if that's not going to happen and we're going stay with the status quo, the president believes these measures should be eliminated. if we're in a status quo world, then they should contribute to the deficit. again, if there's a once in a generation moment to have comprehensive corporate tax reform that eliminates -- duces loopholes, unnecessary incentives, tax haven behavior and lowers rate to make our tax code more competitive to help more jobs on our shores he's willing to do that in a revenue

neutral way. that is our position for the last couple of years and this is still our position now. >> again, this comes under the nothing is new. the $40 billion of annual extenders that has to have gotten rid of or paid for through revenue neutral tax reform. >> the goal is still 28% for a corporate tax rate? >> that had s what we put forward. what is important to the president that it meets these principles. if somebody has something that is not going to hurt the deficit -- meet hisng to be goals, we're always open to other ideas. but we think 28%, 25% for manufacturing is a strong aspiration but if others have ideas how you could go further in a way that is projobs and

does not hurt the deficit, of course, we're always willing to listen to other ideas. >> on change c.p.i. on the switch in the budget you say it will impact nonmeans programs. in addition to social security can you give us an example or a list of what some of those programs would be? how would you specifically protect the vulnerable populations in those programs? >> the means tested programs but c.p.i.tch over to change the entitlement program is a program that would have a -- >> veterans programs as well? >> the means tested veterans program is excluded. >> so pell grants -- >> that would be an example where the chain c.p.i. would not

apply. >> would it apply to the adjusted minimum wage because you raise it to $9 but the president in the state of the unit would be adjusted onward ing to inflation. would it use the formula? >> we're hoping to have a strong bipartisan process to pass that. i think at this point we'll probably wait to have those discussions. the important thing for the president is to pass the minimum wage. he believes that nobody who works full time should raise their children in poverty. people have different formulas for that. hat we want to see is that iscussion get engaged. >> mark?

>> bob -- > i said mark. >> go ahead with mark from reuters. >> you said the total of revenue to increase for deficit reduction is $580 billion. how much total revenue increase for other programs that you're proposing, such as the early childhood program and so on? how much from the 28% cap and the buffet rule and so on that you applied to investments? budget jeff said the offers -- keeps on the table the last offer to the speaker a compromised offer, which had $580 billion of revenue from

high-income individuals. we then put additional measures in our plan that could be -- that the boehner offer was not conditioned on but we thought would represent the balanced economic strategy that we've discussed. most of the times -- almost all of the times we have additional revenues beyond that are to pay for other tax relief. for example, we have a reserve -- one thing in our plan that is mentioned we talk about extending the additional five years the obama increases in the earned income tax credit, the child tax credit and the college tax relief. in doing that, we believe that should be part of the base line. so if people in negotiation accepted that was part of the base line that would not have to be paid for. but if somebody said they took a

different view we put in $150 billion in a reserve that could help pay for them. that is revenue to be fiscally conservative and to say we believe in extending those important tax incentives. if people believe they should be paid for as opposed to being part of the base line, they are in our base line, i believe in the mcginnis group and others keep in the base line. those are in the reserve if needed. other revenues are for other tax cuts that we have going forward. explicit ace where we raise for investment is what cecilia talked about that is the tobacco tax. we believe that additional revenue is justified for the positive that it serves in terms of early childhood and the

deterrent effect it has on smoking. >> if i could just have a follow-up. speaker boehner has criticized the administration for holding that hostage to raising revenues. if going to a chain c.p.i. a good way to rationalize entitlement program ebbs and it will raise revenues why not handle that separately? >> he's willing to do it as part of the comprehensive $1.8 trillion deal that puts us on a sustainable path, gets us out of this pattern of manufactured crisis after manufactured crisis. this is part of a comprehensive package and it has these protections to protect the most vulnerable and older recipients

of social security. several of t add, us have been part of the bipartisan budget agreement, when you are having those kinds agreement it takes give and take on both sides. you make a compromise and they say we'll just take that. that can't work -- it couldn't work the other way. if they said as part of your agreement we're willing to support your infrastructure plan but only if you did all the entitlement savings, we couldn't say thank you, we'll just take that. that is put on the table as part of a compromise. cember 3, speaker boehner, eric cantor, wrote the president a letter saying they were willing to do $800 billion in

revenues if it followed the offer that the compromise thatters skin bowles put out to erskine bowles put out to the committee. senator mcconnell says if you have a deal with revenues, this was as recent as january 6 on "meet the press" one of the things they felt was needed for c.p.i. venues was the so when they've gone to us and said this is one of the things you need to do for us to be willing to do a comprehensive package, obviously, it doesn't feel right. or it is not in the spirit of the bipartisan compromise to say if the president is willing to put that on the table, something

that is not ideal for him for a compromise, therefore, you can menu --hat is anal cart an ale carte menu. we made it very clear that the last offer from speaker boehner -- i'm sorry, the last offer from speaker boehner is not conditioned on investments that we think are best in our budget. the offer that is there from speaker boehner, you can't decide the only concessions that the president has made and not include the concessions from the republican side that can pass both houses. >> if i'm reading this right, ou proposed $71 billion over

$10 billion to restore it to the 2009 per parameters. i thought you signed a deal on different level on that. are you proposing to get rid of the deal in the tax deal? >> in 2018. the estate tax reverts to the 2009 as of 2018. >> under current legislation it already does that? >> no. >> so you're proposing to do that? >> yes, we are proposing to do that. >> why so soon after the president signed the bill would you propose to change it? estates, id very few think there are three out of

1,000. there is still a $3.5 million individual exemption, $7 million per couple. it takes the rate to 45% from 40%. we believe that in these fiscal times it is responsible policy in 2018 for the state tax to return to the 2009. >> is that the biggest -- aside from tobacco and the deficit reduction tax proposals that you have, is that the biggest new revenue provision that you have even among those used to offset other tax cuts for middle-class? >> i believe so. i'll check for you to make sure. >> two questions. is that a price tag for the whole program? what is the criteria for

communities to take part? >> it was the numbers that i gave, $35 million, which is the department of justice and 400 at hud. aside from that, other agencies are going to align programs but there is not necessarily new funds. then there is a tax credit proposal. agencies are working on the criteria but the goal is if you are the leader of such a community, a county, city, a neighborhood it should feel like one doorway in to partnership with the federal government. it will resources and technical assistance. we will build on a program that we have called strong cities, strong communities, we have staff and we're supporting local leadership and identifying clear goals and clear metrics and

breaking down the barriers within the government make sure we're the best possible partner. >> on the security trust, is that in addition to the increase in the vehicle research budget that you're talking about? >> yes, that's my understanding. >> yes, that is separate $2 billion. >> hello. i want to get into the weeds a little bit about the kindergarten -- full day kindergarten and the opportunities in that issue. talk to me about how many teachers you're excepting to add to this program -- expecting to this prads. how much is the cost? also, what -- i'm trying to marry the issue that this administration is trying to cut

smoke and f people then add to the revenue. what kind of >> we have done detailed calculations. when you reason to to a certain amount, we know that it has the on young people. they are sensitive. we have made it so that young people would choose not to smoke as a result of this tobacco tax. we know a little bit about how impact smoking. that figures into our calculations about the revenue that it would raise. that is essentially the price tag for the early childhood proposal. with respect to your question about the numbers of teachers, this is a federal state partnership.

is aame way that the k-12 federal-state partnership. providing some directions so we can ensure that providing quality programs is sort of a framework for the states, but they would have some flexibility on how to get there. or is a significant state part as well as a federal part, it is hard to estimate the number of teachers who would be talking about. among the federal standards we would seek to make part of this framework is to make sure that teachers are paid on the same scale as teachers in the k-12 system. >> [inaudible] >> i don't. each day would make their own determination on how best to achieve the goals of program. make theirte would

own determination on how best to achieve the goals of the program. .> i want to follow-up on that you might have a lower revenue stream tenures out than you do now. needsd imagine the pre-k will be consistent and predictable over many cycles. could this become a mandate that runs out of funds for the future might have to adjust the tax to keep pace with the need? into thee built that population. we cannot predict the future. it is limited. we know that there have been increases in cigarette taxes reduce the and we know something about how they work and impact smoking i will kind of revenue we can expect. we build that into the copulation. we believe that we covered the 10 year cost the way we designed it. when they do this, when they

do the score, they project what the impact is on behavior and i it into thest score. it is built into the score, their predictions of how it would affect. >> montgomery. thank you. maybe i'm just getting old, but i'm trying to eager out the reduction numbers this year. it wouldcalculations, 1.4ce your projection trillion which is less than 1.8 trillion. i'm a little bit confused about the difference. there also seems to be a difference between the $5.3 trillion deficit you are racking up over the decade and an

increase in the debt, which is much larger. could you explain? ,> well, on the first question in the current law, the sequester, which is 100% across- the-board, indiscriminate cuts. we are replacing the quaestor, which is -- we are replacing the sequester, which is a balanced deficit reduction. have across-the-board spending cuts that are hurting the economy. they were never intended to be policy. we want to replace it with balanced deficit reduction. the other thing going on is that we are clear about our willingness to do the 1.8 jillion dollar deficit rillionon --

dollar deficit reduction. that chart that i showed that is deficit and how we are driving it down year over year below 2% declining debt is on a path. it can be confusing because we have the $1.8 trillion offer to replace the sequester, which was never intended to be policy, with balanced deficit reduction. we have the investment modules. the president is willing to do the compromise with speaker boehner. >> [inaudible] the $2.5 trillion we have achieved today. >> [inaudible] >> it just made up of

healthcare, discretionary, revenue,datory, interest saving. you can walk through that. we can work with you off-line to do that. [indiscernible] >> that is accumulating on the current debt that we have. we always look at the interest of that is the chelating. -- accumulating. real-time to do without seeing the numbers.

we focus on where we are driving debt deficit. that is the metric that everyone uses. it is on a declining path. >> the other reason i think it is important to look at that is, you are right. we are still in a world where people are often using different baselines, etc. all of that comes out when we look at the bottom line. when you look at the bottom line, whether you have $50 billion decrease in something that was supposed to be in the baseline or whether the detective as a revenue or spending, all of those things that you and i and about 18 of the people in world cared deeply about, all of them don't matter when it comes to what the ultimate impact is. that is, are you as a country seeing your debt declining as a percentage of your income or increasing?

is the bottome line on what matters. >> jessica. >> to questions. on how you want that like on or want to work -- on how you 401k to work. what happens in that? protectyou supposed to the older social security recipients? >> there is an adjustment for older security beneficiaries. it kicks in at age -76. this is consistent with the bulls simpson's recommended -- son recommended.

it goes from 76 to 85 in the adjustment. ira's rationale for giving tax incentives for retirement is .o overcome myopia make sure that people invest more and do not understand for their future. that is good for them. havesure the rest of us more government spending that is needed. there is not a lot of justification for why you would be giving those tax incentives for someone who is able to account for over $3 million in the ira for most people are

just putting in a few thousand a year. an budget says once you have amount suspicion to finance $200,000 a year, anything above that should not get a deferral of taxes. get referentialgo treatment. -- when youetty think of things we ought to do when asking for tough choices, this should be in the heavily no-brainer category that anything above $3 million does .ot require cash deferral >> one more. have beenublicans complaining about using savings

in the budget, but you're using for spending on jobs and infrastructure programs. what is the rationale for using war savings to pay for new never paid fore them in the first place? ofthis is directly a result the presidents policy and and the war in iraq and afghanistan. .t is cbo in the baseline this is consistent with cbo. importantly, it closes the door for additional discretionary spending. jobre using it to offset investments and the $4.3 trillion we have talked about several times, none of the savings are part of that deficit reduction. >> right, but the republicans

is your total reduction closer to $100 billion in your budget. >> i would to walk through their math. i can tell you we are driven by policy. it is consistent with cbo. it closes the back door on discretionary spending. an amount to offset investment in infrastructure and jobs. we are not counting any of the savings in the $4.3 trillion, which is the result -- it is not in there. , aas jeff said in the offer compromised offer, however you take accounting in that,

it does not affect the bottom line. on the $4.3fect trillion. it has no effect on the 1.8 chilean dollars. for the record, -- $1.8 trillion. for the record, the amount is meant to offset the rebuilding and modernizing infrastructure and jobs is perhaps 24th of the amount of the savings. gene said,at what jean said there are lots of different ways to look at the numbers. >> i think people care about the school discipline -- fiscal discipline and should lock this in and not allow it for a question for people to go to.

it is an important fiscal policy. there is no reason it should not be credited as such. >> people who care about fiscal discipline should know that the republicans who make those assertions are the ones who claim that their budget and get the 5.7 trillion dollar tax cut for that well off, but they will not tell you how. >> thanks, jay. you said it is based on a forecast from november. can you explain why this is so late? why did it aches along to come out? so long toid it take come out? >> the prime budget season is

november and december. given what was going on with the fiscal with negotiations, we had to put much of it on hold to understand what would happen with the fiscal cliff negotiations. there was a deal struck to extend the middle-class tax cuts and increased taxes for families making over a certain amount. there were changes in discretionary caps. those had major impacts on the budget process. we ramped it back up. we had complexity around the sequester. the sequester pickton on -- kicked in unfortunately on march 1. it was made worse. the budget was delayed.

