>> good morning, some of the headlines this sunday morning, nuclear exposure and unrest inside of iran and the detroit free press michigan budget crisis will be more dire in the next few years, and obama's likely decision not to close

guantanamo bay and worse numbers since tracked in 2000. the numbers on your screen are the lines for democrats and republicans and independents. front page of the washington post is focused on health care and the economy. with a feature on one street? maryland, and featured in the story is sarah armstrong whose husband is out of work and to lose health care in a week. and the story to focus is dealing with the economy and that job seekers seeking by a

record ratio, and despite that jobs are growing, but now see a bleak employment prospects. and keeping track of numbers back in 2000, 2.2 million open jobs and 14.5 million people laid off. and even though the numbers are slowing, and companies reluctant to add to their payroll. and there is reported increase ofó/ indii haveduals signing up

for rotc. and get to your phone calls and first we have from maryland, greg on the phone. caller: good morning, the numbers that they are reporting are tragic, first of all. and it's sad that the american people as a whole have allowed their politicians and corporations to outsource all of their jobs. and a problem with the rush limbaughs and sean hannity, they miss the direction of american people and others on scapegoats and while their own politicians have sold this country out. and instead of holding them accountable, they try to blame obama and others in this country. the fact that you have all of

these people out of work is correlation of outsourcing the jobs. host: greg, thanks are you are unemployed? caller: i am. host: we have next howard, from new jersey. caller: we do not need to continue stimulus because of the economy is better, it's contrary. host: next, you are on the "washington journal." caller: is this steve? >> yes, caller: the crux of the segment here, statistics, i am really curious, steve, as to the whole process.

host: the labor department began keeping track of job seekers versus employers to hire, and if you go look at this graph on the front page of the "new york times." the president is in caucus and back from the general assembly and from the pittsburgh summit and last night talked about he inherited in january of this year. and we will work on that audio, and we have robert from brooklyn next. caller: good morning, i will like to say that the democrats

are trying except for a few of the blue dogs, obama is doing his best and the people of this country are not helping, they really need to help. host: let me read more and the report is by peter goodwin from the times, and points out that for years the economy has been pointed out by consumers who spent in excess of their incomes. those sources of easy money have dried up and now tempered by saving, and optimism has been eclipsed by worry. next up is john from houston, good morning to you. john, are you with us? caller: yes, i was calling because i was wondering your opinion on the situation with the jobs going overseas.

and it seems like the economy or the business has gotten to the point where the employers don't expect anything from their employees. and the employees don't really do a great deal to make themselves more valuable to the company. so that these jobs which become routine are easily assimilated in other cultures. when it used to be that the objective of coming to america was not the american dream, it was the american opportunity. and we have seemed to lost that. host: thank you john, and here is the president last night. >> most recently we have been tested by an economic crisis unlike any we have seen since the great depression. i have to say that some folks seem to have forgotten how bad things when i took office.

[applause] they seem to be exercising some selective memory. so let's just take a stroll down memory lane. our economy was shedding 700,000 jobs every single month. more than the entire population of baltimore losing work every month. credit had dried up, loans from cars to college were impossible to come by. our entire financial system was poised on the fear of collapse, and many fearing of the great depression. host: the president last night and we will have more of that

discussion. and peter will be joining later in the program and he's a professor at john hopkins university, maryland, and next is george from st. petersburg, florida. caller: good morning c-span, i heard what the president said, but let's remember one thing. he may have inherited a bad situation, job wise, house, mortgage and everything. but if we went back to when this basically started, if we go back further during the jimmy carter years, we had double-digit unemployment and high interest rates, we had that and what reagan did and

stimulated the economy and through the bush years. and clinton inherited a good economy. and about when george bush started running, see a lot of jobs left, a lot of people started laying off and george bush came in and we hit 9/11, and we have a lot of job losses and home mortgages, and i look at this man, and when people voted for him, he promised the american public 3 million jobs. he hasn't done anything about that. had health care system, we can't afford it. it's a proven fact, we cannot

afford free health care. and everything is more -títo health care than our economy and our jobs. people are losing their homes. host: so george, what would you do? both sides on health care, say change needs to be made. and this disagreement is in the details. caller: what would i do? you can't bail people out that can't afford homes. and the cash for clunkers, i know for a fact, you can't bail banks out that made bad loans, and freddie mac and fannie mae and this industrial property and commercial property to hit.s is this another bailout? this country can't afford it.

we outsourced our jobs to china and indonesia and pakistan. and send them down to mexico, the crash of what is it, up in detroit. i worked up in cleveland union, and i tell you like this, if you didn't save money, that's your own problem. host: thank you george, and beyond fannie and freddie, the "l. a. times" writes that homeownership may be the american dream, but late has been an expensive one for tax credits, and the credits will add the stimulus bill $16 billion and nearly $100 billion they have little chance of recouping.

and mounting faults in the housing situation, and arguing that a rebound in sales is crucial to a recovering economy, and saying that there is reason for a proposal for a bill that one year would raise 18,000 to 15,000 making the revenues greater, and more in the "l. a. times" if you want to go to the website. next is steve. caller: hi, i have a solution that might help everything. what we do is tell all the industries in the country, if you offshore a percentage of your employees, you will be taxed on them. what the problem is there, you

don't regain anything in the tax revenues, so you tax them higher. and that will give the employer reason to hire people in this country. host: if you are just joining us, the story of job seekers outnumber to a 6:1 margin, and the death of the husband of congress women karen maloney, and he perished in an an expedition in china and she received word early friday morning. next call is from south orange, california, patricia, good morning. caller: good morning, i am calling from south orange, new

jersey. a lot of people looking for jobs are not ready for the job market in terms of education. and if we were -- obama is the education president, he's made ta clear. -- that clear. and a lot of people that come from other country -- countries are more educated than we are. and a lot of the jobs that only the elite can get. and that's a problem he's trying to solve, trying to make education not a privilege but a right for everyone. and he realizes that parents have to be very involved with their children's education. and that's something that is not happening in some ethnic groups. maybe they have to work long hours and don't have the

expertise to help their children along in school. once the crux of the problem with jobs, once we get that education piece solved, and it's not an easy solution, and once we get that solved where everyone can have access to the types of education that we need in order to move the country forward, then that would solve a lot of the job problems. host: thank you for the call, one thing we learned about justice sotomayor in her talks, and she's a yankee fan, and she threw out the first pitch, and threw it out and wearing a numberless yankee jersey, jeans and running shoes. if you want to learn more of the justices, part of supreme court week on c-span, our

90-minute documentary will run on sunday, october 24, and we will show a rare look inside of the chambers and court, we have a website for excerpts on the program, and hope you tune in starting sunday, october 24. nick has joined us on the republican line. caller: my comment is that i think that the last two callers sum up the problems we have in this country in a nutshell. you have a lot of people believing oh, yes, education is the key. if you lose your job, get smart and get a better job. not so.

the problem is that we allowed on both sides of the political aisle for jobs to get the only way to stop this competition for cheap wages which lows your standard of living is a border tax on the goods made, thank you. host: thank you for will call, and the front page of the "new york times" that job seekers exceed the openings by record ratio. our twitter site and one comment from perry, the great recession is not nearly over, where are the jobs and repairing roads and bridges,

why won't congress release the money. more from our president. >> the next time some folks come up and asking what the recovery act has done, you tell them it has prevented us from going into a much worse place. that much we know, that's been confirmed. but we also know we have a long way to go. that the progress we have made has been uneven. and this recession has hit communities of color with particular perosity. today more than 1-7 african-americans are out of work, and 2-10 and 3-10 african-americans children are in poverty. this has made the problems worse, but we all know these problems have been there for a long time.

communities were struggling to catch up long before this economic storm came ashore. host: and "the new york times" with more details to elaborate on the president's point, shrinking job opportunities have assailed virtually every city this year, since the end of 2008, job openings have diminished 47% in manufacturing, 37% in construction,and 22% in retail. back to your calls on this issue, daniel from michigan, good morning. caller: good morning sir, i would have to say the root of the evil is nafta, since that was passed, i have been through four plant closings. two major layoffs, and i am unemployed again, when you send jobs across the border and over

to china, that's our problem, i don't see it getting better. >> john feehery will be joining us, and maria cardona will be with us in about 10 minutes, and the take in the obama presidency. mark is joining us from pennsylvania, good morning, your take on the jobless situation. caller: good morning, i think it's totally predictable to be honest. anyone sitting around and thinking of this so-called stimulus will actually work. number one, like i said from the beginning, stimulus isn't going to work, because the money will wind up in state,

local governments for the most part, and democratic state and local governments, and it's not going to get to the people that need it. we need a major tax cut, take the rate from middle class from 25-50%, give them a 10% tax cut and take the rate to 10, that will generate income, you can't have a consumer society where the consumers have no money. this year alone my wife and i including insurance premiums, our medical bills are about $700 a month, and includes premiums. today it's food, shelter and health care.

if i got a tax cut of $500 a month to offset my health care cost, i could buy two g.m. cars with that. host: that's the feature on the front page, of one family and in maryland and how the health care debate is playing out, the armstrong family, he's out of work, and health care to end on october 1, they have two sons. caller: yeah. host: did you want to follow up on that? caller: that's what i am saying, unless you put money in the pockets of people or doing something for health care, this will go on and on. the wealthy have their tax cuts

and not expiring until the end of the next year, and middle class tax cuts get an extra 10 bucks per paycheck. give us money so we can spend it. host: thank you for your call, one talk on capitol hill is a consumer protection agency and joining us on c-span programming, here is an except from senator bachus. >> do you think we will see stimulation this year? >> yeah, i do, there is agreement among the american people and the majority of congress that we are not going to bailout individual companies, but to get the

taxpayer off the hook. and there is an agreement in congress to do a better job of protecting consumers. and we can't do it having eight or nine agencies doing a better job, because when everyone is in charge, no one is in charge. but you can't create an expertise and tell them to protect the consumer. >> newsmakers will air at 10 a.m., and from steve that says it's all about greed. manufacturers don't care about u.s. jobs, only cutting costs.

caller: to improve american comparativeness, we need to improve math skills, and we need to allow children to teach from science text books as the practice in japan. i am a theoretical physicist that drafted a bill that was presented in the house of representatives earlier this year. host: we have chuck joining us. caller: i would like to put forth that everyone type in the search engine g-20, we can't unoppose the policies, and this is direct against the 10th

amendment, everyone should watch out, it's getting bad. host: thank you, joe has this on the economy, at twitter.com, and maybe we should appeal the minimum wage law that would allow a lot of people to get back to work. and from bill, this is the beauty of capitalism, the workers, the tools of the economy. caller: i believe in the old saying, divided we fall, together we stand. most the people, there are so many people pulling against this president so bad, that's the reason why the stimulus is not working, and tried to cut it too bad.

and the president is trying to put it out there , when he put it out there, most of it would have been working if they would pull with him. and you see we can't get jobs devaluing, when you got all the republicans going against him and the protests against every he do. it seems like this country is not the united states. host: thank you for the call, and in "the washington post", this deadline is no deadline on troops. and the president has scheduled five meetings with this national security team, and tuesday to mark the discussions with the national security council and the regional

ambassadors on afghanistan and with a lengthy phone interview with to reall --- evaluate that effort and more on the program tonight. cindy, from minneapolis, good morning. you are on the air. caller: good morning, how are you guys doing today. i would have liked for you to read a little more about the story you are talking about on "new york times" today, the main thing is that in january, when the economy, everyone agrees it was pretty bad, and it would have been educational

for the viewers to kind of go back in history as to what happened in january. and then for us to respond to the article. i wasn't able to see the whole article about the job seekers. but the other thing i wanted to bring up was something that happened last sunday when you had frank long on your show, and there was an article on "the new york times" yesterday that talked about frank long in terms of the health care policy, he was the individual that did a lot of polling regarding that situation on the debt panel, and it would be nice near the c-span viewers to be educated on the partisan individual for the party and fox news, and c-span to my disappointment did not bring that up to the viewers.

i appreciate you letting me voice that opinion. host: we did discuss the fact he's a frequent contributor to fox news channel, a paid on air analysts and consultant, and you mentioned "the new york times" and focusing on cisco systems and back in the 90's, and they made internet equipment expand rapidly, and cisco is envisioning double rate growth and the chairman is saying that he is anticipating quote slow hiring given the vigors of the growth ahead and doing it selectively. our last call is dennis joining us from massachusetts.

good morning. caller: hello. my name is kenneth, good morning america. hey, i think that the stimulus package is a joke, and the republicans are a joke, and we should cast health care without their help. and should invest in america and the american people to work. we are carrying the bridges and roads and a new power grid for solar and wind turbine. we should have dona lot --- done a lot of things with that money. host: thank you for the call. next hour politics including new york politics and massachusetts and races in new jersey and virginia for governor, and we will have ruby joining us to talk about afghanistan and iraq and the

middle east and how the president will respond to general mcchrystal, and first we will look at what is discussed on sunday morning programs with bobbi jackson. >> iran and health care will be discussed today, the guest on "meet the press" will be new york governor, and virginia democrat jim webb, and on abc this week, the guest on fox news sunday includes senator chair diane feinstein, and face the nature, cbs will include

hillary clinton and state of defense for state of the union, will include two senators, you can listen to all five sunday programs starting noon at c-span radio, and you can hear us nationwide and on the web at c-span.org and find us at twitter. >> c-span supreme court week is just a week away, get an insiders view of people and places that make up the nations highest court. >> why is it that we have an elegant, astonishing beautiful opposing impressive structure? it's to remind us we have an important function, and to

remind the public when it sees the building of the importance and centrality of the law. >> c-span supreme court week starts sunday on c-span and offers more on the judicial system at c-spanclassroom.org. >> next week following a taped event judy shepherd, the mother of matthew shepard will take our calls live, and next is hugh hewitt, the author of 12 books and including his newest, live on c-span next weekend, book tv. "washington journal" continues. host: joining us in the roundtable is the forker

speaker of the house, dennis and let me begin with the headlines, and the drop in fund-raising, and the essence is that democratic committees have seen a decline this year, and washington post says that a fact of complacency, and the wealthy givers are put off by big business. guest: the reality is that a year after a presidential election, you see this drop in fund-raising, people are spent literally and emotionally. and i think that the recession has played a part in this, you not only see committees with

fund-raising problems, but those across the board. i think this year there are a lot of issues at hand and play that are making this a tough environment for democrats. and i think everybody to really raise money in. i don't think it's something that will be long-term, i think if people see successes of this administration, and this is an off year in election and people don't understand they have to continue to give. but they will understand that next year and as the next presidential starts gearing up. and people are waiting for that, that don't have unlimited funds. it's a natural phase and see that in politics all the time. >> john, is that the state? guest: what is fascinating how

money can be raised from wall street and now it's disapated. they were able to kill it on wall street. and now i think that wall street has decided these guys are not in our corner. and if you read that story, a couple of other interesting facts, that lobbyists are still giving to democrats and have not seen the shift. and out in the country, more are giving to the republicans, and that's up. and i think that speaks well for what will happen for republicans in the next election. fund-raising is a part of the campaign, without the money, you can't get your message out. and the fact that the democrats are showing some trouble, they may have some trouble electoralally.

host: a story shows that the republicans finding out their bright line and the clear differences of their candidate, robert mcdonald and the issue is taxes. guest: from a republican's standpoint it's better to be talking about taxes, and so for the republicans, this is a very positive sign. if we can keep on the tax message, .orthat means that mcdonald will have a better shot at winning. maria. guest: a lot of independent women are worried about what that means for a bob and donald administration and a lot don't know that they wrote this thesis. and the numbers will continue to shift in deeds' way, and

the more that people understand what they are, and they will understand this, and they were two popular governors. and the more people understand what this thesis means and this is the way that bob and donald would govern, this would go up in the polls. host: this is a regional story, and you google the story, and in essence he's talking about the traditional family values and the role of women in the workplace and home. guest: that's right, and it does give you a glimpse of the inner workings of bob mcdonald and what he believes to be the standard of governing. and it's w-xeasy to say, that w so many years ago and those are

things that i don't currently believe. but it gives voters pause into what would he do if he were governing virginia, what are the kinds of laws he would be pushing. what are the kinds of underlying messages of how he thinks that the role of women and family should play out. for a lot of independent women, those are scary of how he laid it out in his thesis. host: that was 20 years ago writing his thesis and not just a college student but about 30 years old. guest: and his daughter was in iraq and he said, i have changed my views, and they have

evolved. and they have and should have, and at the end the day, voters of virginia are not going to be worried about something that he wrote 30 years ago, but worried about taxes and the quality of life. and i think there will be a vote for or against president obama that will play a role in this election. and a lot of parts of the state where he thinks he will be strongest, i think that will help mcdonald. guest: steve, it -- the way we view these elections, we would love to win but i think republicans have to win in terms of prospects for the coming years. and these are difficult elections for incumbent governors and times of recession. i think that the atmosphere is very difficult for us. again we would like to win, but

i think that the republicans have to win in terms of their prospects. host: speaking of winning, mr. nice guy, writing about the andrew cuomo of that state, and his rebirth. guest: they want him to take over for govern pater son to step aside and for the races that republicans have a shot in. and that's why you saw the president say, mr. governor, step ahead. and all of this kind of internal debate speaks well of the politics. andrew cuomo is aggressive and

that's why ramen emanuel would rather see him there than paterson. guest: clearing the situation in new york is difficult, you will have people agree with what they think that the white house will do and trying to push paterson aside. paterson to his credit is saying he is not going to move, he will continue. he thinks there is a way to rehabilitate himself and you have to let the voters aside and let this play out. it may be that governor paterson can rehabilitate himself and what it points to that these are very difficult times, again, for incumbent governors, times of recession always are. but things are starting to get better from an economic

standpoint, and i hope that paterson if he decides to stay will use that. host: a senator sworn in on friday, and is a new senator, have you either followed massachusetts politics? guest: other than that democrats thought it was important and i agree to try to put someone in there as quick as possible. and to make sure that the will of massachusetts and all the fights on the national scale that democrats were taking on, that we were able to continue to have those fights request the full array of our senators. and i think that clearly this was senator kennedy's dying wish, and i think it reflects the will of massachusetts. i think it was a step forward to be able from a democratic

standpoint to have all of your arsenal full and ready to go to support president obama's agenda. host: so were the citizens wrong to change in 2004 when there was mitt romney. guest: well, when you talk about this, and people say well, it's massachusetts. and whether it's wrong, i believe it's the will of massachusetts. guest: complete ly -- critical they would change this and the fact that so many democrats didn't want to run for senator kennedy's seat. only one stepped up, mike kapalano, and i hear there is a

shot from massachusetts democrats that the senator's wife may be thinking about running. and there is hope that she would. and that would be interesting, and explain why a lot of democrats decided not to run, but if she doesn't, sound like mike has a shot. host: have you heard the same thing? guest: i have heard rumblings that she could have an interest in running and a lot of people hope she does, and trying to push her in that direction. i think that would be great for the state of massachusetts, and great to continue senate kennedy's legacy and for the country. host: would that explain why joe kennedy opted out of running? guest: i don't think they are related. i don't think that kennedy has close ties to hugo chavez, as a dictator in the western

hemisphere, and the fact that joe kennedy is one of his closest buddies, i don't think he will run soon. guest: i don't think it had anything to do with. host: you can send us a twitter, and the president talking about health care at the political black caucus. >> for the sake of every american, we must bring about a better health care system for this country. in not 10 years. not in five year, not in one year. we have been waiting for health reform since teddy roosevelt and since wjohnson an

nixon and clinton. we can't wait any longer, there comes a time when the cup of endurance runs over and a time to remember the urgency of now. now is the time to have insurance reform in the united states of america. now is the time to offer stability and security to americans who have insurance. now is the time to make it affordable for those who don't have health insurance. now is the time whto for ref. that's the kind of reform that we need.wcx host: sounded like a campaign 2008 event. guest: i happen to agree with the president, now is the time for health insurance reform, and get rid of existing conditions and to get health care for the american people.

and i think that republicans agree with that, and the question is how you get it done. i urge the president it start over with what he had and try to work with not one republican or two, but the republican leadership to find a way that the whole country can support health insurance reform in a way that does not bankrupt the problem, and i think that the 80% solution is a way. guest: i think john is right, we agree on 80%, and no reason to start over. and presidents have been talking about this for not just decades but generations, when

you have thousands losing health insurance everyday, you have to find a way for those who have insurance have security, and if they fall sick tomorrow, their health insurance policy won't just kick them off. if they have a pre-existing condition that's not a bar to them getting insurance. and for those who don't have insurance, there has to be a way to buy it on the open market without going broke. and those are the elements that the president has been focused from the beginning. i think we are focused on the 80%, where we agree. and have to make sure that the 20% of the rest make sure that are things that don't add to the deficit, that the president has said from the beginning.