go ahead, donna. >> one quick follow-up. on the tobacco tax, doesn't it disproportionately affect the poor who smokes more? what about critics who say this isn't a frenchman of the american -- this is an infringement on the american people who do not want to pay my taxes, whether it is a great or something else question mar? >> people who don't smoke will not pay this tax. it will also help folks who are trying to quit smoking. will have greater support and be able to stop smoking if that is what they choose to do. >> the gentleman from mainstream radio. t readio.tree

>> thank you. apologies, but when i was handed a mighc -- >> go ahead. whenat about this argument you cut social security and now 50% of social security recipients get -- means testing will be difficult. you when he cut medicare, if you means test, you're pulling away the broad support for medicare and social security and endangering the rogue rams. -- programs. that is why they were designed that way in the first place. >> every single thing that this president does that affects medicare is designed to protect it and it's benefit structure.

its universality for all seniors. the measures in our plan -- medicare was opposed to be insolvent in 2016. measures in then ach listed 22024. these measures would push it another for years out. aca listed itn the 2024. these measures would push it another four years out. how young and healthy you are versus older and having health issues. this president is dedicated. we do have a challenge. it is not the only challenge, but the costs of medicare -- healthcare gross and medicare cost has come down, the baby-

boom generation, they are great challenges. the president is trying to do sensible work forms that protect that court or the pit structure. in terms of the means testing, the only thing that is in this threeal was one of the things that some of the republican leadership has called for has some means testing on medicare. what the president has done is theosed that in partb b, premium that is paid by those who are well off in their senior gher. would be hi right now the average medicare recipient only bears a to five percent of the costs, part b.

of the costs, part b. higher than pay 25%. what this proposal does is it and that if you are above are an older couple and has or above,$170,,,000 you'll pay a higher percentage of the costs. in all cases, you still have a benefit of being in medicare. , youu are making $500,000 will pay that large fraction of what the costs of the program is so that the rest of the public is not subsidized. in all cases, an older american, anyone is still better off being

part of the medicare part b program. so there is nothing we have done that tears the program apart. quite the opposite. what the president has fought against is things like premium support. there has been a lot of talk talk that he was willing to .ccept the condition of cpi the president has not accepted their condition of raising the medicare retirement age to 67. that is something he is both privately and publicly rejected. ,n terms of social security nothing in the proposal we have with the adjustments we have would increase the elderly poverty rate. the president is trying to do that the cpivings has impact on social security,

they close about 15% of the solvency gap. for older social security recipients. remember this president has fought hard to protect medicaid. we have minimal medicaid savings in this budget. medicaid is where older americans get their long-term health. he has made that a very tough fight. when you look at what this president has done over arall, t is a defense of what he considers some of the crown jewels of our government and retire with dignity. everything he does is designed are as sure that thery strong for future generations as it was for previous generations. >> [inaudible] >> what's that?

>> [inaudible] 35. think it goes to is that what you're talking about? it goes up a little higher as you go up the bracket. the highest being over 420,000 per couple. a higheraying for percentage of your medicare part b. everyone still has an incentive to be part of the medicare program. >> [inaudible] >> let me check. i want to make sure that we have the exact details. i will check on that. >> thank you. i want to note if i could to end on gene's answer is that when the president demands from

that weans to include raise the retirement age for medicare and social security, he rejected that the cassette felt it was not -- you reject did raising the age as he fell it was not good policy. thank you. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> acting white house budget on ther jeffrey zients 2014 budget request. white will hear about the house 2014 budget request from the pentagon. defense secretary chuck hagel and joint chief of staff general martin dempsey take questions from reporters about the pentagon's budget. this briefing is ready minutes.

-- 30 minutes. >> good afternoon. >> i'm announcing the fiscal year 2014 budget request for the department of defense. this is a base budget of $526.6 billion. this budget continues to balance the compelling needs of supporting troops at war in afghanistan, implementing the president's defense strategic guidance and sustaining the quality of the all-volunteer force all while ensuring the use of every taxpayer dollar and addresses imbalances within the department of defense budget. as i discussed in my speech last week at the national defense university, the cost of acquisitions and personnel come pension must be addressed to put the dugget on a sustainable path -- department on a sustainable path particularly giving the pressures on our top-

line budget. this takes important steps in each of these areas. first, the budget continues to maximize our use of resources. it proposes a set of initiatives that saves an additional $34 billion over the next five years by changing the way we do business and reducing support costs. this savings is on top of the approximately $211 billion in ongoing overhead reductions and business efficiencies identified in the last two budget requests, which are still being implemented. the new initiatives being proposed are a restructuring of the work force to meet key needs with fewer personnel and overall military treatment facilities and efforts to control health care costs by taking advantage of health care costs. these efforts are having some success. with projected health care spending in this budget

declining by some 4% compared to our budget two years ago. with this budget, the department's requesting to consolidate infrastructure with the authorization of a base realignment and disclosure, brac in 2015. brac is a tool that allows communities a role in reuse decisions by them for their property. and it provides redevelopment assistance. this process is an imperfect purpose and there are upfront costs for brac. it adds $2.4 billion over the next five years to pay for the costs. there are significant cavings as we have seen. this budget continues the department's efforts to better align acquisition programs with the president's strategic guidance and eliminate those programs that are performing

poorly. the department has canceled or curtailed more than 30 major acquisition programs, rebalancing our portfolio towards better security challenges and making new investments in cyber and advanced intelligence, surveilance. in this budget, the department has continued to shift priorities within modernization portfolios. shifting to achieve an $8.2 billion in savings from weapons programs and restructuring over the next five years. one example by revising the strategy for the army's combat vehicle program, the department will save over $2 billion in development costs. this budget increases d.o.d.'s investments in its cyber work force. continues to implement our rebalance to asian makes new investments in the flexible platforms needed for the future.

another area of significant spending growth has been pay and been for our military personnel. the current fiscal environment demands that we look at these costs. roughlyly one-third of the fiscal year 2014 budget request. in this budget, the department is submitting a new package of military compensation proposals including a modest slowing of the growth of military pay by implementing a 1% pay raise for service members in 2014. the department is seeking additional changes to the tricare program in the f.y. 2014 budget to bring the beneficiaries cost share closer to the levels envisioned when the program was first implemented. these changes which have the strong support of the joint chiefs of staff save about $1.4 billion in f.y.

2014 and total of $12.8 billion over the next five years. 'm committed as well as all the leadership at the pentagon to working in partnership with congress and all stakeholders to implement needed reforms because current fiscal realities demand we make tough decisions that have been did he ferd in the past. the longer we put this off, the harder it's going to be particularly the uncertainty that exists about future levels of defense spending. let me now address that uncertainty. as we all know, the department is in the process of implementing steep budget cuts for the current fiscal year as a result of sequester. reductions of up to $41 billion that will lead to the suspension of important activities curtailed training and could result in furloughs of civilian personnel. if these cuts persists.

the defense budget would be by $500 billion over the next ecade. he president's budget question offers a comprehensive deficit reduction plan for congress to eliminate sequestration. that plan averts what would be another significant reduction in the defense budget, some $52 brillion in 2014 alone and $500 billion over a decade. it calls for $150 billion in defense savings over 10 years, unlike sequester, these cuts are back loaded occurring in the years beyond f.y. 2018. while no agency welcomes further budget cuts, the president's deficit reduction proposal requested in this budget gives the department time and that's important, time, to achieve these longer-term savings without harm to modernization and readiness.

the budget cat norse that will provide the most immediate savings but also encompass most of our military capabilities. we need to plan wisely for a long term future of budget constraints with thorough, clear-headed analysis that was anchored in the president's trategic guidance. i directed the review. the review will examine the choices, posture and investments and identify the opportunities to more efficiently and effectively structure the ept department and develop options to deal with budgetary circumstances and that review is under way. the purpose of the review is to ensure that the department is prepared to defend the nation in america's strategic interests. no matter the outcome of this budget debate. going forward, every decision must be wabde against our

national interests and must be worthy of the service, sacrifice and loyalty of our men and women. these decisions must be made in the partnership of congress and i look forward to having this important discussion about our priorities and in the days and weeks ahead. i'll turn to general dempsey, chairman of the joint chiefs and we'll ask our comptroller and general ramsey from the joint chiefs to respond to specific questions. we'll take a questions before we ask them. thank you. >> we built this budget to prepare the joint force for an uncertain future and aims to restore the versatility of a more affordable military for a more sustainable defense trategy. the f.y. 2014 defense budget doesn't reflect the full udget.

it imposes more time. nevertheless, uncertainty persists about what the top line will be for this and any future budget, nor does it include to restore funds for any lost readiness. we don't know the full cost of recovery from the revenue of shortfalls. of as expected, we curtailed or canceled training for many units, specifically those not preparing to deploy and it's more expensive to get ready than it is to stay ready. recovery costs will compete with costs to build the future joint force. so what does this budget do? it invests in our priorities and keeps the force in balance. it supports our forward-deployed operations. it upholds funding for emerging capabilities such as cyber and

funds those conventional and nuclear capabilities that have proven essential to our defense and lowers manpower costs and reduces excess infrastructure and makes health care more sustainable. it protects investment in what i have described as our real did he sees i have advantage and that is our people. it treats being the best trained and best equipped military as we now nongorble imperative. i returned from germany and afghanistan and i had the honor recognizing one of our most humble of the nation's servants and 10 of our nation's sons and daughters. i spoke with senior leaders and our troops in the field. budget uncertainty weighs on their minds. for those on the front lines, they trust that we'll get them what they need and we will. they are less confident that when they return home to a force

that trains hard and stays ready and want to make sure they are part of that training hard and staying ready. we have the opportunity and an obligation with this and any future budget to restore their confidence. the force is looking for us to lead and we can't do it alone. as i have said before, we need a predictable funding stream and full flexibility top keep the force imbalance. this is the message i will take o congress tomorrow. >> part of the backdrop to the budget challenges as outlined is a real world crisis that is developing on the korean peninsula. what would be the consequences if a ballistic launch is expected. are they going to war. how close does the u.s. think

that north korea is to being able to reach japan? >> well, i'll begin and ask general dempsey to finish your line of questions. first, this country, the united states of america, our allies, the united nations has been very lear that north korea has been with its rhetoric, with actions -- have been skating very close to a dangerous line. their actions and their words ave not helped diffuse a combustible situation and it is certainly the intent and hope of all of our allies and certainly this country that that rhetoric be ratcheted down, those actions

be neutralized and that's in the interest of all countries. now in the event that that does not occur, as we have said many times, our country is fully prepared to deal with any contingency, any action that north korea may take and any provocation that they may instigate. and we have contingencies prepared to do that. with that said, let me ask general dempsey for his remarks and that will get us into your second question. >> proximity of the north koreans to achieving a nuclear device on a ballistic missile is a classified matter. but they have conducted two nuclear tests. they have conducted several

successful ballistic missile launches and in the absence of evidence to the contrary, we have to assume the worst case and that's why we are postured he way we are today. >> mr. secretary, moving on past this budget, last week in your speech, you made specific reference to gold waternick ols and that when it was done where there wasn't cost. in time, will this budget re-examine the gold war-nichols. >> which as you know is familiar what it produced, allow the hairman of the joint chiefs to

espond to this more fully, but i think what came out of gold what ther-nihols as reality of a force structure that was needed t the time and i think brought capability to our armed forces to deal with the realities of what was coming at the back end of the 20th century and how we integrated our forces and our commands. what i was referring to was, as you have noted, i think that environment at that time were budget issues and were not a rimary factor? much of that debate. i wasn't in the congress at the time. i was an interested sen --

citizen and i read and what was going on. after 12 years in the senate, i'm far more familiar than i was as a citizen in 1986. the context of when and what they did at that time is different in one sense on budget -- on the budget environment, but it's not different, as i tried to note in the speech in that these are defining times. we are living at a defining time in the world order, world events. in the 1980's, it was a defining time for a different reason, but it was an important time and the leadership of our country at that time and interestingly enough through bipartisan leadership came together to make that happen. so i don't know if i have confused you further or clarified anything, but that was my intent, not to challenge the

fundamental context and oundation of goldwater-nichols but what the environment was at the time. the budget is a big environment this time much more so than last ime. >> goldwater-nichols was a joint team. the last 10 years of war made it crystal clear. there is no necessity of driving us together, the services understand that their future is in the joint community. >> this budget is predicated on the hope that is balanced deficit reduction plan will be passed by congress and will be reduced by $150 billion. realistically, you know the landscape, this has not worked out.