and to make sure there is choice and competition. and there is none. host: background, maria car dona and has worked in the administration, and john feehery from marquette and notre dame, and working with the president of the coe group, we have linda from st. louis. caller: hello, i am from st. louis, i am an republican and thinking of running for something or cover, not sure. host: that's a good line, we will have to remember that. caller: yeah, anyway the sad thing, the democrats voted down

the $15,000 stimulus for all home buyers and has slowed down sales for homes. and those are short sales and bank loan sales, and that's what i deal with everyday. and these properties drop in value and affects you across the street and everyone around us. and with all of that money in the banks, only 2% has been modified. so banks not modifying the loans. and if the people are behind, the banks take less on a bank owned. and it doesn't help the people in the house, they get no loyalty, but the stranger across the street that buys the property steals it and it's wrong for america. guest: overall linda's point is clearly an economic one, and

what we see on the economy, and you eluded to it in past interviews before our show and past comments, there are certainly, there is a long way to go. there are people losing jobs, but you have to look when president obama came into office, the month he came in office there were more than 700,000, and now it's down to 200,000. that's clearly not something to be satisfied with and not until we gaining jobs. but we stopped the free fall. i am getting to linda's point. host: and from "the new york times" front page of the business section, and you dovetail into her point, the headline in this piece is called, enter the recessions waiting room. and the "new york times" pointing out that for every person looking for a job, there

are five others behind them. and so 6:1 of job seeks to employers. guest: that's right and we can't be satisfied, and president obama will be the first to tell you, until we turn this around and gaining 1 00,000 jobs a month, people on main street won't feel it. and as these things go and economists tell you, there are a lot of numbers that lead up to that point, and those numbers are going in the right direction. one of those numbers to linda's point is housing starts. you see positive numbers in the right direction in terms of people buying homes and getting into their first house and investing in the housing market. that's something we can all be

happy about, but it's not enough. we need to continue to work on job creation, that's something that this administration has focused on. it's what the recovery act is all about, and what president obama has focused since the day he came into this office, when he inherited the worse economy since the great depression. host: but linda saying, she will run for something or cover, the job situation is the same, and what does that mean for republicans? guest: first let me say, the clinton administration focused on jobs from the get-go. the obama administration has not focused on that, they have focused on a lot of different things. and the fascinating thing about the obama administration, when they talk about jobs, it's public sector jobs. if we have a jobless recovery

like it seems we are going to have, it will be bad news for the democrats, because i think that people will say, we want a job. we don't want all of this other stuff, we want you to focus on jobs. i think that the caller is motivated by this desire to serve in public office and run for 6]ñoffice, because she's so frustrated by what she sees as this lack of focus on job creation. and the obama administration has done some things that have hurt job creation, including more mandates on small business. the way we get out of this, is a focus on allowing small businesses to prosper. and that means less mandates and less government telling you how to work and more tax cuts geared to small business and

regulatory reform. just a couple of years ago i left my job and started my own small business. and the fascinating for me is how hard it is to deal with how many time with the regulations and taxes and w/úall the complicated things. it's a waste and for me it's more difficult to think about how to hire someone else, because i don't want to go through the paperwork and i think that happens in small businesses. and the obama's administration with a lack of focus and on small businesses and on mandating things on small business that kills jobs more. i think that the biggest threat to the obama administration andc democratic role is the jobless

problem. host: we have our guests and caller, good morning. caller: yeah, i can't mention that john mentioned calling the democrats hypocrites twice. my goodness these guys came in office with a balanced budget and only 5 trillion in debt and when thi left -- they left it was $10 trillion, and that's one thing to be hypocritical about, and we will be there at election day. these republicans are going down, they are not going to be many republicans left in the house or senate boy -- by the way they are acting. guest: if i can respond, chris has a good point, and a couple of things i wanted to respond to of what john said, we would have loved to have the luxury of just focusing on the

economy, but you know what? when president came in office he not only inherited the worse economy, but two wars abroad that were clearly not going in the right direction and a slew of other issues that are huge challenges for the united states. he didn't have any focus but to focus on these things that are clear priority for the country and american citizens of but that doesn't mean he's not focused on the job creation, and that's what the recovery act does, it stops the economy from a free-fall. you see economists from the o/ spectrum say that the recovery act is starting to work, and it helped pull our economy back from the brink of collapse.

and a lot of things what john is talking about, he is not taking into consideration what president obama was faced in office from the republicans over the last eight years, and the fact that tax breaks, and the way we were going, we were breaking these families backs and banks, and health care reform is a big piece of the economy. .

john the great fill guest: the great philosophical debate. people are extraordinarily frustrated and concerned, and angry about where this government is going and taking over so much and getting overly involved in taking over industries like the auto industry, the energy sector, the banking industry. this industry, that industry. there's a need for common sense regulation. i agree with that. i think that too often during

the bush administration, there was not enough common sense regulation. there should be more of that, especially when you come to the financial sector. that being said, i think that the political analyst, and why you see donations for people going up, is that people are concerned with this government takeover of the economy in ways that we've never seen before, and that's why you saw this outpouring of frustration, and i think it started with the bailout of wall street, which i think started during the bush administration, no doubt about that. but it came in with a stimulus package, which is a trillion dollars. people still haven't seen much in result of that. you saw with a cap and trade vote, where people were extraordinarily upset about their energy bills going up with that vote, the possibilities of that. then you see health care. that's why health care reform has been so difficult. had the president worked in a bipartisan way with republicans

on discreet packages, starting with health care, focused on small business, he would have been in a much stronger position. host: in case you missed it, i want to share with the audience one exchange from the senate finance committee. it began its mark-up of its version of the health care bill on tuesday, wrapped up on friday, back again next tuesday to continue its deliberations. the chairman of that committee is baucus of montana, jon kyl also on the committee. we'll watch just one exchange as they hammer out the details and get a response. >> the chairman is correct about one thing. he has not seen a massive g.o.p. alternative. there's one reason for that. we don't believe in a massive government takeover. that's a fundamental difference between what the mark is and what republicans are for. the mark says we can't do what we want to achieve unless we scrap a government takeover.

it is correct, you will not see a massive republican bill that tries to do anything like that. as i pointed out in my opening statement, what we believe in is a targeted approach. we have a problem of too much cost. let's target some solutions to that. i'll just note one example i gave. insurance costs too much, health care costs too much, let's see if we can reduce the costs. what's one of the cost drivers? well, i pointed out a study that -- mr. chairman, let me just complete my thought here. >> in about one minute, you'll complete your thought. >> i'll complete my thought and then make another point. mr. chairman, i am not delaying. i'm making an extremely important point. >> it's a very, very important point, but you're also delaying. >> mr. chairman -- >> complete your thought.

be courteous to others. >> it's courteous if you don't interrupt someone right in the middle of a sentence of an important point they're trying to make. i have not dominated this discussion, i have not filibustered in this market we've been having. i think everything i've said is directly point. i'm responding directly to a point you've made and i'll try to restate the point i was trying to make. >> wrap up the point, please. >> if our object here is to try to reduce the cost of health care, republicans believe we should directly target solutions to that. host: the senate finance committee meets again on tuesday, life on the c-span networks. we'll go to edward from rochester, new york. good morning on the republican line. caller: good morning. i'm an african-american and i'm a republican. i know there was a lot of talk about racism. i want to break up -- i want to bring up a couple things and see if you can respond.

as an african-american republican, i remember back when bush was running for office, there was an ad by the naacp, the ad was run, and it said about hate crimes, and during that ad, they said that if bush would have passed hate crime legislation, lewis berg would not have been killed. there was another one, kanye west, he said that bush hates black people. we didn't get any condemnation from the democrats about kanye west making those statements. surely didn't get any confirmation from democrats talking about the naacp ad. i think they wanted to run that ad because they were getting federal assistance. host: any of you familiar with this? guest: i am, and i do think the

caller makes a very good point. you should be free to sharply criticize the president and not be accused of being a racist. people sharply criticized george bush, many for good reasons. almost every president in our president has been sharply criticized. i think that there's undoubtedly -- race is always part of everything that america is about. we can't be naive about that, that we're in a post-racial era. that being said, when jimmy carter and others say that a lot of these people come and protest their taxes have a racial overtone, i don't think that actually helps the debate move forward. the fact of the matter is that we have -- president obama has shattered all kinds of history. he's kind of a new world here. i think one of the things we have to understand, that when

you sharply criticize him, you should be able to do so, because that's what america is all about. that being said, some of the more outrageous signs that were at these things shouldn't happen. you shouldn't call president obama hitler, but you shouldn't have done that with george bush either. and i think some of the other things that have been said about him are unfair and out of bounds. i do think that as we talk about civilty, which i think we'll get to at some point in time today, that the best thing we can have is if we can agree to disagree sometimes and have a civil debate, but we can also be very passionate about that debate. host: "we stand when the president enters the room. he has his own tune whenever he goes anywhere. the president is treated with royal respect, even though he's overtly not a royal" we don't

heckle the president. "ghost" i've told him in the green room that i completely agree with his piece. while we do have the right and should have the right and one of the greatest things we have in this country is the right of free speech, we should be able to criticize any president, but we should also do it in a respectful manner. there is a way to do that to be able to passionately convey what your point of view is without getting to the point of being a personal attack, and i think that's where the line has been crossed for both president bush and president obama. i think that's where when you cross that line, that is where the debate -- the high-minded debate on real issues facing this country goes out the window and it doesn't do anybody any good, republican, democrat, independent. nobody who is really looking for

solutions on how we move forward in the country on all of these many fronts that we're facing, critical juncture, on all of these many fronts, the kind of debate that is needed is definitely blurred and is not helped when you have fringes on both sides getting nasty, getting personal, getting uncivil. when in reality there is a way to have a civil debate in this country, and that that is something that president obama has always talked about, trying to change the tone in washington. i think it's probably a little bit more difficult than what he envisioned, because people are so passionate and sometimes they do cross that line. i think that it is something we all need to keep in mind when we are voicing our opinion, and especially when we're voicing our opinion to the point where we're criticizing the president. host: in the interest of full disclosure, we're not going to express an opinion on this program. but we would love to see. this you wrote about a question time similar to what we cover

every sunday evening from great britain with the president and members of congress, an idea that was floated back in the clinton administration, but never went anywhere. guest: it's because the executive and legislative branch are different here than they are in the british house of commons. the point of my piece was -- host: we should point it's available online at cnn.com. guest: we treat the president with exaggerated respect because he does not only represent his office, he respects all the united states. we go through all these rhetorical and traditional ways of showing our president. we stand up every time he comes into the room. he has his seal on the lectern. he doesn't just represent himself, he represents the entire united states. that's why he doesn't come to do question time, because he also represents a different branch, and he doesn't have to, accept invitation to get lam basted by

his colleagues. whazz in the british house of commons, that's kind of part of the job. from a c-span perspective, it's a beautiful thing to watch gordon brown get skewered by his colleagues because it makes for great theatre. host: they are actually in recess, but they'll be back next month. carla is joining us from massachusetts. with john feehery and maria cardona. go ahead with your question. caller: your statement about the state of massachusetts, well, it's massachusetts in regards to the replacement for kennedy. kennedy had not voted in 97% of the votes for this year. he should have stepped down long ago. we could have had a special election. and the people could have gotten someone in that they wanted instead of the democrats getting