what are the chances of this package passing? and if it doesn't, when do you execute plan b and come up with a sequestration budget earlier than next january and scare the hell of the industrial base? >> i will give you an answer and general dempsey may want to respond. a couple of observations to your uestion. >> that's why i directed the deputy secretary of defense, carter, working with the chairman of the joint chiefs to undertake a strategic choice in management review to address the reality of what we are living with now and that is the reality that you noted, sequestration is law. but interestingly enough, both the house and senate budget resolutions as well as the

president's budget are about the same as it relates to the amount of money for the defense epartment. now i don't think anybody is minimizing the reality of sequestration as law and i noted and as marty has, we are all preparing for that reality. we are taking cuts this fiscal ear. but at the same time, wife as a representative government an opportunity tore get beyond that and hopefully find a budget resolution both in the congress and the president that will allow us not only some new flexibilities, but new numbers. and when you look at -- this is a $600 billion enterprise, the department of defense. you can't shift budget dynamics

and planning in a month or two. these are long-term dynamics. so we have to plan for budgets. it's why any entity has a budget, not unmindful of sequestration and what's coming down the road if nothing is done, if a compromise can't be ade on a new budget act. we are planning for everything. again, that's why i directed that strategic review, because it may not happen. but this is uncertain. i think -- i'll end my comments and go with marty. we are living in a world of complete uncertainty. also the flexibility that we need to manage -- any institution needs to manage is not there in the same way that we need it to be there and hopefully will be there. and the other part of that is

ime. this is why the president's budget' number are particularly important because of the $150 billion in his budget over the next 10 years, most of that is at the back end and gives this institution the time to manage and respond in a just tore -- adjust and fulfilling this strategic guidance in the budget, not on what the president has given this institution a of years ago but our readiness of interest to protect the security of this nation and that's what we have o look at. >> is it a budget gimmick. $150 billion, most of the people in this room is gone. not covering defense. >> i'm not going to get into -- i'm not going to get into debating it should come at the

front end or back end. it is what it is and we have to manage and plan for and to your bigger point, prepare for whatever eventuality that is coming. >> i don't think it's a gimmick, tony. you have heard me say for some time that we need certainty, time and flexibility. time. to your point, using the president's defense strategy from a year ago as the foundation, we are running several excursions, one of which is full sequestration because i want to be able to tell the secretary, this is what this force looks like and what it can and can't do. i think we are doing due diligence here. >> mr. spec, -- mr. secretary, you have been in congress when this pentagon has tried to change or slow down the costs of health care. what's difference this time that perhaps you are more optimistic that congress will make the kind

of changes that you worry about the budget eating the entagon? >> my voting record i don't know is in your pocket, but there is a big difference. when i was in congress, i left congress in january of 2009. that was, as you know right at the -- at the front end of the global financial crisis. and all this was coming. so the last four years that i have been out of congress, i haven't had to deal with that as a member of the united states senate. but it goes back to your question. when i was in the senate for those 12 years, we didn't have the kind of pressures at all. they weren't even close. what we're dealing with now. that's the big difference. the fiscal realities that are forcing down now some tough choices and some big decisions are going to have to be made. we don't have any choice here,

because if we don't start getting a hold of this and moving this back towards some high making tough choices, the congress is going to have to be partner here. we can help manage it and propose and be part of this. but the congress is a hugely critical component of all that -- all that we need to do. but that's a big difference. marty. >> i completely agree, mr. secretary. we have to absorb cuts of this magnitude. we have to take them across the entire enterprise. >> that's what i instructed in y direction on the strategic choices and management review is to look at everything. everything's on the table. has to be on the table. >> when do you expect the results of that review? >> the review is ongoing and i

have been getting reports, progress reports along the way. we're looking at trying to have this completed by the end of ext month. >> can we back to north korea for a moment. what is your thought -- your bottom-line view what kim xiong un is up to right now? and so you said he is walking close to a line. should the american people be worried that we are headed towards war with north korea? >> he doesn't check with me on his decisions or how he's feeling each day. i don't know if he does with the chairman, but -- the reality is that he is unpredictable. that country is unpredictable.

if that is the reality we are dealing with and it is, you prepare for every contingency and we are, which i think has been made very clear. dmiral lockleer was on capitol hill yesterday and went into that and a as should the american people be concerned about their safety and security. we have every capacity to deal with any action that north korea would take to protect this country and the interest of this country and our allies. >> you keep saying we have the capacity to take action if they do something. this suggests that the u.s. military strategy is to respond to respond if north korea does take a first step. what if you see something, do you respond before they take the irst step? >> i'm going to hand this off to general dempsey, but i don't discuss -- i don't think general

dempsey discusses operations and specifics of what our contingency plans are. general. >> look, the military's job is to do three things equally well, deter enemy actions, assure our allies and prevent and we have options in every one of those bins to offer to our senior leaders and this is no exception. as far as knowing what kim jong-un is about. we are in a press conference that the precedent that the good of the american people so the united states of america can get back on a solid foundation and what is kim jong-un doing? he is starving his people. it is pretty hard for us to figure that out. >> thank you. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning nstitute].

>> acting white house budget director will be on capitol hill tomorrow taking questions from lawmakers on president obama's budget request for 2014. watch the budget committee headed by paul ryan on c-span 3. the economy and federal deficit from rachel bartish. it is a third prize winning video in this year's student cam competition. >> dear, mr. president, i understand you're busy as there are many other issues you are to deal with but i think the most

important issue is the economy and the national debt. the people that i interviewed had the same thoughts when i asked them about the economy. >> it is rough. it is hard right now. >> i think it stinks. >> well, it could be better. >> there's no secret that the economy is struggling in america. businesses are moving overseas, american jobs are being lost and the national debt is increasing. i believe that helping our small businesses across america can be important for reviving the economy. many of your stores in our town in southern indiana were for sale, rent, or empty in the last few years. these buildings look run down and visitors refer to us as a ghost town. so many housing and job opportunities would be able in small town business fixing these run down buildings.

jobs become available and the economy can continue to pickup by reviving these small towns. we started the project to rebuild this town when we moved here from ohio in 2006. the house sat empty for four years but now thanks to my grander it is open six days a week and it is not just a business for a home who the couple who owns the building. i talked to steve and he explains the building is more than a place for business. >> for us, it is a lifestyle. the people that come through here are customers and the other .eople live around here >> also, we as a community have put forth the effort together to help bring back our small town and successfully open an art shop, a clinic, two retail stores, a comic book shop, a bed

and breakfast, a coffee shop, a log cabin museum and a 30-acre campgrounds. so what can be done to help the my? the people i talked to had different thoughts on what we can do to help america. >>ic there's a lot of people expect an awful lot out of government more than me. i don't think the government is responsible for fixing everything. i don't think it is right to pay for our taxes, to pa pay for the -- rnment to be involved in i'll do for myself. i work my butt off and we'll make it or not based on my own effort, my own work. >> more tax breaks for people, more government grants, more ways to help people start their business. because we started from scratch,

we had nothing when we started. >> does this sound familiar? > everyone who -- one that has been unemployed for 26 weeks and has run out of state benefits can get an additional 14 weeks of benefits. >> that's what we do in this country. that's the america dream. that's freedom and i will take it any day over the supervision of the central planners. >> the reason we're here tonight is because senators brown and sanders said why we talk about outsourcing of jobs let's do something about it. that's what we're trying to do tonight. we're trying to do something about it. >> you know, every country, every -- well, town goes through

cycles. things are easy then they are hard but i think, i mean, hard times are just that. they are hard time but they are not the end of the world. hard times force us to get creative, think outside the box and do things differently and this gross us as business people -- grows us as business people. it takes place under that pleasure. >> my grandmother came up with unone of these unique ideas. the 4th of july, our town held a fan fair, which is my grandmother's idea is a garage sale to help pay down the nation's debt. people sat out in 114-degree weather that was sent to help

pay down the debt. >> i would say it is not fixable in the next six months or a year. it took a wile to get here and it will take a while to get out of this. >> isn't it the same in washington? there are hundreds of different people with different ideas but when efrpbl talks at once it -- eryone talks at noise it becomes noise. none of that matters is nobody is putting forth the effort to change things. our government sounds like small towns across america, including mine. >> i've been here a lot of years, a lot of business people have been here for 30 years. over 30 years, you know, you got to get over problems that has happened in the past. that is tough for some people. >> you voted for action, not politics and confusion.

you elected us to focus on your jobs not ours. in the coming weeks and months, i'm looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together. >> mr. president, you have a powerful voice. the people of america want to help america. sacrifices need to be make because you can't satisfy everyone's wants. small towns may not be important to every -- everyone in this nation but it matters to me and the people who run these small businesses and who are employed by the small businesss. small towns should matter to the economy because the unique atmosphere these small businesses offer. not to mention the job opportunities that could be available to anyone. it is my hope, that you as the

president, continue to set a positive example. we, as americans work together despite the different political view because after all we're all americans and we want the best for america. >> congratulations to all the winners in the student cam competition. if to see more videos go to student cam.org. >> coming up on c-span senator rand paul talks to students in howard university in washington, d.c. president obama unveiled his budget request for 2013 today. we'll hear from the president later and get reaction from capitol hill. the senate has been discussing gun legislation. there's going to be a vote tomorrow morning at 11:00 a.m. eastern. we spoke to a reporter earlier about the measure. >> the correspondent with the "national journal" it was

announced the expanded background check proposal. what should we know about it? >> it creates a lot of buzz in the senate, which is interesting to watch. it is different from the porme that was introduced by the senator of new york because it is not an universal background check. it mandates background checks for gun purchases at gun shows and over the internet. it is not mandating a background check if i'm going sell you a gun. >> what motivated the senators, a democrat and a republican to work together on this compromise? >> it could be any number of reasons. 91% of the public, i think is the latest number that supports checks.l background it's been the top part of the

gun control movement agenda for years now. it is also considered the one thing that could actually pass the senate. i don't know if the compromise that will pass but it goes a long way for answering our fears that some republicans have put forth about those kinds of neighbor-to-neighbor family sales that they don't think should be part of a big federal background check system. >> does that mean it will get colleaguest from the and specifically from whom? >> the only person who sounds positive enough is senator senator from maine. she said she is pleased from what she head but there is always that standard i have to review the language and i don't know. perhaps, it will get her support. there's a number of senators who are still on the fence if they will support the motion to proceed, which is happening tomorrow.

that doesn't necessarily mean it will fail, they are just waiting to see which way the political winds blow probably until the last minute. >> you mentioned the a-rating from the n.r.a. how did they respond to the proposal? >> i haven't seen anything from them on that. that might mean they are being under the radar about that. they put out some stuff about their own agenda on school safety last week. they have been quiet, at least to the press about that kind of stuff since then. the gun control act, that is supposed to be the brady campaign, the mayors against illegal guns has been out front and center. a lot of them have put out statements about it but quite frankly -- it is so much better than what they would have gotten in the past.

>> at a news conference a senator indicated their amendment would be considered first. what other amendments are likely to be considered in debate on the bill? >> we know there will be an amendment on banning assault weapons, we expect that to fail. another one on banning high-capacity magazines, the bullets that will spew out 30 or 40 rounds in a few seconds. that is probably not expected to pass but it might pick up a few republicans who would not vote for an all-out assault weapons ban. on the republican side, they are looking to put together their own alternative package. it would include a bill from the senator of south carolina to kind of update the mental health com bone innocent of the national data -- comp poe national debate.

the gun trafficking, the illegal sale of guns after they were purchased illegally. it will improve the laws on health care. there are some states that don't want to report mental health cases because they think it violates privacy concerns. so they are already thinking about this. there might be individual amendments on each of those as well. >> senator cruz and lee and paul were set to have a news conference twice today and they were canceled. can you tell us what is going on there? >> i checked in you are w our offices both times and they said they were having problems with scheduling conflicts but they plan to go forward with 11 or 12 senators in bureaucracying the bill. i don't know if -- blocking the

bill. i don't know if they can get the votes they need to do that but i don't know what happened with the press conferences. it seems they have are having trouble getting there. >> you wrote about the political dynamic is definitely evolving in describing the gun control debate. what does that mean as the bill comes to the floor? what would that look like? >> i think it is actually -- it is evolving so fast i can't keep up with it. the senators are really grappling with tough issues on gun control. i've never seen it before in the 5 years i've been covering congress. i think there was talk in 1994, but i have not seen the tough grappling, that if we need to check backgrounds how do we keep their privacy without having a huge list of gun purchasers in the federal landscape?

how do we stop gun trafficking? there's conversation going on outside of the senate about what do we do about our drug policy, which is fueling a lot of the crime? that's been going on as well. i feel like gun control advocates, the people who are limit any kind of gun purchases in the united states, there's a huge victory for them. this is the kind of thing they have wanted to talk about for years and members have not been willing to and all of a sudden they are perfectly happy to. it is awesome to watch. >> you can read her reporting at nationaljournal.com. thanks for joining us. >> pleasure. >> she never went too far within he boundaries of what a proper lady should be in the 19th century. everyone knew they shared an office in the private apartment.

she was active in discussions at the many state dinners they had. she was not a prude. she was very much a woman who knew what she wanted and set her rules out and everyone had to play according to those rules. she was respected for it. she was very, very popular. >> our conversation on sarah polk. is available on our website c-span.org/first lady. tune in monday for first ladies jane pierce and harriet lane. >> senator rand paul spoke to students at howard university. he talked about his party's history of opposing slavery. howard university is a historically black college founded after the civil war. senator paul also took questions

after this 50-minute event. [applause] >> thank you. thank you. would like to thank the president and the faculty and the students letting me come today. people ask me are you nervous about speaking at the university, some of the students may be democrats? my response is the trip will be a success if i can get the hilltop to have a headline that says a republican came to howard but he came in peace. my wife asked me last week, she said do you have doubts, do you have doubts about trying to advance a message for an entire country? the truth is sometimes. when i do have doubts i think of a line from t.s. elliott.