someone in just so they could get the vote for health care, which we don't need health care reform, we need health insurance reform. guest: well, i think her last point is absolutely right. we need health insurance reform, and that's exactly what president obama has been talking about these last months and that's exactly what we're focused on getting, and frankly, being able to replace senator kennedy with a democratic vote will help us get that. i think that democrats will be unapologetic about that. and it was what senator kennedy's dying wish was. yes, he might have missed many votes, but i think everybody will understand the reason why. he was somebody whose legacy, i think, is uncontested. and i think that nobody will question his right to have been able to play out where his legacy was going, what he wanted to do with his own porks even in the midst of having this

life-threatening disease. i don't think anybody will question what he has done throughout his life to serve this country, to serve the people of massachusetts, and that he basically deserved being able to stay there and continue to represent the people of massachusetts the way that he has for years. john feehery can i jump in real quick? fascinating thing about this is that now that democrats once again have 60 votes in the senate and an overwhelming majority in the house, this real isn't about the republicans at all. it's about what the democrats can or can't do. this puts extraordinary pressure -- in the calt gary of be careful what you wish for. extraordinary pressure on the democrats. now they have absolutely no excuse if they can't deliver health care reform, and that is because they have all the votes that they need. the problem with the package as currently described, especially in the house, is that centrist democrats don't like it because it's not very good and it's going to cost too much and it's not going to fix a lot of the

problems. that's why you see all this going obviously this idea that republicans are obstructionists. they don't have the votes to be obstructionists. the fact that there's any kind of political act by the democratic leadership in the senate, they could pick off one or two republicans. they can't because they've overreached. and the reason they need republicans and why they should start over if they really want a bipartisan package is because that is better for the country. but i do think of the 60 vote thing as really one of those situations of be careful what you wish for because it may cause a few more problems. host: let me follow up on that point and segue into john feehery's piece in politico. he said the president is getting hit by the left and the right and that's going to cause problems for him next year. guest: in general? host: you're basically saying he's overreaching.

guest: i think george bush overreached in 2004 when he tried to get social security reform. i do think the last election, as marie ya will say, was a complete repudiation of the bush administration. i don't think it was a complete embrace for whatever barack obama's philosophy was. guest: i think the difference was the way that president bush governed is he basically did run things through, and he never participated in any sort of bipartisan anything and i know the republicans love to say that health care reform has not been bipartisan, but the matter -- the reality is that the bills that are being discussed right now have over 120 amendments that came from republicans. so it is absolutely bipartisan, a bipartisan bill or bills that are being debated.

in fact, one of the key elements that president obama continues to talk about, which is this health care exchange, is a republican idea. so what the democrats keep talking about is, ok, the republicans keep saying, we want to work with you. you haven't worked with us. you need to start over. this needs to be bipartisan. it has been bipartisan and it has had, again, more than 120 republican amendments have been accepted to the bills that are currently being debated. so, if we are accepting -- if the democrats are accepting republican amendments and then at the end of the day they vote no for this, then absolutely they can be labeled as an obstructionist party, because they are just talking and they are not doing anything to try to solve this country's problem. host: could anyone imagine george w. bush at a q&a prime minister question? seriously, george w. bush asked a question by any democrat? we'll go to atlanta. caller: good morning.

hello? host: yes, you're on the air, please go ahead. caller: my question is for the republican strategist. i'm a strong believer in action. how can you say that the republicans are onboard for health care reform when just in the last two weeks we've seen pictures of them asleep during these meetings. and you're saying that democrats are not doing the best job they can for health care. the last time we had a full republican government, and a president, they agreed to send us to two wars, raise taxes for the lower class, and cut taxes for the richesest, and yet the american people are suffering. guest: well, the caller is wrong, actually. when the bush administration was in power, they did expan medicare programs so that senior citizens, including many poor senior citizens, could get

better access to prescription drugs. they didn't raise taxes on the poor americans. most americans now, about 48% of americans, don't really pay any income taxes at all. that is because of the tax cuts of the bush administration. the bush administration didn't do everything right. i would disagree with maria, they did have some notable bipartisan accomplishments, medicare being one of them. the other being no child left behind, which is something senator kennedy strongly supported, the idea of getting more accountability in school. everyone talks about education, but you can't have education without accountability. you can't have accountability unless you really put the strict requirements that people teach better. without a good education system, we as a country are not going to be able to compete. that's one of our big problems right now. host: quick thing this morning. mark points out that the resignation of governor martinez is a nuisance, and then he

points out that the primary will be next year. there are four million registered republicans in the state. it's a close primary. that 450,000 votes may win it. how serious is a threat of marco rubio to governor kris? >> when that race started playing out, the one thing that i heard is that the hispanic community was up in arms because the republican party had basically cast marco rubio aside and basically said that he's going aside. i applaud marco rubio for saying it. i think latinos are right to be angry because you hear republicans talking all the time about how they need to reach out more to this growing and increasingly influential community. but, again, as it has been for

the past 20 years, it's just talk and no action. host: are you following the race? guest: full disclosure. my wife used to work for charlie crist and now works for the new senator for florida. so i'm going to be a bit biased here. i do think that he's going to win the primary and the election. i think the democrats sense that too which is why they haven't put up a top tier candidate. to maria's point about reaching out to the hispanic community, obviously it's extraordinarily important that they do so. i actually have great respect and admiration for senator martinez who is a friend of the family and a wonderful guy. i know he was a little bit frustrated with our outreach efforts. when it comes to the immigration debate, for example, we have to be able to make our thoughts completely clear on that in a

way that can garner support in all communities, including the hispanic community, and one of the things that chairman steele is trying to do is find ways to get more support in the hispanic community. if we don't, the long-term prospects are not very good. host: another comment now aimed at the democrats saying if congress did have question time, would obama be allowed to bring his brain, a.k.a., his teleprompter with him? we'll go to tracy. join the conversation, twitter.com. go ahead, tracy, from west palm beach florida. caller: when they're always talking about choice in competition, why aren't the republicans suggestion about opening up state lines thoroughly debated in terms of removing those antitrust laws that keep it so that even though there's like 1,200 insurance companies that we could be -- the way the phone companies, the

way at&t broke up and the rates went down dramatically because of the competition, we could do the same thing with insurance. when joe wilson yelled out "you lie," although it was very disrespectful and shocking, it seemed to open the debate that republicans put forth amendments again and again to require verification of illegal immigrants, and they refused it almost on purpose because they want the illegal immigrants to get free health care. guest: first of all, let me take the last piece first. the issue about undocumented immigrants and coverage, joe wilson was absolutely wrong, and the way that he heckled president obama, we already talked about it a little bit, but in the substance of it. there's absolutely nothing in this bill that would give coverage to undocumented immigrants. and republicans and conservatives keep talking about the need for there to be a verification, because if we don't have that verification,

than undocumented immigrants are going to be knocking down the doors to a public option, if one ends up existing, for them to get health coverage. if they really believe that, they have never met an undocumented immigrant in their life. they don't know anybody who is undocumented. if you are an undocumented immigrant, you do not walk into a government office, you do not walk into someplace where you think you're going to be able -- where you're going to have to present papers, where you're going to have to talk about who you are and where you live. the undocumented population lives scared to death in this country. so that's why i think this verification process, first of all, is unneeded, because you will never have an undocumented immigrant trying to get something that they know they are not entitled to, and secondly, there are a lot of american -- a lot of u.s.-born citizens who do not have a birth certificate, who do not have any

form of government documentation or i.d. who will not be able to get this insurance, and they're the ones who will need it the most. i mean, poor people a lot of the time do not have a birth certificate and have no way or have never gone through the process and don't even understand what the process is in order to get a government i.d. so that's going to be thousands and thousands of people that we are going to basically be saying, sorry. host: let me just ask you to respond to sheryl silver's piece this morning in "the new york times." taking health care up a notch. she talks about two different groups, the policy group being headed by nancy deparra and the political group run by jim mussina who is working as one of the chief go-to people to make sure that members who have questions about the bill, those questions can be answered. is this unusual? guest: it's not. i used to work in the majority whips office, back when we had the majority. and you need the policy and you

need the politics when you're trying to whip a vote. the most important thing that a whip operation does is gather information. by gathering information, the story talks about how susan collins had dinner with peter orzag. the part of this is the charm offensive, which i think robin manuel is trying to get some charm. the policy sibling obviously very important, but politics is not just about policy, it's also about personality and the connection and trust. i think with what the obama administration is trying to do is trying to grow if vote, as tom delay used to say, now the dancer tom delay. and by growing the vote, that means getting as much information as possible by doing the charge by trying to find out the concerns of all the members are, and i think that's what you see in this story. host: jim has our last call from fall river, massachusetts. good morning, independent line.

caller: yes. i have a question about -- or a comment to make about the illegal immigrants that were working. i broke in on the business and found over 200 undocumented workers. they had false identifications. they had fake social security numbers. but they were able to purchase at a store across the street from the factory that they were working at. they were working in this factory, making government back tax for the soldiers. when they were arrested, all the political people there got involved. congressman frank and john

kerry, because some of the workers had children that were being watched by relatives. guest: i think the problem here is what this caller is talking about, and what the last caller was talking about, the issue was the undocumented population really points to a desperate need for comprehensive immigration reform in this country. it is something that the obama administration has been talking about for a long time. they are focused on it. there are a lot of other things on their plate. but it is something they have been talking about. it is a priority. it is, i think something that our nation has got to focus on. there clearly is a broken immigration system in this country and it is hurting not just the undocumented population in this country, but all american families i think are hurt by this. when you have u.s.-born children and immigrant mothers and fathers who may not be able -- who may not come home that day

because of the raid that the caller is talking about, i think that the focus rightly so needs to be on enforcement and has been, but there also has got to be a focus on how we make sure that the undocumented population, especially those who have been here for a very long time, and who have paid taxes, and it's something i think a lot of people understand, they do pay taxes, they have contributed a lot to this country. we need to find a way to legitimize that population and to figure out what the future flow is. the crux of the immigration debate has to focus on the disparities on the economies between the united states and all of the other countries from whom we receive immigrants. host: last question. just quick reaction to the story in "the new york times," whether or not the president should travel to copenhagen next weekend as the olympic committee decides whether chicago would get the bid. madrid, rio, and tokyo also in

contention. if you were advising him, what would you say? guest: well, i'm from chicago. i think the olympics should be in chicago. i think it's probably smart for the president to send his wife. with all the other things going on, no matter how much i want the olympics in chicago, i think for the president to take a trip to copenhagen right now would be seen as a distraction and counterproductive to trying to get the job done. host: if he goes and they don't select chicago, is that part of the equation? guest: i think it will certainly be part of the equation in terms of whether they decide to have him go or not. i agree. i think there are so many issues on this president's plate right now that focusing on this probably is not the right public perception that you want right now. he's focused on so many other things and that's what he needs to get done. host: we have gone a full hour without talking about the other event at the united nations, the 64th general assembly.

last night, "saturday night live" taking aim at this network and the speech by kadafi. here's an excerpt. >> we now return to our coverage where gadhafi is returning to the elect earn to address criticism of his speech. >> hello. i am here today to apologize for my speech on wednesday that was so long and rambling and it didn't make any sense. i watched the tape of it and i was like, who is that guy? but allow me to explain. as i mentioned in my speech wednesday, i am suffering from extreme jet lag. just to explain the scope of this jet lag, my home in libya is six hours ahead of new york. six. can you imagine it? it is 9:00 a.m. here, it is 3:00

p.m. there. it is 1:00 p.m. there, it is 7:00 p.m. there. i could go on, but i believe you get the picture. 4:00 p.m., 10:00 p.m. that's another example. no man who is six hours away from where his natural body clock is telling him where he is can be held to account for his words or actions. in his lunchtime here, i want dinner. this is no way to live. on top of this jet lag, i have also been having problems with my giant tent. for those of you who do not know, when i travel, i have a large tent that i like to bring with me. for this, i am scorned as some kind of weirdo. despite my high diplomatic station, my tent and i were turned away by central park, and worst of all, inglewood, new jersey.

imagine me, the world's longest serving leader agreing to stay in englewood, new jersey, as a last resort, only to be told englewood did not want me. host: we should point out that "the new york post" indicated this translator actually did collapse during the length of his speech. guest: you had him, you had chavez, ahmadinejad, you had this collection of crazies that -- it's fascinating. guest: the "saturday night live" skit was hilarious. but i think underlying that was a very serious meeting where regardless, yes, a lot of rambling speeches from dictators around the world, the issue of iran i think really rose to highest scale, and i think you're seeing a lot of people really understanding what kind of threat this is and hopefully moving forward. we'll do what needs to be done. host: maria cardona, democratic strategist.

john feehery, republican strategist. will you come back again? guest: absolutely. guest: thank you, steve. host: trudy rubin will be here. we also talk about the missile test by the iranian government. we'll have more on that in just a moment. first a look at other events of this week as viewed by leading editorial cartoonists from around the country. we'll be back in a moment.

>> c-span extreme court week is just a week away, featuring personal interviews with each of the currently serving and retired supreme court justices. get an insider's view of the people and places that make up the nation's highest court. >> why is it that we have an elegant, astonishingly beautiful imposing impressive structure? it's to remind us that we have an important function and to remind the public when it sees the building of the importance

and the centralty of the law. >> supreme court week starts sunday, october 4, on c-span. to complement our original production, c-span offers teachers free resources on the judicial system at c-spanclassroom.org. >> next saturday, the meaning of matthew, my son's murder and a world transformed, judy shepard, the mother of matthew shepard will take your calls live in our studio. next sunday, three hours in-depth with talk radio host and townhall.com blogger hugh hewitt. he's the author of 12 books including his latest, "g.o.p. 5.0: republican renewal under president obama." live next week on c-span's "book tv." >> "washington journal" continues. host: our topics include iran, afghanistan, and pakistan. joining us from philadelphia is longtime columnist for the "philadelphia inquirer," trudy rubin. good morning.

thanks very much for being with us. guest: you're very welcome. host: let me begin with some of the news of the morning, as the associated press confirming and cbs radio and others that iran today successfully test firing some short-range missiles during military drills on sunday. this coming after the confirmation of a second nuclear facility in iran. what does this mean? guest: well, it's actually probably a lucky break for president obama because he has just shifted plans for installing parts for missile defenses in europe from a long-range missile defense plan where components would be installed in poland and the czech republic to something that would focus more on short and media range missiles from iran because he said that was a more urgent necessity. so it's almost as if the iranians want to confirm what obama just did. but it's also in your face. i think the iranians are trying

to indicate that you can't stop us. we've already gone ahead with our technology. we can do what we want. even as they say that their nuclear program is strictly for peaceful energy purposes and not for weapons. host: your piece this morning in the current section of the "philadelphia inquirer," also available online. you posed this question. where is a push for more global cooperation essential and where is it oversold? what's the essence of that question? question question when president obama -- guest: when president obama appeared at the united nations, his whole emphasis was on the concept where we are in a new world where cooperation is essential in a globalized world where you have economic crises that just swing around the world in terms of currency flows and trade issues, and when you have global warming as a major crisis

internationally and you have to have cooperation, what he was trying to say is the united states can't do it alone. all of you have to step up to the plate. he kept talking about your responsibilities, and we must do this and so forth. the problem is that on a lot of these issues, you have groups of countries getting together, but as we all know, when we've taken part in groups that tried to make decisions by committee, in the end, it's usually one or two people that provide the imp tess -- impetus, how do you get the consensus? i think that's the issue that i was raising. it's very well to recognize the reality that the united states is no longer the sole super power, but then there's nobody coming up behind the united states. and so, in effect, instead of being in a unipolar world, we're

in a non-polar world where nobody is the 800-pound gorilla. in theory the u.s. is the most powerful. in practice, we're economically hurting, and we don't want to play that role by ourselves. so you have to be realistic about what cooperation can gain. in some cases, in the case of dealing with iran, cooperation is essential. but in the end, it's going to be the way the u.s. handles its allies and whether the u.s. can convince them russia, china, for example, in sanctions against iran. somebody is going to be having to make them have that big push to get many pieces of a cooperative world to function, and it won't always work. host: as you indicated, trudy rubin, it was a pre-scheduled, pre-arranged meeting in switter land with u.s. negotiators and

members of the iranian government. but over the weekend, the israeli media quoting their prime minister saying that if this president isn't tough on sanctions, the israeli government reserves the right to use missile strikes against iran. guest: i think that israel is taking advantage of the fact that you had this seemingly shocking revelation that the iranians have a second nuclear enrichment facility that they had been keeping secret until this week. this is a very complicated story, because in reality, u.s. intelligence was on to this for some time, but didn't make it public, and in the last few months, they were apparently gathering more data. the obama administration didn't want to come out with accusations and then be proved over-hyperactive. they didn't want to do another iraq on intelligence, is what u.s. officials say. they wanted to be sure.

then iran found out that the u.s. was on to this, so they made the announcement. and then obama came out with this at the united nations. the bottom line is that israel sees that there's this additional facility, which means that iran may be moving more quickly towards nuclear capability, and they are trying to stiffen obama's and the europeans' backbone by making this threat. in other words, if you can't get your act together, europe, u.s., china, and russia, after this revelation, then we're going to take care of things. that doesn't mean that they will. it's just trying to galvanize movement towards tougher sanctions, i believe. host: we have obtained a copy that bob woodward reported on earlier this week, the recommendations being put for by general stanley mccrystal. it's called the commander's initial assessment. it's based on part of what president obama is now

reviewing. the story this morning that the president will begin a series of five meetings as early as tuesday to look at his options. trudy rubin, let me just read part of what general mccrystal writes about in his recommendation to the president. he says, "this is a different kind of fight. we must conduct classive counterinsurgency operations in an environment that is uniquely complex. three regional insurgencies have intersected with a dynamic blend of local power struggles in a country damaged by 30 years of conflict. this makes for a situation that defies simple solutions or quick fixes." as you know, he's recommending as many as 40,000 additional troops on the ground in afghanistan. guest: yes. i have been reading this, too. it's a serious read here. the problem that obama faces is that as mccrystal knows very well, there are no good options.

there has been the suggest by vice president biden that we focus more on just going after al qaeda terrorists with special forces and with predator missiles. this sounds great. since al qaeda is the objective, the president has said that's what we're trying to get at, and as biden points out, al qaeda is based in pakistan just on the other side of afghan border. the problem with that is when you go after a counterterrorism strategy strictly, what's going to happen is that probably afghanistan will fall to the taliban. if the united states started pulling out troops from afghanistan, many tribal groups and areas in afghanistan who are sitting on the fence now would decide that they could not stand up against the taliban and you probably would have a situation where the taliban would take

over. you would not have the basing infrastructure, which is what mccrystal and general petraeus say. if you lost a lot of the taliban to afghanistan, you wouldn't have the intelligence on the ground to do that kind of strategy. many of the predators that we fire at al qaeda in pakistan, we are firing from afghanistan. and further more, and this is the reason it's so complicated, it's hard for obama to explain it to public, especially in the middle of a health care struggle, but further more, the pakistanis are also sitting on the fence. if they thought that we were leaving and mccrystal emphasizes this. if all sides have no confidence that the united states is staying, then pakistan starts behaving differently. they may support a taliban takeover in afghanistan because they know the taliban, they

trained them years ago, and they are afraid of indian influence in afghanistan and they think the taliban would stand against india. so you would probably have a situation of collapse in afghanistan. you don't know where that would lead. on the other hand, as mccrystal points out, putting more troops in is a long, hard slog, and obama is losing the support within his own party and within the public for that option. host: our guest is trudy rubin, foreign affairs columnist for the "philadelphia inquirer." her reporting and her opinion this morning in the "philadelphia inquirer" and the reporting of peter baker and elizabeth miller on the front page of "the new york times." the headline is the afghanistan plan is splitting advisors, including meetings that the president had with general colon powell, former secretary of state in the bush administration. we'll get to your phone calls. tim, from alexandria, virginia.