a line that says how should i presume to spit out the butt ends of my ways. when i think of how political enemies twist my ways i think of those words, when i'm pinned on presume? ow shall i guy who at howard, a once presumed to discuss the civil rights act. some people say i'm brave or crazy to be here today. i'm not one to watch the world go by. i wake up every day hoping to make a difference. i take to heart the words of tony moreyson, who wrote if there's a book that you want to read that has not been written yet, you must write it. i can recite lots of books or i

can plunge in the arena, maybe fall but at least i tried. what i'm about is a philosophy that leads you fill in the blank. i came here to not preach or prescribe spom formula l.a. for you but i want a government that leaves you alone. it encourages you to write the book that become yours future. you're more important than any political party, more important that any partisan pleadings. the most important thing you will do is yet to be seen. for me, i found my important thing to do when i learned to do surgery on the eye, when i learned to restore people's vision. you're still -- many of you have those things ahead of you. i'm an eye surge first and foremost, i find myself in a debate on how we heal the sick economy and how do we get people

back to work? i believe we have an economy that could create millions of jobs but we have to rethink our arguments and try to rise above partisan rhetoric. my hope is you will hear me out and see me who i am. if you hear me out, i believe you will discover that what motivates me is the defense of everyone's rights. strong importance of me is the defense of minority rights, not just racial but ideological and religious minorities. if the government does not protect their rights then majors could legislate our freedoms. the bill of rights protect us against the possibility of oppressive federal or state government. the fact that we are a constitutional republic means that certain rights are protected even from democratic

majorities. they can't vote to take away your rights. they are yours they are given to you by your creator. i've never waivered in my support for the civil rights or the civil rights act. the dispute, if there is one, has been about how much of the remedy should come under federal or state or private per view. what gets lost is the republican party has always been the party of civil rights and voting rights because the republican party believes that the federal government is limited. it's function is limited by the constitution, some have concluded that republicans are somehow inheritly insensitive to minorty rights. nothing is further from the truth. republicans believe many rights remain with the people and the states respectively. when they hear that they tune us out. for the states right to segregate and abuse.

that is not true. many republicans believe that decentralization of power is the best policy. the government is more efficient, more just, and more personal when it is small earn more local. the republicans also realize there are some occasions and have been occasions of injustices that they do require federal involvement. that is what the 14th amendment was about and the civil rights act was intended to do, protect citizens from state and local tyranny. the 14th amendment says no state shall -- it did change the constitution to give a role for the federal government in protecting citizenship and voting regardless of race. i did not live through segregation nor did i experience it firsthand. i grew up in the south. i went to schools with whites, blacks, latino, we all got

along. for some to say i can't understand. but i don't think you had to be there to be affected by the history of racial strife. the segregation and the jim crow in the south is compounded when you realize that segregation began in 1840's and 1850's. douglas is pulled from the car clutching his seat so tightly when he is thrown from the train, the seat are still in his hands. within a few years public transportation was integrated in the northeast. history thaton our t did not occur for 100 more years. but the story of emancipation, voting rights from frederick douglas to the modern era is the history of the republican party. how did the party elect the

first black u.s. senator, the party that elected the first 20 african american congressman, how did that is a party that loses 95% of the black vote. how did the republican party loss the trust and faith of an entire race? from the civil war to the civil rights movement for a century most black americans voted republican. how did we lose that vote? to understand how the republicans lost the african american vote, we must understand how we won the african american vote. in kentucky, the history of the back rights are inseparable from the republican party. democrats in louisville were led by the journal editor, henry waterson. they were opposed to blacks voting. the democrats were opposed to blacks voting.

waterson himself wrote to his opposition that blacks voting was founded on the con vision that their habits of life and general condition disqualified them from the exercise of sufficientage. this was the democrats. in george wrights "life behind the vail" he writes obama john paul her standing before tens of thousands of slaves when slavery still existed in kentucky and declaring my countmen you are free. while i command the military forces of the united states we'll defend your right to freedom. the crowd erupted in cheers. this is the history of republican party. while a legislature voted against the 13th, 14th, and the 15th amendments. william worely was a black republican. he was the founder of

louisville's naacp, he's a republican. most of the founders of the ncaap were republicans. worely bought a house in a white section in defiance of the segregation law. the case was finally decided by the supreme court in 1917 unanimously holding that the kentucky law could not forbid the sale of a house based on race. the republican party's history is rich in eman pation and black history. republican still pride the sense of justice that m.l.k. spoke of when he said an unjustice law is any law that a majority forces on a minority but does not make binding upon itself. [applause]

>> i wasn't sure if my speech would be entertaining but now you've had some entertaining. when m.l.k. talked about an unjustice law what intrigued me was m.l.k. talked about race but he talked about a justice law goes beyond race. he said an unjustice law, this is a good way to look at any law, an unjustice law is any law that a majority, any majority enforces on a minority but does not make it binding on themselves. ny law that is not universally applied. any law applied to just bankers would be unjustice. any law applied to one particular group, he referred to race but he said something about

unjusticeness that applies to all law. republicans never stopped believing that minorities whether it derives from the color of your skin or the shade of your ideology. few people remember the sit-in the public library in 1938. samuel tucker a lawyer, recruited five african american american go to the public library and sit and read until they are removed. in 1938, the sit-ins of the 1960's had a long history before. they brought down jim crow in many areas years before the civil acts right of 1964. i think in our retelling of the civil rights era we don't give enough credit it to the heroism of the disobedience that brought

down jim crowe. you might say that is all well and good but that was a long time ago. what have you done for me lately? republicans did champion citizenship but they became imimpatient. african americans were language anguished and they were below whites in every sense. it was especially harsh for those on the lowest rungs at the time. republicans offered something that seemed to be less tan gible the promise of equalizing opportunity through free markets. now republicans face a daunting task several generations of black voters have never voted republican and are not open to the option. democrats offer federal assistance and republican offer

free markets, lower taxes. we believe it will create millions of jobs for everyone. the democrat promise is tan gible and puts food on the table but does not lead to meaningful success. we believe that lower taxes, less regulation, balanced budgets, a solvent social security and a solvent medicare will stimulate growth. the republicans point to the reagan rare where the economy grew at 7%. if we did that again, we could create 11 million or 12 million jobs, we're creating almost no jobs at this point. after four years of the current policy one of six americans live in poverty. in fact, the poor have grown poorer in the last couple of

years.pings this is un-- using taxes to punish the rich punishes everyone because we're all interconnected. high taxes and massive debt are not working. this isn't just democrats, this is democrats and the republicans are piling on the debt but the debt is a burden for you. the economy has been growing at less than 1% and contracted in the last quarter of last year. i would argue that the objective evidence shows that big government is not a friend to african americans. big government relies on the federal reserve, our criminal bank, to print money out of thin air. that leads to higher prices. when the prices of gas rise to $4 a gallon that is a direct result of your government's debt. when food prices rise that is a direct result of $50,000 we

borrow every second. inflation hurts everyone, particularly the poor. if you're struggling to get ahead, if you have student loans or personal debt you should choose a political party that wants to create more money in the private sector. you will get a job when the time comes. some republicans, let's call them the moss covered variety mistake war for defense. they forget that reagan argued through peace through strength not war. the old guard argues for arming ghadafi and then the next year they want boots on the ground to defeat qaddafi. they have to be involved everywhere all the time. there are some republicans who don't clammer for war. many republicans believe in a strong national defense that preserves the peace. in louisville, in the predominantly african american part of the town 18 schools are failing.

the graduation rate from high school is 40%. the head of kentucky's education called it academic genocide. john hopkins researchers call these schools dropout factories. i defy anyone to watch "waiting for superman" and argue against school choice. it has been called the civil rights issue of our day. i think that is right. threw school choice a student was able to attend a school here in d.c. and he learned he has a gift for composing music. he wasn't reading before that. ronald went to go to barry university. there are countless examples of school choice. talk to the parents of these kids. look at the kids who were interviewed in the movie. ybe it is about time that we

rereassess the programs that are failing our children. every background deserves a class that will help students succeed. you will make it and do great things. in every neighborhood, there are kids who are not succeeding because they made mistakes or may messed up. they had kids before they were married or old enough to support them or they got hooked on drugs or they left school. republicans are miscast of uncarrying or condemning of kids who make bad choices. i for one plan to change that. i'm working with democratic senators to make sure the kids who have made bad decisions, possession oflent drugs is not put in prison. we should not take away anyone's future over one mistake. let me tell you the story of two young men. both of them made mistakes.

both of them were said to have used illegal drugs. one was white from a privileged background. he had important friends, an important father, and an important grandfather. the kind of family that universities name dorms after. this money had more money than you could count. this family could buy justice if he needed it. the other man was of mixed race and single parent household with little money. he did not have important friends or a wealthy father. you may think i'm going to tell you about racism where the white kid gets off and the black kid goes to jail. in this story, both were extraordinaryly lucky. both young men were not caught and they weren't imprisoned. instead they went on to become presidents of the united states. barack obama and george bush

were lucky. [laughter] the law could have put both of them away for their entire young adulthood, neither of one of them would be employable much less president. some argue that our drug laws are bias. but to be against them for that reason misses a larger point. they are unfair to everyone. white, black, brown, largely because of this idea that one size fits all. this idea that federal sentences should have no discretion. our federal mandatory sentences are heavy handed and arbitrary. they can affect anyone at any time. but they affect those without the means to fight them. we should stand and loudly proclaim enough is enough. we should not have laws that ruin the lives of young men and women who have committed no

violence. that's why i have throughed a bill to repeal mandatory sentences. [applause] we should not have we should not have court lost that disproportionately punishes the black community. from government sanctioned jim crow laws was a product of bigoted state and local governments. it has long been the enemy of freedom. something but americans know personalell onlinand on a level. we should enforce the rights of all americans, rich and poor, black or white. such freedom is essential in achieving any long-standing health and prosperity. as toni morrison said, write your own story. i hope that some of you will be

open to the republican message that favors choice in education and more compassion regarding non--violent crime, and degrading the opportunity of employment. when the time is right, i hope african-americans will look to the party of emancipation on civil liberty, and individual freedom. thank you. [applause] >> the senator has agreed to take some questions if you would like to come up to the microphone. i know we have some students who have to leave. let them speak plu.

yes, ma'am. tell me your name and where you're from. >> my name is joshua. thank you for coming out. during your speech, you mentioned that you have support for a government that leaves you alone. you have been one of the .iercest opponents how can you justify killing last year's autonomy bill and also interfering with the local legislation of our locally elected government? [applause] good question. ,hen partisans discuss an issue you only hear one side. i will tell you this, i did not kill any bill. i had no power to stop any legislation.

i'm in the minority. i put up amendments they did not want to vote on. they perceive that as killing a bill. but my intention was to get a vote on some amendments. the democrat majority could have voted mine down, but they did not choose to vote on them. right now we are on a gun debate. they say i'm preventing the debate from happening. i'm not preventing anything from happening. they have to agree to vote to move forward. they chose not to vote. idc autonomy, do i think d.c. could have more economy? maybe. but also know the constitution put d.c. under congress's purview and we give d.c. money from the rest of the country, from the tax receipts. i think that oversight of the money that we spend is incumbent. weis the responsibility that have oversight on the money we spend from the u.s. treasury in

d.c. walk.a tough road to i'm willing to look at it and see if we can come to a resolution. >> good afternoon, sir. >> good afternoon. >> and a senior lyrical science major. -- i am a senior political science major. here.you for coming out i'm a former intern for president obama. i'm also a national field onlyizer for one of the african-american super pacs in the country. that the republican party is a proponent of voting rights. i have been traveling along with men of my organization all over the country across dirty andes, -- 30 states

african-americans to vote because the republican party had been using the state legislature and the government to prevent african-americans from voting because they do not want to reelect president obama. how can we believe what you are saying with regards to voting rights when we feel based on our intellectual ability to gauge whether you can connect with us are not, how can you say that to us? [applause] me being here today and trying to open this dialog is showing that the republican party is interested in the african american community. as far as trying to prevent, i think it is important to note in history what happened. and the crack in the south were very harsh.

in the south were very harsh. if he were white and came forward, you do not have to take the literacy test. people were scared and intimidated and scared from voting. if you like and using a drivers license and a literacy test, you would demean the horror of what happened in the 40s and 50s. it was horrific. no republican is in favor of that. show your driver's to have an honest election is not unreasonable -- showing your drivers license to have an honest election is not unreasonable. [applause] >> thank you for coming. my question is, i believe that we must first define which

republican party. i we discussing the republican 19 century? abraham lincoln republican party? are 1960 eight debugging green party, richard nixon and ronald reagan? republican party, richard nixon and ronald reagan? which one do you identify with? >> great question. i think that hits the nail on the head of what our obstacles are. many people perceive that there has been a completely different party. the argument that i'm trying to change is that we do not talk about it.

there are some who do not see an abrupt difference. we see horrible jim crow and horrible racism that happened in the 30s, 40s, 50s. it was all democrats and not republicans. some of them have switched over to become republicans. but the republicans by nearly were not those people. it is an argument of an obstacle. u.s.f the african-american senators was a guy -- i am blanking on his name. brooks. >> brooks. yes. [laughter] , if democratss had the incredible history of

abolition and emancipation and voting rights, you would hear about it all the time because democrats are good at talking about stuff like that. republicans have done a terrible job. , if i said,you could he think the founders of the -- are? would anyone know that they are republicans? >> yes. >> ok. you know more than i know. [laughter] to bedon't mean that insulting. i'm trying to find out what you know. the republican party has not talked enough about the great history and interaction between the public and party and black history and voting rights in our country. i would try to make the argument that it is an uphill battle. it is. for me to try to convince you that we have changed. that is what i'm trying to do. >> good morning.

i'm a navy veteran from kentucky. [applause] >> great. dr. oriole student here at howard university majoring in political -- i am a doctoral student here at howard university majoring in political science. there is a bill for industrial purposes. my question to you is being from all of those different places in that no kin cranny, there has-- nook and cranny, or has been a large amount of african-americans who have been incarcerated because of drug use. how will you take this into -- the poor to benefit from this industrialization? >> thank you for the question.

it is a good question. seeing if imple of can work with both sides. i signed a letter to ask for a waiver from no child left behind. i'm also lobbying the democrat governor working with congressman from louisville on the issue at the federal level. we have a state law passed, but we need to get a waiver on the federal level. it is important we distinguish. drug.is a crop and not a ru use it for paper and rope and clothing. a lot of stuff. it was a huge victory. we won with 90% of the vote when we started out. this is what both parties are working on together. i hope that everyone will benefit from it, including african-americans. on the incarceration thing, i

have the bill at mandatory minimums. there have been some support. rward.e steps fo not standing up here and saying that drugs are good. i'm saying that even the most benign of drugs like marijuana, you will not show up for class. i think you eat too many doritos. [laughter] forever doing stuff until they are 25 and a light bulb goes and then they get married or something and they tend to settle down more. i do not want to see them in jail. i will do everything to get them out of jail. [applause] >> thank you for coming, senator. .'m a freshman from new orleans you can use the filibuster the

based on the obama's lack of transparency on the drone program. dear fellow senator gave testimony on the floor against a -- usdah a provision has a right to ignore any judicial rulings. party,n your ideological the tea party, has spoken out against it. why didn't not deserve the full buster buster the cia confirmation date? theilibuster of confirmation cia did they? >> did you give me some

clarification? >> [indiscernible] >> we had a lot of votes recently. i'm not sure i have all of the details about this. >> the democrat from montana was on the senate floor. in auld at a provision recent appropriations bill, i believe it was, having to do with agriculture. that tells revision the usda to ignore any judicial rulings are possible rulings on foods. immunity toe legal agriculture business. >> i cannot remember if we had a are not.his-- -- vote >> it was passed. >> and against giving immunity in general.