good morning. caller: thank you for taking my call. you can go to -- host: we'll go to jim. caller: it's clear that their lying about their nuclear program and they are driving for nuclear weapons. i really hesitate about this idea of bombing, because i think the consequence of that are not good for the world economy, but i'm coming around to the point that maybe we do need to have strikes on those facilities or else iranians are going to end up with a bomb. the way they're lying about it, you almost think that they would be willing to use them. guest: i think the possible outcomes of a military strike are so doubtful and inconclusive that you find in the u.s. military, there is great reluctance to go down this

route. secretary gates has said that if military force were used, it probably would only postpone the development of bomb potential. most experts don't really think that iran wants to actually test the weapon, because that would expose them out in the open. they think that iran wants to have the capabilities, the breakout capability, which would prevent anyone from attacking them, just like nobody will attack north korea now because they know that they have the weapons. so the consequences of the military strike, if you start calculating them, especially in the persian gulf where so much oil flows through to us, to europe, iran could close the gulf, iran could make things very difficult for the united states in iraq, afghanistan, could make things difficult for israel, more difficult with israel with helping hamas and

hezbollah. if the result of a strike were only to push back the development of capacity two to three years, it just -- it seems like enormous incall cueable risk without the commensurate success story. host: one point from general mccrystal's report. by the way, he is going to appear on "60 minutes" this evening. host: joseph is joining us from silver spring, maryland. good morning. caller: i'd like to know, why is it the united states never pressures or even acknowledges israel's arsenal or stockpile of w.m.d.'s and its destabilizing effect on the middle east situation? and further, why does the u.s. never even pressure israel to

subject itself to iaea supervision? thank you. guest: well, i can't speak for the u.s. government, but i think there is a general recognition that so long as most of the countries of the arab world still do not have relations with israel, still do not formally recognize the existence of the state, and so long as you have a country such as iran that -- whose leaders constantly talk about the need for israel to disappear, that israel's program is in self-defense. i think that there also is the feeling that if israel's program were made public, that might be the justification for arab countries thinking they needed to acquire nuclear weapons, officially that it would lead to proliferation, whereas in reality, i think most of the arab world understands israel is

never going to use weapons first because it would be a disaster. it's a small country in a small region. and i think there's a lot of cant and dishonest talk. for example, iran will now bring up the issue of israel's nuclear weapons, but the reason iran is getting weapons is not to protect itself against israel. it's to expand its power reach in the region, because there would be no reason for israel to ever use a weapon, a nuclear weapon, first against iran. unless you were in an a nuclear con efron taking where another country was about to strike with nuclear weapons against israel. and the only country that has talked in that language, although not exactly of striking with a weapon, but of israel being wiped off the face of the map, is iran. host: our next call is from san antonio. mark is on the phone with trudy rubin of "the philadelphia

inquirer." go, mark. >> good morning. couple of comments. i don't think sanctions will ever work with iran. they'll end up just furthering their nuclear program while shipping oil out the back door. i think israel should strike and destroy the program's center so that even if it only gives them two or three years, i mean, it needs to be done. iran cannot ever get the bomb. as far as afghanistan, we definitely need to put more troops in there. we need to stay in there for the long haul. otherwise, the taliban will take it back over and al qaeda will have afghanistan all over again. but we definitely have to take care of iran. they're just going to lie and lie and lie until they get their bomb. guest: as i mentioned before, i think the question is what is in

the u.s. strategic interest. the u.s. is engaged right now still in iraq with major troop levels, and iraq is far from settled, even though we're pulling back. in afghanistan, if we go forward with the strategy that mccrystal has recommended, we are going to be tremendously engaged there. a strike, a military strike on iran against a program that probably wouldn't be operational for 10 years, and that would only delay a nonexiss about the program for a couple of years but would precipitate a situation where the strait could be closed, oil prices could skyrocket on a global economy that is just beginning to emerge from near disaster, at a time when we are engaged in two other wars i think would be disastrous for the united states and for its efforts overseas, especially with al qaeda and associated groups, and i think it could

have a tremendously negative effect inside pakistan. you have to remember that pakistan is a country that already has nuclear weapons and one of the reasons -- one main argument for strengthening troop levels in afghanistan is because if the taliban takeover in afghanistan, it could blow back into pakistan which has boast terrorists and nukes. if we are focused on a country that has terrorists and nukes, and two countries together, which affects pakistan. afghanistan and pakistan. then to get sidetracked in a war situation where iran, to attack facilities which could be replicated, built back underground, where there may be other secret facilities that we don't know about, i think would be tremendously foolish at this particular time. and i think the u.s. military feels that way very strongly. so i think the way we're going

to be going is probably do you think a sanctions route with the hope that internal developments will convince iranians that they have to look outward and will perhaps reach the post-ahmadinejad era and iran's supreme leader will dts to go on a different track. if not, i think we're probably going to be going down a containment root with iran. that leaves out the question of what israel will do. i find it hard to believe that israel could strike without a u.s. green light. it needs to fly over iraq. but bottom line, one has to think very, very seriously before undertaking military action against iran where the results might be minimal and the consequences might be terrific. host: israel has a history of hitting iran back in 1991 and hitting syria in 2007. guest: right. but what israel did in 1981 in iraq was very different. iraq had an above-ground

plutonium reactor, a facility that was already capable of manufacturing missile material for a bomb, in which you could take out this one facility and basically just about kill the program. iran has a different kind of a program. it is enriching uranium. and these enrichment sites can be small. they can be underground. the reason there's so much concern about this new secret underground site is because you could produce enough material in a year for a bomb and then you could keep recycling it until you got it up to weapons grade strength. that can be done secretly in a small facility. so you could hit what you know and there could be other small facilities underground built into ploun takens. you -- into mountains. you wouldn't get the whole program. since iran has the knowledge of how to build these enrichment facilities, they could build one up. it is a much easier and less

visible procedure than building an above-ground reactor that produces plutonium. host: if you've just joined us or if you're listening on c-span radio, our conversation is with trudy rubin. she's a graduate of smith college. she's the author of a number of books including "willful blindness: the bush administration and iraq." she's been covering foreign policy issues for the last 30 years before joining the "philadelphia inquirer," she wrote for the christian science monitor. we have a tweet comment from a viewer that says iran is playing rope-a-dope with obama. duffer sanctions? who cares? to the republican line, good morning. caller: thank you for taking my call. i'm kind of with the other caller. i remember campaigning, president obama was saying that be iran was a small country. like he had no fear of them.

yet he has yet to put the military on the table to show our force. as the greatest military force in the world, supposedly, does he think that threat won't work anymore? guest: obama constantly says all options are on the table, but he is trying a different strategy. i think that it makes sense to do that. what he's trying to do is get unity against the major players in the world, the five permanent members of the security council plus germany, who are engaged in negotiations with iran. he's trying to build up global support. the idea of another unilateral american war or a unilateral american israeli war would undercut everything we are trying to do in the muslim world. it would undercut the fight

against al qaeda and jihadists, not only in afghanistan and pakistan, which does have nuclear weapons, but elsewhere globally. so he's trying to corral iran. in fact, this discovery has helped him to try to create an international consensus that iran is breaking the rules. iran does pay attention to that. iran tries to act as if it is the country that is acting legally and seeking justice for the rest of the world. he's trying to pierce that image. i think that's important. and i think it is important to go for sanctions first and try to isolate iran. the careless talk about military action just doesn't consider that the military in this country is against this action, not because we couldn't go in and bahama iran, but because it would not achieve the objective and it would undercut our

objectives, important objectives in pakistan, afghanistan, and elsewhere in the world. host: let me segue back into the issue of troops, whether to send additional forces into afghanistan. from "the new york times" this morning, the debate now going on inside the west wing viewed as more dubious of the call for more troops. ram ram, and -- ram ram, -- rahm emanuel. can you give some discussion of what the discussion will be like as the president begins a series of meetings on tuesday on this? >> i think it revolves around whether certain people in the white house have other considerations. one is domestic politics. obviously that would be a consideration for rahm emanuel. the fear that obama, like lyndon johnson, will lose his domestic

program because he loses his political capital by fighting an unpopular war. biden is said to be very concerned about pakistan and thinks we should focus there primarily. i think that this is taking the eye off the ball. you can't focus on pakistan without also focusing on afghanistan, and i think think if afghanistan goes down, that will blow back on pakistan, weaken the government there, which is set by jihaddists who want to get their hands on the nuclear weapons that pakistan has. pakistan is the most dangerous country in the world, not iran, which doesn't have weapons and is still a distance from getting them and might never even test. so i think there's a mistake in focus. and the debate has an air of unreality to me, because the alternative to sending more troops -- and i understand how hard it will be to do that and how difficult mccrystal's strategy would be. but the alternatives are very

unrealistic. there are those in the white house who say -- and senator carl levin also says this. influential democratic chairman of the armed services committee. that we should focus on training afghan troops and some also say quietly we should negotiate with the taliban. well, these two points are correct. but what you can't do -- and mccrystal makes this very clear in his report. you can't train up the afghan army to take over the way we dead with the iraqis. you can't do it in the my of the situation where the taliban are on the offensive and are winning because you can't send an untested afghan army in. they will fall apart as the iraqi army did when we sent them in too soon. you have to partner with them and mentor with them. that's what he talks about. i saw that happening in iraq where u.s. units partnered together with iraqis so the regis and kellies are trained -- i'm sorry, in this case, it

would be the afghans. the afghans are trabed up by fighting alongside the americans. they have confidence in them that they won't be left in the lurch. in addition, some people say, oh, let the tribes fight against the jihaddists. again, tribal elders are frightened. i saw the same thing in iraq. if the americans stand behind them, give them some support, you may see tribal groups turning against the taliban. a combination of training you have the afghans, helping tribal groups turn against the jihad yists, but you need the americans there. and what mccrystal talks about is the loss of confidence. if the afghans think we are leaving, the weans think we are leaving, then they decide that there's no choice left but to let the taliban take over. they would be frightened to turn against them. they wouldn't have the forces trained up. if you want to negotiate with the taliban, mccrystal bhakes this point. general pa tray yass has --

general petraeus has made this point. if the taliban think they are winning, they don't need to negotiate. what mccrystal is proposing is an iraq-type strategy, where for the next two, three, four years you protect the population while you train up the afghan army and then you can begin holding negotiations with the taliban who see that they can't win by force and some of them will peel off and join the government. i think it's a realistic strategy on paper. it's going to be very difficult. afghanistan is more complicated than iraq. but the argument within the white house to me has an air of unreality because either it's promoting strategies that can't work or it's focused on domestic politics and that's a choice obama will have to make. does he decide to let afghanistan go hang in his desire to push a domestic agenda, which heties he'll lose if he gets enmeshed in an

increasingly unpopular war. host: we're talking about afghanistan, pakistan, the middle east, and on iran this tweet comment, why not have iran have nuclear weapons? we're hardly the best example of not having them. we've even used them. we're joaned from pennsylvania. good morning. caller: good morning. it's an honor to talk to trudy rubin. i met you once at a party at betsies a couple years back. anyway, you make us proud writing for the "inquirer "and we read your column all the time. guest: thank you. caller: however, our troops don't usually learn the language of these places where they're occupying like afghanistan and iraq. they did go in with a lot of guns and bombs. we are perceived often by the time of the country as a problem. maybe even as something for the

taliban to recruit terrorists because of our presence there. i'm concerned about israel having bombs. i'm concerned about us having bombs. you talk about global warming, what is worse for global warming than having a war? maybe we should be there helping them bond with us, but we're only taking one side of maybe many sides of the argument over there. so i'm concerned about our military sending the wrong message. maybe we're not torturing anymore. maybe this is the new fine american military, but still it takes a lot of our budge elt and causes a -- budget and causes a lot of bad feeling in the world. host: thank you for the call. guest: i think the caller made some very important points. would the u.s. military be part of the problem, not part of the solution in afghanistan? clearly in the first years in iraq, the u.s. military often

was blundering and causing people to join the resess answer the. one thing that mccrystal is tremendously aware of, if you read this report, the military learned the lesson of iraq. general david petraeus, general mccrystal, they are totally focused on trying to create a totally different patent of behavior for the u.s. military, even at the risk of taking more casualties. mccrystal talked about this over and over again, and i saw the turnaround in iraq. mccrystal emphasizes that if it's a choice between risking collateral damage if a u.s. unit is going after the taliban, if you're afraid if you call in bombing strikes in support you're going kill more civilians than you're going kill taliban, you don't do it. in fact, that may cause more u.s. casualties. but his strategy is to protect

the population and convince the population there's a reason for the u.s. being there. there also is a much greater focus on getting aid into areas that are hard-hit, so people in afghan villages won't feel they have to join the taliban for jobs. you also have to consider that in poll after poll in gap, the afghans don't like the taliban, so it is not that they are turning to the taliban in large part because the group is popular or the different segments of that group, they learned what it was like to live under taliban rule, which was much hasher version of islam than most afghans were used to, so it is not that they want the taliban. it is simply that their government is not delivering services and that they don't see the u.s. presence as delivering anything good. mccrystal is trying to shift the way the u.s. military operates so they are supporting villages, not alienating them.