-- i'm against giving immunity in general. if we give like immunity to google to turn over records for what you search for on your computer, that is a mistake. with any company. if there is an obligation to deliver food that is not harmful to you and they can deliver something that a court says is harmful, we should go to the courts and the government -- it is a specific vote have to look into. i really do not remember the details. what is the best answer i can give for now. >> good afternoon. i'm a sophomore from chicago. recently the state of maryland -- getting capital punishment repealed. i went to get your view on the death penalty.

have mixed feeling on the death penalty. if someone came into my house and killed my wife, if i were there at the time, i would have no problem pulling the trigger to defend my wife. a week or two later, i do not know if i would have been a big enough person to forgive. i also know that the system has made mistakes. i'm a huge fan of our court system of having a trial by jury in having a judge, there is some casesce in some rate that involve murder also and it was proven time after time that they were making mistakes. the courts are making mistakes. i do have some reservations. i'm not sure exactly what the answer is. i do in that most penalties for crimes should be done at the state level and not the federal level. i'm not a big fan of adderall --

except for maybe treason. >> thank you. thank you for coming this might affect you spoke up against the civil rights act -- the voting rights act. -- thank you for coming despite the fact that you spoke up against the voting rights act. aside from the moral reason not to discriminate, when is it ok legally to discriminate? >> i think that is a mischaracterization of my position. i've never been against the civil rights act ever. i still continue to be for the civil rights act and the 14th amendment. [inaudible] thatere was one interview

had a long extended conversation about the ramifications beyond race. i have been concerned about the ramifications of certain portions of the civil rights act beyond race. it is being applied to smoking, ands, listing calories things on menus, and guns. i do question some of the ramifications and extensions. i have never questioned the civil rights act or came out against it. your characterization is incorrect. [applause] >> good morning. i'm a native washingtonian living in the colonial city. d.c. residents pay more in federal taxes than they get back in the federal government. my question is this -- the 14th amendment was passed to protect coming out of inslaved

slavery and not corporations. do you believe corporations are people that have the same protections as natural citizens without any of the negativity? second, the constitution requires that congress declare war, the power to declare war is the power that congress has. allegedly lied about an affair. george bush be considered a war criminal for getting the u.s. into a war with iraq? should barack obama be impeached for getting into libya without an act of congress? [applause] , yes. about yes, no, no [laughter]

corporations are not the same as people. you do not have a trial by jury. i think sometimes corporations use government to get special privileges and i'm against that. i'm against special tax reductions for corporations. i'm against anything that takes your money. however, on the other side, corporations do have a very important function in our society. let's say when you graduate and you get out and you start a plumbing business and you are doing pretty well and then someone sues you. one of your pipes breaks and it was an accident. now all of your profits and assets are taken by the court. should they be able to get your house?

bankruptcy is debated on all the time. it could be toward creditors. there has to be some balance. there needs to be some protection. you will meet people in your life who have been bankrupted the times and then go on and hit it big. and said, wethem will take your house and something else -- i try to do my best all the time, but i'm human. they be able to take my house and things i have worked for four years? i have a corporation that excludes me from them coming and taking my house. it is not all huge operations. sometimes it is mom-and-pop operations. i'm opposed to republicans or presidents taking us to

war without a declaration. [applause] two with the microphones. >> good afternoon. i'm i'm a graduate student at harvard university in the physics department. my question is in reference to something you said earlier in your speech, namely that you are for the market being free. i'm someone who agrees that the market should be free, but i wonder to what degree? for example, the idea of there being no longer epa are usda to regulate things that are helpful or not helpful for citizens is a problem. that a protection intoan be talked -- tucked various cronyism is upsetting to me.

to what degree is the republican party and you in particular dedicated to making sure that free markets are in fact free? [applause] is a good it question. it is something that i think we have done a poor job. the publicans have done a poor job of promoting that we believe in protection for the environment. i believe we can do a better job. i believe that if you believe in strict property rights and no one should pollute their neighbors property, you should get absolute justice. the clean water act is and has an appropriate purpose or goal. the clean water act says you cannot discharge pollutants into the streams of america. what does that mean to me? chemical companies are not allowed and should not be allowed to dump chemicals into the ohio river. absolutely.

what the clean water act has become though is that we now say that dirt is a pollutant and your backyard is a stream. we have gone too far. this went to the supreme court last year. a family bought a lot near a lake and not on elite and no rivers or streams. quarter of an acre lot. the epa sent them a no and said , you are being fined $75,000. they said it was the wet lands. going back to the clean water act. we took something that was well- intentioned to stop companies from dumping chemicals into the water and wear using it to abuse middle-class families to put some gravel on a lot that does not have any water on it. they had the audacity to tell them, you have no recourse in court.

supreme court said, this is america for goodness sakes. they cannot take your property. my answer to you would be, we need to do a better job of saying we believe in a free environment. we believe in rules, but the balance has shifted too far. we are abusing property rights and small property owners. we need to shift the balance back. if you shift the balance of regulations too strongly, you lose jobs. that is where we are. >> good morning, senator. my name is jeffrey. i'm a foreign business student here. i'm from washington, d.c. how are you? >> very good. when i was at the school of business, i went to one of my teachers office. x. malcomlm

>> your teacher said that we killed? open up the files on who killed malcolm x? >> let's give him a chance. i do not want-- to see separation. i cannotrd to -- claim i'm an expert on malcolm

x. i would say that there were some they were talking about empowerment and being a good person and taking it upon yourself to be a good citizen in your community. probably malcom x is in favor of that i agree with. i do not agree with the idea of separation. i think we need to move toward the idea that we are really not that different. >> one more. it has got to be an easy question. ofi'm an administration justice major. i'm a freshman. you say you want a government that leaves us alone. i do not want that. i want a government that will help me with my education. -- thea government

society is mirrored in capitol hill. do you, senator rand paul, have a solution to come up with new american values of the citizens of this nation have a worth? >> i think what i would say when i say i want a government that leaves you a loan, the main reason i say -- and we can the reason i say leaves me alone -- the done to men who stood people gave him a you time -- but in america can do what you want if we leave you alone. and we ought to. [applause] we do not have to agree on every issue. there are a lot of issues where we will not agree upon. but if we have a government that -- oneolves every issue,

of the examples i say is that it does not because i do not believe in no government. i believe that a government should only spend what comes in. $3.8e are spending trillion. i'm not for borrowing from china. if we borrow it from china, you will graduate from howard and have $60,000 in debt and then you have no job because we borrowed so much money from china that we are hurting the economy. we had to think the immediate a studentyeah, i have loan. i'm not against it in loans. we have to be careful. if we give everyone unlimited student loans and everyone goes to college i would become the country that is so embedded

that we have no jobs, have we done you a good service? you may not agree, but i think the leave me alone is a good mantra for the government. government has to be involved in certain things, but there are many things we can meet government out of. n thankingjoin me ani senator rand paul. [applause] [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> former british prime wasster margaret thatcher honored at the house of commons on wednesday. the current prime minister david cameron spoke about the life and career of mrs. thatcher who was the first and only female prime minister. you can watch this event at c- span.org. >> margaret thatcher was a remarkable type of leader. she said very rarely, i'm not a

consensus politician, but a conviction politician. she could sum up those convictions most profoundly with her upbringing and values in a few short phrases. strong defense. liberty under the rule of law. you should not spend what you have not earned. the clarity of these convictions was applied with great scourge to the problems of the age. the scale of her achievements is only apparent when you look back to britain in the 1970's. successive governments have failed to deal with what was beginning to be called the british disease. appalling industrial relations, high inflation. it seems absurd today, but the stakes have gotten so big. .he air was thick

there was a sense of the role of government was simply to manage decline. margaret thatcher rejected this defeatism. she had a clear view about what needed to change. inflation was to be controlled. fiscal discipline. industries would be set free in the private sector. trade unions would be handed back to their members. people should be able to buy their own homes. success in these endeavors was never assured. her political story was one of perpetual back and forth. sometimes even in her own cabinet as well. her career could have taken an entirely different path. , she went for40's a job at ici. result department rejected her application and wrote this, this woman is headstrong and

dangerously self opinionated. [laughter] even her closest friends would agree that she could be all of those things. andused that conviction resolve in the service of our country and we are better for that. margaret thatcher was also a great parliamentarian. she loved and respected this place and was for many years its finest debater. she was utterly festive he is in her preparation. idious in her fasted ye preparation. it was like the arms of a giant octopus shook everything in whitehall. every on certain every question everyry answer and

question. you could see him running through the lobby. .air was disheveled another member cried out, rome wasn't built in a day. to which he answered, yes, but margaret thatcher was not the foreman on that job. [laughter] >> a look at president obama's 2014 budget. we will talk with two members of congress. republican kevin brady of texas ries ofocrata hakeen jeff new york. "washington journal" is live on c-span every morning at 7 a.m. eastern. saturday on american history tv, a chance to weigh in live on

emancipation and civil rights and the role of corporations in american life. san francisco start at 9:30 a.m. eastern with a look at the freedom movement. it is followed by your questions. the rolea debate on of corporations in american life. that is also called by your questions, live at 1:30 p.m. , saturday,fe starting at 9:30 a.m. eastern on c-span 3 american history tv. president obama unveiled his new $.8 trillion budget request for 2014. $1 trillion from federal programs and at $800 billion in new taxes, including an extra tax on cigarettes. we will europe and the president in a moment and get reaction from capitol hill. mitch mcconnell and house

republicans leaders. take, the gop leaders questions from reporters on the plan. [applause] good morning, everybody. please, please have a seat. well, as president, my top priority is to do everything i can to reignite what i consider to be the true engine of the american economy, rising, thriving middle class. that's what i think about every day. that's the driving force behind every decision that i make. over the past three years, our businesses have created nearly 6.5 million new jobs, but we know we can help them create more. corporate profits are at an all- time high, but we have to get wages and incomes rising as well. our deficits are falling at the fastest pace in years, but we

can do more to bring them down in a balanced and responsible way. the point is our economy is poised for progress. as long as washington doesn't get in the way. frankly, the american people deserve better than what we've been seeing, a short sided crisis-driven decisionmaking like the reckless across-the- board spending cuts that are already hurting a lot of communities out there. cuts that economists predict will cost us hundreds of thousands of jobs during the course of this year. if we want to keep rebuilding our economy on a stronger, more stable foundation, then we got to get smarter about our priorities as a nation. and that's what the budget i'm sending to congress today represents. a fiscally responsible blueprint for middle-class jobs and growth. for years the debate in this town has raged between reducing

our deficits at all costs and making the investments necessary to grow our economy. this budget answers that argument because we can do both. we can grow our economy and shrink our deficits. in fact, as we saw in the 1990's, nothing shrinks deficits faster than a growing economy. that's been my goal since i took office, and that should be our goal going forward. at a time when too many americans are looking for work, my budget begins by making targeted investments in areas that will create jobs right now and prime our economy to keep generating good jobs down the road. as i said in my state of the union address, we should ask ourselves three questions every day -- how do we make america a magnet for new jobs, how do we give our workers the skills they need to do those jobs and how do we make sure that hard work leads to a decent living? to make america a magnet for good jobs, this budget invests in new manufacturing hubs to

help turn regions left behind by globalization into global centers of high-tech jobs. we'll spark new american innovation and industry with cutting edge research like the initiative i announced to map the human brain and cure disease. we'll continue our march towards energy independence and address the threat of climate change. and our rebuild america partnership will attract private investment to put construction workers back on the job rebuilding our roads, our bridges and our schools. in turn, attracting more new business to communities across the country. to help workers earn the skills they need to fill those jobs, we'll work with states to make high-quality preschool available to every child in america. and we're going to pay for it by raising taxes on tobacco products that harm our young people.