this is a huge task. but i think he's very, very aware of the issues that the caller raised. host: if you're interested in reading more of the works in the regular column by trudy rubin, you can log on the website. it's philly.com/true dirubin. eric is joining us from indiana. good morning. caller: good morning. i read an article called "us or them in afghanistan" by a lady named ann jones. and she's been in afghanistan helping with women's causes there since the beginning. and she writes about, you know -- supposedly there is an army of afghanis that's 90,000 strong. i guess a bunch of marines and nato forces moved in to someplace and started to fight against either the taliban or the warlords who controlled that

area. she said they moved in with only 600 afghanis, and she said the main question we've got to ask is where is this army of 90,000? guest: yes. the army of 90,000 -- have i been cut off? host: no, you're here. guest: ok. the army of 90,000, a large chunk of it, is this the process of being trained. this is an essentially part of the problem. i went and watched training of the afghan army when i was last in afghanistan in may. and many of these young men are ill literal. they are just -- illiterate. they are just learning to use these weapons. they are just learning to fight in a formation. their officer corps is just being trained up. this is indeed a huge part of the problem. right now the u.s. is training

another 30,000 afghans, but there is talk about trying to train an afghan army of 250,000. it's a huge country. there are afghan troops protecting cities. so it's absolutely true. there aren't enough troops in helmond, afghan troops. this is a primary objective of the u.s. presence. when you're training up troops from scratch, you need to have some assistance when you put them into a fighting situation. you can't just send them in green, because then they're not going to be able to function, especially in a difficult situation fighting against guerrillas in the country side, taliban. that is one of the primary objectives of staying longer and sending in more troops to train the afghans to fighting capacity so they can do the job. host: tom is joining us from jacksonville, north carolina.

good morning. caller: thank you for taking my call. i've been listening to the discussion this morning. i've served both in iraq and afghanistan. missions of supporting and training the locals to stand up and fight. first, on the whole iran piece, i don't see how the administration figures that the sanctions will be able to deter what the iranians are doing. i think from their perspective what they keep saying from us actually is counterproductive because it encourages them to continue their secret weapons. they're willing to fight for it. our position says we don't like it, but we're not going to fight for it. the reason the option is so bad because it's not to the strength it needs to be. i don't think the administration currently wants to pursue a greater stronger military, thus having more problems. host: thank you. guest: there's a lot of reason in what the caller said, but, again, i think it comes down to

bottom line, you have to decide where the united states's priorities are. where the greatest security threats are now. the military is not up for fighting a third war. further more, fighting in iran, it's not sending the soldiers in. we're not going to invade iran. what is being talked about here is military strikes that have a very small possibility of ending a nuclear program that is still several years from producing weapons. and in which iran may never use them. so the priority has to be in securing a country, pakistan, that has nuclear weapons and terrorists within it. we can't invade pakistan, but we are working with their military. we are using predator strikes against al qaeda. and we are trying to secure the backyard of pakistan where if the taliban takes over, you will

have al qaeda moving in there too and it will rebound on pakistan. and so, we're looking at the priority. on area where there are nuclear weapons already, many of them, and terrorists. and i didn't even mention the terrorists inside pakistan would like to provoke a nuclear war between nuclear india and nuclear pakistan and they've tried very hard to do that by terrorists outrages inside india. so here is where the real problem is. south asia. iran is a problem, but nobody expects that they are going to put a nuclear warhead on a ballistic missile and fire it towards the united states any time soon, if ever. the threat that they went is more in the region. they don't have the weapons and they don't have weaponization yet. you have to stick with priorities. host: trudy rubin, what worries you the most? guest: in the region, or overall

in the world as far as security interests? host: let's limit it to afghanistan, iran, pakistan in the middle east. guest: pakistan worries me the most. it has a large arsenal, a weak civilian government. it has a military that is working with the united states, but is ambivalent. lately the pakistani military has taken more action against the jihaddists, the terrorists inside its country, because they were really starting to threaten the survival of the pakistani government. nay were physically moving towards the capital. this was last april when i was there. before that the military was very reluctant, ambivalent about taking them on. right now the military is taking them on more strongly, but that country is still threatened by jihad dees and the pakistani military is very ambivalent

about doing anything to take on the leaders of the afghan taliban who hang out inside pakistan, because it isn't sure -- the pakistani military isn't sure the unite is going to stick around in afghanistan and if the united states is going to leave, then pakistan is going to wet on a taliban government which they think they can control in kabul, afghanistan. i think they're wrong. i don't think they can control it. they couldn't control it when a taliban was in charge before and let osama bin laden have his bases inside of afghanistan. to me the biggest threat is in pakistan and also in afghanistan. i think that's where we have to focus. i think we have to try to contain and sanction iran if it goes forward on this process. i think in the long term, iran's government is going to change because of internal domestic pressures. this is not the ideal approach to iran, but i think that a military approach would do more

harm than good and might leave us with $200 a barrel oil. host: that is the headline this morning in the los angeles sunday times. the nuclear disclosure is widening the internal political rift within the country. guest: yes. inside iran. remember that, that there is a really strong opposition which is not strong millitarily. the regime has all the guns. but there is tremendous and growing popular revullings for the way the current leadership, especially president ahmadinejad, is handling the country. there are allegations of torture and rape in prison, which actually have been going on for a long time, but now with the recent growth in the opposition, are coming into the public consciousness in iran. today in "the new york times," there's a horrific story by one of the opposition demonstrator

who escaped from iran, who was raped in prison. that has to play itself out. were the united states of israeli to do missile strikes on iran, the whole population would unite against an external aggression, or if not the whole population, then much of it. much of the population, which is now becoming ambivalent about their leadership, would feel that it has to support it leaders if they were attacked. so that's another consideration. how does one help the opposition inside iran? so with everything there is to consider, i think that the military focus has to be on south asia and the diplomatic and economic focus on iran. host: our guest, trudy rubin, foreign affairs columnist for the "philadelphia inquirer." her piece today is titled "obama facing a huge task in rallying global power." you can read her works online at philly.com. thank you for being with us. guest: you're very welcome.

host: we want to turn to the economy. author of more than a dozen books peter morici will be joining us. the story this morning in "the new york times" pointing out that for every job seeker, there are six others looking for that same job. we'll talk more about that. what it means and what some are calling a jobless recovery. but first, a look at the issues and the guests on the sunday morning program of c-span radio. >> the economy as will as iran, afghanistan, and, of course, health care, will be some of the topics, all the sunday morning programs today that you'll hear later on c-span radio. the guests on the program, nbc's "meet the press ," former president president clinton, new york governor david paterson, senate republican whip jon kyl, and jim webb. defense tech adversary robert gates and senate armed services committee ranking republican john mccain. the guests on "fox news "sunday include dianne feinstein and the

ranking republican kip bond. also virginia's republican guber thattorial candidate bob mcdonald. on face the nation from cbs, secretary estate hillary clinton and south carolina republican senator lindsey graham. and the guests on cnn's "state of the union" will include defense secretary robert gates, evan bayh, and bob corker. you can listen to all five of the sunday morning programs starting at noon eastern on c-span radio, at 90.1 f.m. here on washington, d.c., on x.m., 132, and on the web at c-spanradio.org. you can also find our schedule on twitter. >> c-span's supreme court week is just a week away, featuring personal interviews with each of the currently surviving and retired support court justices. get an insider's view of the people and places that make up the nation's highest court.

>> why is it that we have an elegant, astonishingly beautiful imposing, impress i have structure? it's to remind us that we have an important function and to remind the public when it sees the building of the importance and the centralty of the law. >> supreme court week starts sunday, october 4, on c-span. and to complement our original production, c-span offers teachers free resources on the jew dirbleedirble system at c-spanclassroom.org. >> next saturday, the meaning of matthew, my son's murder and a world transformed, following a taped event from salt lake city, judy shepard will take your calls live in our studio. next sunday, three hours in-depth with talk radio host and townhall.com blogger hugh hue wyoming he's the author of 12 books including his latest, "g.o.p. 5.0: republican renewal under president obama," live

next weekend on c-span 2's "book tv." >> "washington journal" continues. host: we are pleased to welcome back peter morici, economist with the university of maryland and author. thank you for being with us. the head free-throw line "the new york times" this morning, the rashe owe of those looking for jobs -- the ratio of those looking for jobs, the the highest since 2001. you said before this is going to be a jobless recovery. guest: absolutely. the president's program is not working. the economy is recovering to some limited degree out of its own inertia. the u.s. economy has permanently contracted. america's largest corporations are scaling back their domestic labor forces not in response to a business cycle, but on the premise america will be permanently smaller, will go to the period of growth, and the prospects if the labor market

will remain poor. president obama is largely focused on creating public sector jobs or jobs in the quasi public sector, namely health care providers. the notion that greener energy or new industries will create all the jobs that have been lost to ill ports from china or the high price of oil is fantasy. on pittsburgh, on friday, he talked about how pittsburgh has rerecollected uths. as we import more products, we have to replace those with exports or we have to find places for people in the public sector, which is a losing proposition. there simply are not enough export jobs in tradeable services to compensate for all of the manufacture jobs that we have lost. the american economy is headed for a lower stab dard of living. it is not a partisan operation. host: joe saying there's several cases of a new wal-mart opening,

getting 10,000 applications for 600 jobs. guest: unless we go back to borrowing huge amounts of china, the u.s. economy is simply not going to perform. the president's economic advisors seem oblivious to this. we continue to get the same advice from harvard, larry sommers, that we go from the bush administration from the folks at columbia. it goes on and on and obviously our trade policies are not working. they're destroying the american economy. although we will have some recovery, we will simply not grow at the 3% a year we need to grow to create jobs in america. we add another 1% through labor force because of population growth. there are very few economists that believe the government will grow at 3% long-term. the obama administration's budget is a fantasy. from the next four yearsing it assume 4% growth.