it's the right thing to do. [applause] we'll reform our high schools and job training programs to equip more americans with the skills they need to compete in the 21st century economy. and we'll help more middle-class families afford the rising cost of college. to make sure hard work is rewarded, we'll build new ladders of opportunity into the middle class for anybody who's willing to work hard to climb them. so we'll partner with 20 of our communities hit hardest by the recession to help them improve housing and education and business investment and we should make the minimum wage a wage you can live on because no one who works full time should have to raise his or her family in poverty. [applause] my budget also replaces the foolish across-the-board spending cuts that are already hurting our economy. and i have to point out that many of the same members of

congress who supported deep cuts are now the ones complaining about them the loudest as they hit their own communities. of course, the people i feel for are the people who are directly feeling the pain of these cuts, the people who can least afford it. they're hurting military communities that have already sacrificed enough. they're hurting middle-class families. there are children who have had to enter a lottery to determine which of them get to stay in their head start programs with their friends. there are seniors who depend on programs like meals on wheels so they can live independently but are seeing their services cut. that's what the so-called sequester means. some people may not have been impacted but there are a lot of folks who are being increasingly impacted all across this country, and that's why my budget replaces these cuts with smarter ones, making long-term reforms, eliminating actual waste and programs we don't need any more.

so building new roads and bridges, educating our children from the youngest age, helping more families afford college, making sure that hard work pays, these are things that should not be partisan, they should not be controversial, we need to make them happen. my budget makes these investments to grow our economy and create jobs and it does so without adding a dime to our deficits. now, on the topic of deficits, despite all the noise in approximate washington, here's a clear and -- in washington, here's a clear and unasailable fact. our deficits are already falling. over the past two years, i've signed legislation that will reduce our deficits by more than $2.5 trillion, more than 2/3 of it through spending cuts, and the rest through asking the wealthiest americans to be paying their fair share. that doesn't mean we don't have more work to do, but here's how we finish the job.

my budget will reduce our deficits by nearly another $2 trillion so that all told we will have surpassed the goal of $4 trillion in deficit reduction that independent economists believe we need to stabilize our finances, but it does so in a balanced and responsible way, a way that most americans prefer. both parties, for example, agree that the rising costs of caring for an aging generation is the single biggest driver of our long-term deficits. and the truth is for those like me who deeply believe in our social insurance programs think it's one of the core things that our government needs to do if we want to keep medicare working as well as it has, and we want to preserve the ironclad guarantee that medicare represents, then we're going to have to make some changes.

but they don't have to be drastic ones. and instead of making drastic ones later, what we should be doing is making some manageable ones now. the reforms i'm proposing will strengthen medicare for future generations without undermining that ironclad guarantee that medicare represents. we'll reduce our government's medicare bills by finding new ways to reduce the cost of health care, not by shifting the costs to seniors or the poor or families with disabilities. there are reforms that keeps the promise we made to our seniors, basic security that's rock solid and dependable and there for you when you need it. that's what my budget represents. my budget does also contain the compromise i offered speaker boehner at the end of last year, including reforms championed by republican leaders in congress. and i don't believe that all these ideas are optimal, but i'm willing to accept them as part of a compromise.

if and only if they contain protections for the most vulnerable americans. but if we're serious about deficit reduction, then these reforms have to go hand in hand with reforming our tax code, to make it more simple and more fair so that the wealthiest individuals and biggest corporations cannot keep taking advantage of loopholes and deductions that most americans don't get. that's the bottom line. if you're serious about deficit reduction, then there's no excuse to keep these loopholes open. they don't serve an economic purpose. they don't grow our economy. they don't put people back to work. all they do is to allow folks who are already well-off and well connected game the system. if anyone thinks i'll finish the job of deficit reduction on the backs of middle-class families or through spending cuts alone, that actually hurt our economy short term, they should think

again. when it comes to deficit reduction, i've already met republicans more than halfway, so in the coming days and weeks, i hope that republicans will come forward and demonstrate that there -- they're serious about the deficits and debt as they claim to be. so growing our economy, creating jobs, shrinking our deficits, keeping our promise to the generation that made us great but also investing in the next generation, the next generation that will make us even greater, these are not conflicting goals. we can do them in concerts. that's what my budget does. that's why i'm so grateful for the great work that jeff zients and his team has done in shaping this budget. the numbers work. there's not a lot of smoke and mirrors in here. and if we can come together, have a serious, reasoned debate

not driven by politics and come together around common sense and compromise, then i'm confident we'll move this country forward and leave behind something better for our children. that's our task. thank you. god bless you. god bless the united states of america. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] [applause] now reaction from mitch mcconnell on the president's budget. we will also hear from senator rob portman.

>> like nearly every one of his budgets so far, it's like really late. he had for two months, he has kept the country on hole, both the house and the senate and they have already passed their own budgets. it's hard to see what the white house plans to accomplish here. i want to believe the intention is not to purposely blow up the budget process so the president can campaign against the very budget process he blew up. but from the reports we are seeing, it's getting harder and harder not to draw that conclusion. after all, the document headed our way does not bridge the differences between the house and senate-passed budgets. but his budget does not represent some grand pivot from left to center. it's really just a pivot from left to left. i mean, if these reports were correct, it's the same old thing that we have seen year after year after year.

and that's really too bad, because it's not like we don't know the kinds of things that need to be done to get our budget back to balance and americans back to work. we need to provide a fairer and flatter tax code so they can save for the future and create jobs. we don't need a budget that piles tax increase on top of tax increase. we need the private sector to grow again. we don't need a budget that spends more money we don't have. we need a balanced budget that encourages growth and job creation. we don't need an extreme unbalanced budget that won't balance in my lifetime or mine. the white house initially made some fantastic claims about the amount of deficit rezucks -- reduction

supposedly contained in its budget. when you get through the facts, and that's over a decade, all of it coming not surprisingly from tax increases. in other words, it's not a serious plan. for the most part, just another left-wing wish list. let me clarify a wish list actually with an asterisk. the president concedes there needs to be a slide from bankruptcy. he is coming to grips with the math here. it's well past time for reform and it's something the president ought to want to do because he presumably cares about saving entitlement programs not because he wants another excuse to raise taxes. as we start to think about reforming entitlement programs we should think about reform this way.

will the changes we make help modernize entitlements over the long-term in order to eventually meet the needs of a rapidly aging population in a realistic way or just kick the can down the road without actually solving the problem? remember, kicking the can down the road is how we got to this point in the first place. we need to have the courage to make the tough decisions that americans sent us here to make. if the president and his allies care about social security and medicare and i take them at their word that they do, then they need to prove that commit hit by having structural reforms -- that commitment by having structural reforms to save them. this budget is a chance to do that and i hope they will, but if they choose to continue using these programs as campaign weapons instead, it points to a clear outcome. the entitlement programs that will americans rely upon will go bankrupt and today's washington democrats will have to live with

that legacy. we can't get to that point, but republicans only control a tiny sliver of the federal government so there isn't much we can do until the president and his allies get serious about reform. it's way past time they did. we don't need another reheated budget. we have had enough of those in the past few years. we need a serious reform- oriented budget. sadly, i don't believe we'll see that one today. mr. president, i yield the floor. today finally we will see the president's budget. when you look at the history over the past decades, never has a budget and submitted so late. the budget is due in february. president'sn of the wor

first term, this would definitely be that latest omission in decades. central us address the challenge of our time. of young people i met with today from ohio state university. their futures are at stake. it is a better economy today, but it is about the richer. will we get control these record that an deficit and turn our country to the america that we have taken for granted over the past century? an america where wages are going and the beacon of hope and opportunity for the rest of the world. or will we continued to slide where wages have gone down and

the debt continues to grow? itrisk a financial crisis places in europe, like greece. they allow the deficit and debt to grow that it became as large as the entire economies of those countries. as of this year, we are told that our debt in this country is the size of our entire economy. there are studies out there that indicate when we get to that kind of a level, there is a big impact on economic growth. we are seeing it. whether it is measured in our growth or jobs, we had a very disappointing report showing .hat we only gained 88,000 jobs disappointing all projections. half a million people, almost 500,000 people left the workforce.

we have the lowest labor participation rate. the percent of people working that we have had since the days of jimmy carter. that is over three decades. , the policies of jimmy carter have been replicated over the last few years in the sense of larger government and more regulation. it is an economy that is starting to resemble what happened back in the carter days. that is unacceptable. we need to provide opportunity for americans to get to the second wrong on the latter and the third and the fourth. on the ladder and the third and the fourth. there is a study by a couple of economists that indicate the would have about one million more jobs this year alone if we do not have debt at this level. this year we are told we will have more debt.

fourth year in a row. never in a history there we have the visits of trillions of dollars. of trillionsficits of dollars. from what i have heard from the $7 trillion to our debt over the next 10 years. that is already at $16 trillion. the entire size of our economy where we unfortunately have continued doldrums because we cannot get out of this overhang of debt and deficit. it is time to make a change. it is a moment for truth. it is an opportunity to address challenges. the president's budget will not be adequate enough to meet that challenge. there are some things that i think will be positive. i want to say that. i understand the president is likely to propose a more

accurate measure of inflation when you talk about how to i just for the cost of living. for the cost of living. social security is in deficit. a lot is projected to be spent for benefits and social security. that is greater than the amount of payroll taxes coming in. $77 billion shortfall is not ok. where to the disability trust fund -- we are told the disability trust fund will be insolvent by 2016. that is a few years from now. more people have gone on disability unfortunately. fund is going bankrupt in a few years. even if you include all of the , thatn the trust fund

will be insolvent by 2033. that is not that long from now. folks who are retiring today, many of them are reluctant to lead to that point. are lookings today at that. what happens when that goes bankrupt. there is a cut in benefits. that is the law. with this hemorrhaging every 77 billion with these trust funds heading toward insolvency -- it has to be addressed. i commend the president for itng the measure of -- increases taxes as well. it is both a revenue for his proposal and also some savings. the more accurate measure of inflation is used. this is a controversial issue

among some folks. i understand that. i commend the president for putting it in the budget. that is justhat, one step in the right direction. even with that proposal, social security will continue to have a normal shortfalls. on the healthcare side, i'm told that president may make it proposal to reduce spending in health care. i think that is a thing, but not adequate. we could argue about where the 400 billion dollars comes from. it looks like it'll come out of providers. the people providing healthcare and lowering their endorsement. -- their reimbursement. we need to be careful on how it is done. let's assume we agree on the $400 billion. what would that mean? that means instead of going up it would go up 100%.

we have ais challenge in front of us that requires a much more aggressive approach. it requires us to be more honest with the american people. ande incredible debts deficits do not enable us to do that. it is like a shadow over the economy. it is a wet blanket over the economy. for the young people listening today, it will affect their futures in significant ways if we don't address the problems. we will see what happens with this budget proposal today. i am hopeful it will have more in terms of savings than has been suggested in the media. those savings that are in there, i think we ought to support and encourage the president to work with us on taking it to the next level. to truly address this challenge. on attacked side,, the president is likely to recommend

additional increases and tax. taxes were increased 620 orient dollars already this year -- 620 billion dollars already this year. is likely todent recommend taxes at about that level again. $600 billion or more. $1.5say it is more like trillion. whatever it is, we have to acknowledge that increasing taxes again will hurt the economy. there is no question about it. but think about that for a moment. we are told by the congressional budget office that analyzes these budget proposals but currently we have taxes as a percent of our economy. at levels in 2015 which would be

below our historic average. what does that mean? it is higher than average. public because of the fiscal cliff agreement and the new taxes raised over 10 years. this pending which is already at levels higher than the historic average which is about 20%, today it is at 23%, as ejected to go up and up. over the next three decades, it goes from 20% to about 39%. then they stopped counting because they cannot imagine spending at that level. we have no sense of how to get revenue at that level. no one is talking about taxes that would be increased that high.

these are issues we need to talk about as a country. hellmuth taxation dili want to do we- how much taxation want to have? we ought to come up with a plan. 10 years from now, where do we want to be. we think true balance means you balance the budget. he stopped ending more than you take in. spending more than you take in. need to come up with something that makes sense for the american people. our issue is not the revenue, it is the spending. that must be addressed. i think the president for his indulgence. i asked my colleagues on both sides of the aisle, let's work america to get -- let's work to get america back on track. but more capitol hill reactions to the president $3.8 trillion budget request. we will hear from john boehner

and other house republican leaders. >> he does deserve some credit. holdld hope you would not hostage these modest reforms for his demand for bigger tax hikes. do what we can agree to do? let him we find the common ground we do have an move on then? tax hikes in got january. we do not need to raise taxes on the american people. i'm hopeful in the coming weeks we will have an opportunity to the budget process to come to some agreement. >> good morning.

finally the president has offered his budget to the american people. ist we see in the document more of the same. more spending, higher taxes, more debt. the speaker talked about the fact that there are some things of the budget be on the tax increases that we can find agreement on. and i share the sentiment that we ought to see if we can set aside the divisiveness and come together to produce results that people sent us here to do. if the president believes, as we do, that the programs like medicare, medicaid, social security are on the path to bankruptcy and that we actually can do some things to put them back on the right course and save them to protect the beneficiaries of these programs, we ought to do so. and we ought to do so without holding them hostage for more tax hikes. as the speaker indicated, listen, the disagreements we have in this town are well

published and well-known, but let's start anew and try and say, look, set aside these differences and let's come together on the things we can agree on. i think most people do that in their daily lives and expect nothing less of us here in washington. >> well, now that we've -- we'll see the president's budget finally, we'll have clear differences. the president's budget does not balance. this is a challenge that we have. you know, nothing came stronger in showing that until yesterday. yesterday i took a group of freshmen down to watch the selling of our debt. you know, we do that every monday and tuesday. other times we expand it out to other days. you walk into the room and you watch the billions of dollars being sold and you watch who's buying it. from rates happens to be low

right now, but just the increase in the interest rate itself can break us. but the addition day after day after day, this is the moment, the opportunity and truthfully it's the fairness of the american people to put a path onto a balanced budget. i look forward to the day we don't have to go to borrow in the aspect of where we're going. and as i took these freshmen members around and they looked into the glass as the minutes -- the billions of dollars went out, you know how long we're borrowing, a simple month, because we have to come right back again and do it one more time. that to me is the real challenge and the differences between these two budgets. this is an opportunity to come together with one simple goal, find a budget that will balance. >> as we remember a great leader, margaret thatcher, this

week i thought i would just share a quote in the words of margaret thatcher. you may have to fight a battle more than once to win it. as we stand here before you today, it's the same battle. it's a battle for america's future, for the policies that are going to make america strong, that are going to create jobs, that are going to make a stronger economy, that are going to keep taxes lower so that families have more take-home pay and that also that the congress is doing its job as far as putting forward a budget, ours that balances in 10 years and provides that certainty and that confidence so that people can make decisions moving forward. and the reason that it is important is because it does impact the college grads that

are out there trying to find jobs and it impacts families that are continuing to struggle, the seniors that do not have confidence as to these safety net programs. and when i was home over the break, i continued to hear this message everywhere i went in eastern washington, d.c., the continued concerns over our economy, the struggles to find jobs, the uncertainty over what tax rates are going to be or what health care reform is going to be going forward. and our basic responsibility is to get a budget in place and one that balances in 10 years is one that will provide that confidence and that certainty for the american people that they need so that america will be stronger and a better country. >> well, we do honor margaret thatcher this week. i so admired her courage, her strength of character and her conservative leadership. and she provided such a role model. that's probably the reason both

cathy and i have her top of mind this morning. and she also once said, i love argument, i love debate. and so today we will continue the debate in washington in gusto in honor of margaret thatcher. and there are so many major issues to debate because the american people are hurting, and we will delve into the president's budget this morning and learn more about it. but it appears at this point to be very much a status quo budget, that just has more of the same, more tax increases, more spending, more debt, more deficit, higher unemployment, less g.d.p. growth. that stands in stark contrast to the republican vision that we laid out a few short weeks ago, a budget that balances in 10 years, that puts us on a path to energy independence which is great for american manufacturing and families concerned about their pocketbook.

it has fundamental comprehensive tax reform in it which ends crony capitalism, stops picking winners and losers, closes special interest loopholes, makes a fairer, flatter tax code for all americans. it addresses the issue of our autopilot spending programs, setting aside everyone who's 55 and older, making no changes to those in retirement or near retirement but saves those programs for the young people that are coming up. and most importantly, it increases economic growth and opportunity, encourages job creation here in the united states. so we look forward to a continued debate this week. >> well, thank you. i want to thank the leadership team for inviting me here today. this is my first opportunity to greet most of you.

my name's luke messer, i'm a congressman from east central and southeastern indiana, indiana's sixth congressional district. i want to echo the comments made by others that we're encouraged to see in this budget the fact that the president mentioned entitlement reform but discouraged to see him lock that reform into his demand for further tax increases. you know, everybody up here has family members, friends and neighbors who are dependent on social security and medicare. in my case, i was raised in a single parent family by a mother who's nearing retirement. she still works at the delta faucet factory in greensburg. i have an 85-year-old grandmother who worked her whole life as a cook and janitor. both are dependent on social security and medicare and would not be able to make it through their retirement if these programs are not protected and preserved. the president was fond of saying in his campaign it's simply math. well, the simple math is if you are not reforming medicare and social security, then you see these programs fail.

it's not acceptable that happen. the indicated in this budget that he would support the reform of social security and medicare. if that's the idea then let's go to work on doing that work and not tie that important improvement to further tax increases. thank you. >> speaker boehner, around 11:00, senators manchin and toomey are expected to send an amendment to gun control for background checks. >> any bill that passes the senate we'll review it. in the meantime we'll look at hearings looking at the source of violence in our country, but i want to wait and sew what actually passes over in the senate. >> will the house veto that legislation?

there's some concern among democrats that it will be a pocket veto. >> the senate passes a bill, the house will review it. >> on the specific issue, though, are house republicans opened to the idea of expanding background checks for gun purchases? and how much would senator toomey's endorsement, a known conservative, help with, you know, help with that? >> well, we'll wait and see what the senate does. it's one thing for two members to come to some agreement. it doesn't substitute the will for the other 98 members. so we'll wait and see what the senate does. >> what do you think -- should something like this be put into law? >> what i think is that we're going to review whatever the senate might pass. >> recently, you said that you supported real background checks for everyone. this bill only limits it -- >> no, no. no, that's not what i said. one of the issues that we have today is that if there is a background check required that they don't actually check all the backgrounds.

that's what i was suggesting. we're not enforcing the laws that we have on the books today. and so we're going to have a background check that's in the law, let's make sure we do our real background check which not in every case happens. >> just limiting to internet sales and gun shows, it doesn't create any kind of national registry. is this something that you think house republicans can -- >> again, i think it's important for the senate to do its work. and once they do their work, we'll be happy to review it. >> what's the best way for republicans to deal with debt limit this time around? >> i think we made it clear that the sequester will stay in place until we have cuts and reforms that puts us on a path to balance the budget over the next

10 years. and if -- as we look at the debt limit, those are the kind of changes that we believe will be important that would allow us to increase the debt limit. thanks.

you heard him make a very important point that his number one priority is what it has always been. economic growth and job creation. that strengthens the middle class. he also made the very important point that you can grow the economy and strengthen the middle class and reduce our deficits in a responsible way. you can do both. that is what he has been doing. he signed into law a $2.50 trillion deficit and debt reduction, two-thirds of that coming from spending cuts and the budget he presents today will further reduce the deficit over 10 years by more than $1.80 trillion. i have with me today four members of the president's team to discuss the budget with you. i will begin with the acting director of the office of management and budget. he will then introduce the other participants and i will remain to field your questions after they make their presentations. thank you.

>> thanks, jay, and good afternoon, everyone. i will to a quick review of the major components and i will turn to alan to review the economic assumptions and will be what through the other policy highlights. the main message of the president was a budget is you can make critical investments to strengthen the middle class, create jobs, and grow the economy while continuing to reduce the deficit in a balanced way. we can do both balance deficit reduction and jobs investments. on the left-hand side, in terms of balance deficit reduction, the budget bills off the reduction achieved to date and includes the fiscal cliff compromise offer to speaker john boehner from last december.

import lee, the budget replaces the indiscriminate cuts of this sequestered with balance deficit reduction. it turns the sequester off. at the same time, the president does the budget proposes important job investments to enhance economic growth through skills and competitiveness and investments in education and r&d. all these investments are fully paid for. the investments do not add a dime to the deficit. deficit-reduction, over the past few years, democrats and republicans have worked together to cut the deficit by more than $2.50 trillion. here is the breakdown of deficit reduction achieved to date. the budget control act capt. -- discretionary spending, saving

over $1 trillion. another three under $70 billion in savings through 2011 appropriations, the end of last year's fiscal cliff agreement reduced the deficit by more than $600 billion. this deficit reduction a lowered interest payments saving $480 billion more. -- more than $2.50 trillion has been achieved. the president is committed to $4 trillion. this is the amount for the benchmark, if you will, that that bowles-simpson and other economists have established to put this on the correct path. the president was a budget finishes the job with an additional $1.80 trillion in deficit reduction.

this $1.80 trillion is from the compromise offer the president made to speaker john boehner during the fiscal cliff negotiations in december. by including this offer in the budget, the president is showing his willingness to compromise and make tough choices in his commitment to putting the country on a sustainable fiscal path. here are the components of the deficit reduction that tickets from the $2.50 trillion achieved to date to over the $4 trillion target. on left side, starting with a $2.50 trillion we have achieved, the first bar, $400 billion in health savings that strengthen medicare by squeezing out waste and incentivizing delivery of high quality and efficient health care.

next, to honor dollars billion in savings from other mandatory programs including reductions to foreign subsidies -- farm subsidies, performs to retirement contributions, and selling of unneeded federal real estate. next, $230 billion in savings by indexing annual and placement -- inflation adjustment to the changed \[inaudible] cpi. another beyond the bca caps. and revenues in tax reform by closing loopholes and reducing tax benefit for families with more than $200 -- $200,000 in income. at the same time, we invest $50

billion in infrastructure to repair our roads, bridges, and create jobs. an immediate $50 billion investment in infrastructure. in total, is the taves $1.80 trillion in additional deficit reduction over the next 10 years, bringing total deficit reduction to a $4.30 trillion with more than $2 in spending cuts for every dollar in revenue. to be very clear, this offer includes difficult cuts the president would not propose on their own including cpi, which the president is only willing to do with protections for the vulnerable and as part of the balance plan. the president is showing his willingness to take -- make tough choices in his commitment to reducing the deficit and putting the country on a sustainable fiscal path.

here are the annual deficits from 2012 to 2013 as a result of this deficit reduction. as you can see, in 2012, the deficit was 7% as a percent of the economy. the budget phases in deficit reduction to support the ongoing recovery and by 2016, the deficit is below 3%. by 2023, it is below 2% at 1.7%. 2023, a deficit 1.7%. as a result of the deficit reduction, that as a route -- a percentage of the economy is on a declining path. a declining -- with declining deficits and declining debt, the budget achieves an important milestone of fiscal

responsibility and sustainability. the budget reaches this important fiscal milestone while investing in the drivers of economic growth. in doing so, it demonstrates we do not have to choose between deficit reduction and economic growth. it shows we can do both. and indeed, we must do both. the country will not prosper if we have unsustainable deficits but it also will not prosper if our infrastructure is crumbling and our workers lack the skills to compete.

through paid for initiatives like pre k for all, job training, and accelerated infrastructure investment, this budget will enhance our nation's competitiveness and to balance deficit reduction, this budget will enhance confidence and laid the foundation for more durable economic growth. it is the right strategy for our economy, for creating jobs, and fulfilling prosperity. let me handed off to alan. >> thank you. let me say a little bit about the process that underlies the products -- the forecast in the budget as well as some of the key components of the forecast. the forecast is made jointly by the council of economic advisers and the opposite of management and budget and the treasury department. in what is known as the derica of -- troika process. this is to enable these agencies to calculate spending and revenues. we concluded the forecast in the middle of may. it is five months out of date.

we completed the forecast in the middle of november. it is five months out of date today. we make the forecast under the presumption that the president's budget and policies will be put in place. that means that we assumed the sequester would not take effect. the budget replaces the sequester with a much smarter set of spending reductions which would be much better for the economy. so bearing that in mind, the forecast is a little out of date. on the other hand, i think if you compare our forecast to private sector port chester's -- forecasters, there are more current forecasts, we're still in the ballpark. over 2013, we are projecting gdp growth to be 2.6%. that is assuming this requestor

does not take effect. the congressional budget office has calculated that the sequester will reduce gdp growth by six -- 0.6 of a percentage point. our internal estimates are similar. that suggests gdp growth will be around 2% this year if the harmful rare -- sequester remains in place. that implies that overall economic growth in 2013 will look a lot like economic growth in 2012. we added 2.2 million jobs in 2012. the disappointing thing is the economy is poised to grow more strongly. that is why we are projecting more deep the growth absent the sequester. we think -- the reason why we think the economy will grow more

strongly, the housing sector appears to have turned a corner. households are lot further along in the deleveraging process. corporate balance sheets are still quite strong. all of those conditions suggest the economy is in a position to do a lot better going forward but unfortunately, the sequester is a step backwards. over the full 11 years that we forecasted, that is 2013 through 2023, the average gdp growth rate is 2.8%. that is above what we think the long run potential growth rate for the economy, there are slack resources as a result of the economic crisis. the long run potential growth rates in the economy we put at 2.3% to 2.4%. our projection is quite close to the congressional budget office

and private forecasters. the 2.8% figure i mentioned for our forecast on average over those 11 years compares to 2.7% for the congressional office. very similar. let me next turned to the unemployment rate. the unemployment rate averaged 7.8% in the last quarter of 2012. it has since come down to 7.6% last month in march. we project the rate to fall to 7.5% by the end of this year. the average is 7.5% in the last quarter of 2013. and then to come down half a percentage point over each of the next three years so it would be 7% at the end of 2014. 6.5% in 2015. if we were to update the forecast today, that is one

component that we might change slightly. the unemployment rate has come down a bit faster than we expected when we made the forecast, when we made the forecast, the unemployment rate was 7.9%. last year, we saw the unemployment rate come down considerably faster than what our forecast had been. i would not be surprised if we're offline the same direction this year. if our forecast is conservative. i should note to our forecast exactly matches the average or private sector forecasters and the blue chips that was released this morning. inflation is projected to be 2.1% over this year and average 2.2% over the entire 11-year period we forecasted and that is very close to the congressional budget office and to private forecasters.

let me conclude by saying there are of course risks to any forecast. on the downside, the sequester i believe is a risk to our forecast as i mentioned. we do not assume the sequester would be in place. no one wants to sequester to be in place. it is where recognize this bad policy.-- widely recognized as bad policy. that is expected to shave 0.6 of 1% of gdp growth. the european debt crisis remains a threat to the economy. geopolitical tensions from around the world also remain a threat. i would like to balance so on the upside, there is potential for our forecast to surprise. -- i hate to call them risks, the opportunities are strong corporate balance sheets. if we list the uncertainty that has been weighing on the economy because of the budgetary issues and the manufactured crises that

have been causing uncertainty. that could help. there remains pent-up demand for durable goods, including cars. the housing market has been stabilizing nationwide. we're seeing home prices grow nationwide although some parts of the country are lagging behind. i think all of those are reasons why the economy is stronger this year and why there is potential for the forecast to be a bit conservative this year. let me turn it over next to gene. >> there is not much benefit to me standing up at my high. i will stay seated. the plan hits the right balance not just in terms of revenues and entitlement savings.

but the right balance in terms of an economic strategy that strengthens jobs and a recovery in the short term while strengthening our long term job creation and competitiveness. to do that, a budget needs to hit a fiscal sweet spot, which is that it needs to at one time, an economic plan at one time needs to create confidence that you are dealing with your long term fiscal challenges. that gives confidence to people deciding where to make long-term investment in job creation decisions and the u.s. is a place that is managing its long- term fiscal challenges. it also need to make sure that you are taking measures that are strengthening the recovery in job growth, particularly when you are coming back from the worst financial crisis since the great depression.

and third, you need to make sure you are making room for the things that will fundamentally make us competitive and will encourage more location of highway jobs -- high-wage jobs in the u.s. in the future and the key thing is that these work best together. a strong plan to jump-start job growth. a strong plan to jump-start job growth won't be as effective if people doubt if you're dealing with your long term fiscal future. a long strong plan that has austerity at a time when you're recovery is seeking to get its full momentum can be counter product for jobs and growth but also for your fiscal forecast. a strategy that forgets that we are competing against tough competitors around the world and

what those components are that make it a magnet for job creation. if you forget that you also fail. so hitting the sweet spot hits an economic strategy that the president has that deals with all of these together. jeff has described really well as it brings us under 2% of deficit -- percent of g.d.p. but let me do the other two components quickly and turn it over to my companion. one, this plan is good for jobs right now because first of all, it would take away the anti-jobs nature of the sequester. independent experts estimate would cost this economy from 500,000-750,000 jobs. as we do this long-term deficit reduction plans there, as the president said, measures to

jump-start job growth right now. this budget does include key aspects from the american jobs act that does not have any long- term impacts of our deficit but as part of this comprehensive plan that we're giving momentum to the recovery now. in addition to taking away the contraction and the job-costing nature of the sequester, this still has -- i will put in three buckets, a strong infrastructure comb poe innocent that is onent that is- comp accelerated. the offer that the president gave speaker boehner there is most of it in the fix it first. secondly, there are measures that are designed to help those communities and individuals who

have been most hard hit. things like one time $15 billion for project rebuild to help with the housing crisis today. or a project that cecilia worked together that gives people funds in the private sector to encourage those who have been the longest unemployed or most disadvantaged to get back into the private sector jobs. third, training to get people back to work. there's a one time tax credit for small businesses for sbretion their wages and jobs this year -- businesses for increasing their wages and jobs this year. these make most sense as part of a long-term package where it is jump-starting jobs in a context

where a 10-year plan is bringing down the deficit. secondly, this plan does include, even with the deficit reduction and the tight budgets, things that the president believes are critical for our competitiveness. that is for example, a focus on manufacturing, includes our manufacturing innovation institute, which we've already piloted. it includes expanding and making permanent the tax credit. it includes helping small businesses by having a $500,000 provision for small businesses. it includes a long-term commit to infrastructure and a strong authorize of our highway bill. it includes a commitment on skills. again, our community college

proposal but also a proposal that would consolidate our two major programs for displaced workers and put them together in one plan with greater accountability, with focus on results and a focus on helping everybody regardless how they lost the job and the proposal here would mean 1.2 million instead of 500,000 people would get re-employment assistance at this critical time in our economy. so we realize as we are jump- starting jobs, as we are putting in long-term deficit reduction, we're looking at what is going to make us most competitive. the tax reform could lower rates and reduce loopholes and still take on abuses in tax havens across the country that could be good for jobs.

this is another key part. some of the critical things, energy and others i will leave and turn them over to cecilia munoz. >> thank you. by staying a the table he was saving me from a pair of eyebrows above the podium so thank you for that. this budget is built on the progress made over the last several years. you've heard us describe and the president himself describe we need to equip every american with the skills they need to do the job and to get on a clear path to the middle-class. that education has to start in the earlier years so kids start school ready to learn. so there is a return on the

investment for preschool is very high. we also know that a lot of middle-class parents can't afford private preschool, so this proposal that every 4-year- old has access to high quality preschool. it delivers a host of other benefits to our society, including saving hard-working families a lot of money, thousands each year in child care costs. the budget at the state partnership, much like the k-12 education system works. it creates incentives for schools to create all day kindergarten and to expand opportunities for children younger than the age 4. it is investment of $75 billion, which we plan to raise the tax by .94 cents a pack on cigarettes. this is a major investment on the economy and the future of our children. i would say anyone who has been

around a 4-year-old they are a powerful force for the future and they are more than worth the investment. the proposal is part of a suite. as well as a $15 billion investment in successful evidence-based voluntary programs to help the most vulnerable first-time parents and their families. that is a program that demonstrates extraordinary benefits to those kids and the families and the rest of us overall. i want to touch also on the

promise proposal this is consistent with the president's vision to make sure we're growing the middle-class and protecting the middle-class. also providing ladders for people who are struggling to reach the middle-class. it san investment in 20 of the hardest hit communities across the community with the highest poverty. it does this by expanding tax credits but making additional investments in administration programs we think of programs that have demonstrated real value and a real impact. a $300 million investment in the department of education neighborhoods program and an investment in the huds program. to make sure we're helping local leadership to get communities on the other side of the tipping point to create jobs, to make sure folks are ready for those jobs and and to make it vablets for these jobs.-- it available

in these parts of the country ggainagain. part of the initiative is to expand the minimum wage to $9. there are also -- the budget outlines a variety of proposals to continue in investing a competitive work force. something you heard the president describe in the state of the union address, it is a high school redesign proposal. it is a competitive $300 million fund to provide challenge and relevant learning experiences to children in high school linking them to higher education, linking them to complers. -- employers. you heard gene mention the community college careers program and there is also in this budget the demonstration of the high quality and expansion of education in stem field,

science, technology, and math. this provides a variety of programs that exists across the government. the budget proposes to consolidate those so we can maximize the use of every one of those dollars. in addition to the bill, to build on the cost of the higher education. there is $60 million in the world fund to spur cutting-edge innovations aimed at driving the cost of college down. also to reward colleges who are driving the costs down. again, we an to drive education fund to reducing college costs. i'm going to highlight a couple things with respect to energy. the budget continues the president's all of the above energy strategy that we've talk you've heard us -- you've heard

us talk about. the trust to support research in transportation technologies and a race to the top style investment on $200 million to cut energy rates and build efficiency and modernize the grid. let me stop there because we want to have time for questions. >> thank you. what we'll do is i'll call on folks who have questions for a land, jeff, cecilia, and gene. i'll start with jim. >> thank you.

i don't know who best answers the question but i have two questions one on the corporate tax reform plan and the other on the change of c.p.i. in your corporate tax portion of the budget, you have a number of tax increases, including the elimination of oil and gas subsidies and so forth. does all of that additional revenue get used exclusively for lower corporate tax rates? you've in the past talked about a lower corporate tax rate of 20% and not 25% tax rate for manufacturing companies. i wonder why that was not included. >> there's nothing new in our tax proposal. what the president and our posture has been on corporate revenues is the following, we thinks there a significant number of unjustified tax expenditures and loopholes in our current tax code.

we think some of them do have negative impacts in terms of shifting to tax havens. and we have -- the president has put forward detailed proposals. the president believes those proposals could be used to lower our deficit or to help support more economically justifiable tax incentives. however, what he has said for the last couple of years, if there was a concertive effort, which requires the business community working together, bipartisan congressional action, to have historic comprehensive tax reform. that would lower rates, have a minimum tax on foreign earning that would discourage a race to

the bottom. if we were able to do that he would accept a revenue neutral tax reform proposal. so again, if that's not going to happen and we're going stay with the status quo, the president believes these measures should be eliminated. if we're in a status quo world, then they should contribute to the deficit. again, if there's a once in a generation moment to have comprehensive corporate tax reform that eliminates --

reduces loopholes, unnecessary incentives, tax haven behavior and lowers rate to make our tax code more competitive to help more jobs on our shores he's willing to do that in a revenue neutral way. that is our position for the last couple of years and this is still our position now. >> again, this comes under the nothing is new. the $40 billion of annual extenders that has to have gotten rid of or paid for through revenue neutral tax reform. >> the goal is still 28% for a corporate tax rate? >> that had s what we put forward. what is important to the president that it meets these principles. if somebody has something that is not going to hurt the deficit, that's going to be -- meet his goals, we're always open to other ideas. but we think 28%, 25% for manufacturing is a strong aspiration but if others have ideas how you could go further in a way that is pro-jobs and

does not hurt the deficit, of course, we're always willing to listen to other ideas. >> on change c.p.i. on the switch in the budget you say it will impact non-means programs. in addition to social security can you give us an example or a list of what some of those programs would be? how would you specifically protect the vulnerable populations in those programs? >> the means tested programs but not switch over to change c.p.i. -- would not swtitch over to change c.p.i. the entitlement program is a program that would have a -- >> veterans programs as well? >> the means tested veterans program is excluded. >> so pell grants -- >> that would be an example where the chain c.p.i. would not apply. >> would it apply to the adjusted minimum wage because you raise it to $9 but the president in the state of the

unit would be adjusted onward according to inflation. would it use the formula? >> we're hoping to have a strong bipartisan process to pass that. i think at this point we'll probably wait to have those discussions. the important thing for the president is to pass the minimum wage. he believes that nobody who works full time should raise their children in poverty. people have different formulas for that. what we want to see is that discussion get engaged. >> mark? >> bob --

>> i said mark. >> go ahead with mark from reuters. >> you said the total of revenue to increase for deficit reduction is $580 billion. how much total revenue increase for other programs that you're proposing, such as the early childhood program and so on? how much from the 28% cap and the buffet rule and so on that you applied to investments? >> so, as jeff said the budget offers -- keeps on the table the last offer to the speaker a compromised offer, which had $580 billion of revenue from high-income individuals.

we then put additional measures in our plan that could be -- that the boehner offer was not conditioned on but we thought would represent the balanced economic strategy that we've discussed. most of the times -- almost all of the times we have additional revenues beyond that are to pay for other tax relief. for example, we have a reserve one thing in our plan that is mentioned we talk about extending the additional five years the obama increases in the earned income tax credit, the child tax credit and the college tax relief. in doing that, we believe that should be part of the base line. so if people in negotiation accepted that was part of the base line that would not have to be paid for. but if somebody said they took a different view we put in $150

billion in a reserve that could help pay for them. that is revenue to be fiscally conservative and to say we believe in extending those important tax incentives. if people believe they should be paid for as opposed to being part of the base line, they are in our base line, i believe in the mcginnis group and others keep in the base line. those are in the reserve if needed. other revenues are for other tax cuts that we have going forward. the one place where we explicit raise for investment is what cecilia talked about that is the tobacco tax. we believe that additional revenue is justified for the positive that it serves in terms of early childhood and the deterrent effect it has on

smoking. >> if i could just have a follow-up. speaker boehner has criticized the administration for holding that hostage to raising revenues. if going to a chain c.p.i. a good way to rationalize entitlement program ebbs and it -- programs and if it would raise revenues why not handle that separately? >> he's willing to do it as part of the comprehensive $1.8 trillion deal that puts us on a sustainable path, gets us out of this pattern of manufactured crisis after manufactured crisis. this is part of a comprehensive package and it has these protections to protect the most vulnerable and older recipients of social security.

>> let me just add, several of us have been part of the bipartisan budget agreement, when you are having those kinds of agreement it takes give and take on both sides. you make a compromise and they say we'll just take that. that can't work -- it couldn't work the other way. if they said as part of your agreement we're willing to support your infrastructure plan but only if you did all the entitlement savings, we couldn't say thank you, we'll just take that. that is put on the table as part of a compromise. december 3, speaker boehner, eric cantor, wrote the president

a letter saying they were willing to do $800 billion in revenues if it followed the offer that the compromise that erskine bowles put out to the committee. senator mcconnell says if you have a deal with revenues, this was as recent as january 6 on "meet the press" one of the things they felt was needed for giving revenues was the c.p.i. so when they've gone to us and said this is one of the things you need to do for us to be willing to do a comprehensive package, obviously, it doesn't feel right. or it is not in the spirit of the bipartisan compromise to say if the president is willing to put that on the table, something