they come up with the numbers the obama administration needs to make its budget deficits go down. host: charles sally has a wife, three young children. the story is called interthe recession's waiting room. he's a factory worker laid off and uncertain whether any new jobs will come to his town. guest: he has good reason to be concerned. the president's pripping for him the is -- prescription for him is to take a course at a community college where he'll take a job that doesn't exist. there are six job seekers for every job in america. it is not likely to improve enough that that gentleman will have hope. the president wants to send everybody in america to college. what doo our yustes teach people to do? expanding liberal arts. how many more english graduates do we need living upstairs with their mothers before we recognize that america's universities are not focused on

occupational training and that our trade policy is not focused on creating employment. cheap goods create a stress in our community. 90% of the homes sold in june were from distress sales. they were either foreclosures, banks taking back part of the mortgage because the homeowner still had the home but was selling at a price below the mortgage value. and homeowners that had lost their jobs or had credit card difficulties. 10% of the sales in june were non-distressed sales. essentially the united states is in a liquidation sale and the administration proposes to fix it by putting us all in health care. you have to have a vibrant private sector to do that and this administration does not have its eye on the ball. the bush administration had its eye on the ball but missed the strike zone. cutting taxes, deregulation, it worked for a while, not anymore. i'm waiting for tony blair to become an american and offer us

a third way. host: what is your way? guest: we need to have a pragmatic approach to free trade. it works with many parts of the world. but it simply doesn't work with china. we've opened our markets to china. they maintain an undervalued currency. their exports -- their exports exreed into the united states, exceed our exports into china by 5-1. every month the trade deficit with china grows. we lose more jobs. it is china's development strategy that subsidizes exports, maintain an undervalued currency to move industry from indiana to shanghai, that de-industrializes america, but we don't replace those jobs. free trade works when you place import jobs with export jobs. instead, obama goes to pittsburgh and makes flowery talks about international communication and tells folks to go to community college. that's why that gentleman has no hope and that's why america is

headed for a very rocky time in 12010. the unemployment rate will go above 10%. host: you have hit the nail on the head. the u.s. in decline and will not be what it is. the good days are gone forever. do you agree with that last sentence? guest: they don't have to be gone forever. u.s. has some of the highest productivity growth in the world. the most productive manufacturing sector in the world. you have to have demand for your products. when you commit imports that come in a 50%, 60%, 70% subsidy, the president will not even acknowledge it. when he was campaigning, he talked about the china problem. he became president, he forgets it. secretary geithner, when he was up for confirmation and in a lot of trouble with his tax form, happened to tell the senators that china was a problem. as soon as he got into office, he seemed to forget that and issued a report that was no

problem at all. they were interested in income distribution. the pie is not growing. it's shrinking. it's crumbling. host: a look at the numbers from "the new york times." 14.9 million americans out of work. 2.4 million job openings. that 6-1 ratio that peter morici was talking about a moment ago. louise is on the phone from st. louis. caller: good morning. i'd like to make a statement, and then i have a comment for the gentleman. i'm making a statement on the health care. the guy that called in from missouri was not a black man, and i think it is reprehensible for him to call in and make a statement like he did when this city here, missouri, is a stronghold for the republicans.

i think that is terrible. further more, i want to comment on this gentleman. the economy collapse did not start with obama. it started with bush. the stimulus package started with bufrpbl as far as i can see right now, he's been in office for nine months. he is not god. he is trying to do whatever it takes to get the economy straight. host: and the president talking about that last night at the congressional black caucus. guest: i was on this broadcast last year, i was very critical of the bush administration policies and its approach to the crisis. my basic problem is we have nothing but a continuation of the bush administration policies when it comes to macro economics and that is because we are

emphasizing a lax monetary policy. a heavy stimulus package that doesn't generate results. we're into almost a year and a half of stimulus between two administrations and it doesn't generate result. the president ran saying he could solve the problems. it's up to him to solve them or make way for someone else. certainly pursuing the same policies that emphasize health care at a time when folks are losing their jobs in droves is not going to work. you have to raise serious questions about the president's health care proposals which has several col opponents. one of them is insurance market reforms. those have been tried by some of the states and they make a lot of sense. by not taking on the large vested interests, we're going to create a larger market for health insurance without bringing down prices. in fact, driving them up. so the typical american family will see this cost of their health care go up perhaps $1,000 a year, and the president proposes to spend $100 billion a year to cover the uninsured on top of that.

that will come to about a $250 bill which is a great deal of money to spend to solve the problem, especially at a time when the private sector is shrinking. the public option scares the heck out of people and unfortunately the democrats feel compelled to impose that on americans as much as the republicans felt compelled to impose no action at all. we do have a health crisis. what concerns me is we're going to have a bill pushed through, signed into law, will make make the american economy less efficient, destroy jobs, create more unemployment and make the problems worse. just because the bill is budget neutral doesn't mean it's costless. that hundred thousand dollars a year could be spent creating jobs instead of more paper work to make your health insurance more difficult to manage. host: doctor. peter morici earned his degree from suny.

we have a call. caller: two questions for the honorable professor. number one, how can you explain the s&p 500 increasing over the past six months when it's dominated by a lot of exporting companies and with a falling dollar. seems to me it would be a recipe for an expansion of our exports. that's my first question. host: we'll come back with a follow-up. guest: that's a very good question. the stock market took two declines. one from the beginning of the recession and the usual pessimism that accompanies that. and then a second last october or so with the layman brothers debacle, a.i.g., and so forth. on the cutler report -- cud low report, i forecasted that we would have a stock market rally come june 30, because the market would essentially smell a recovery. well, it did. and we've seen an increase in the value of the stock market that reflects the crisis in the banks, but not necessarily the

end of the recession. we've gotten back about half of what we've lost. beyond that, there is some potential for gain, because many of those companies are especially moving overseas. general motors makes far more cars abroad than in the united states. that business was not affected by its recent troubles in bankruptcy. that would have gone on even if the domestic company had gone through a normal chapter 11. folks like general electric. they make some profits here. they can profit from 2% growth in the united states. even if americans stay unemployed. they have large overseas operations for which they will make and sell products. china is growing at 8% a year. folks like caterpillar make more money in the china than they do in the united states. i don't know if that company would be profitable if it didn't have a chinese operation. american multinational is a really global party and they can prosper with a slow economy. that should not be interpreted

as bashing these poor fellows. thofe operate in the world the government gives them. our government has been giving them a world where it pays to go abroad, whether it was clinton, burke or obama. but i have a basic question to ask mr. obama and his administration. why is it in clinton's america we can rapidly create good-paying jabs. he was a democrat. he was for the social program. but in obama's america is problems are too hart and we can't look forward to that growth except for some fansful numbers that are written into the budget for the purpose of making the numbers work out. why is it that clinton could pull us out and get us going, but obama didn't? the reason is clinton really understood the need to get american industry growing and exporting and we had an export-led recovery during the clinton years. we are very unlikely to have that from mr. obama. we are going to borrow more money from the chinese and at some point you can congratulate your children for being tenant

farmers in a chinese empire. that's a bit of an exaggeration, but we're starting to owe these folks a lot of money. host: you can read more of the works of our guest on the website of the university of maryland where he teaches at the smith school of business. we have a link to c-span.org. tony joining us from georgia. good morning. caller: good morning, how you doing? i have two comments and then i have a suggestion that i would like. first of all, the first comment is it's always a pleasure to be watching dr. peter morici. i enjoy people that have defensive answers. the second comment is maybe you can give english lessons to our politicians, not just in congress but the world over. the suggestion i do have since we're addressing the economy is that one thing that i tire of is say if i have a problem with, like, my credit card, and i'm calling to get answers to it,

i'm first referred to a computer that's going to give me choices that i don't even, that's not even part of the problem, as opposed to me speaking to a real person. then, when i do get through, and i'm sure this is -- this isn't just my problem, but all of america's problem, which brings me to suggestion. we used to have call centers, that whatever the industry was, whatever you had a problem with in the world, or let's just stick with america. now, these jobs were outsourced over. maybe if we get call centers back that address transportation, health care, anything with the exception of like c-span, which i do enjoy. i enjoy talking to the real people and getting definitive answers that will help my immediate problem. i would like for all callers if they think this could help, and doctor. peter morici, again, please,

thank you. this can't be outsourced. host: your response. punch two if you don't like it. i'm just kidding. guest: you're being tough on him. when you get through, there's usually some mechanism like star zero, pound see or or something like that that will take you to a real person. that real person may be in bangladesh, maybe in pakistan. sometimes the experience with call centers are very favorable, and that is just a little bit of a pause in the line because of distance. sometimes there's really a problem of nuance. because the person on the other end isn't familiar with english idioms that much. it's very difficult to bring these call centers back. let me explain why by using a tang tangible item like a dell computer. a rot of folks buy something inexpensive because that's what they can afford. if they spend $500 on a computer, maybe $100 is actually

spent building the computer. another couple hundred dollars delivering it to you. $50 for the operating system, so on. the only amount that dell, or the other can really devote to support is $50 on the computer. they most likely have all kinds of headaches and require support. you cannot provide much support for the life of the computer for $50 in the unite. that is a problem. the financial services companies collect very large fees. when you buy something, they charge the merchant 2% or 3%. there's money there and it's questionable as to whether we're getting the quality of service we deserve from these companies. but then again, they're owned by citigroup and bank of america where they pay 35-year-old m.b.a.'s for trading. in some ways, i'm starting to think we're living in the pre-that poll-onic france where

we had an air stock rasi in new york that feeds itself very well and it's just trying to reward these people this way. host: bill from california. caller: seems like everyone is calling in to say how disgusting you are sitting there and knocking the democratic party and knocking the president of the united states has been there just a short time. when your old buddy bush was there -- what were you doing when he was tearing up the country? i swear. it's getting terrible. i'm a korean veteran. 80 years old. and i was right there in combat for a year for nothing for people like you that sent us

over there. we're getting so disgusted. all you can do is knock the president of the united states. i know you're like bush himself. you like to be jumped on by people. it just turns you on. but i'm ashamed. i know you're the biggest detriment to maryland university that could possibly be. thank you for having me. guest: well, i think you really have to roll back the old c-span tapes to see that i was very critical of the bush policies and i felt the open trade policy being one way with china were going to lead to these problems. i was very critical of mr. bush and mr. snow. and i was also critical of bernanke in those days as well. as to whether i'm the biggest detriment to the university of maryland, i bet you i've got colleagues that agree with you, so you're not alone. host: bertha from kansas with peter morici. caller: i'd like to say all this

bashing of bush and everything, we need to go back to president clinton. he was the one that sent our jobs to china. can you imagine that we had all the jobs that we sent to china, can you imagine that people were working? we had layoffs, but people were working. we have a problem with insurance now. there were jobs in this country that we sent overseas. we had insurance. we had jobs. we could pay for colleges, buy our food. we ought to hand it to the politicians that sent our jobs out of this country. guest: first of all, it's often the case, i happen to like barack obama. i think he's a decent, regular guy. he's a great family man. and he has a good grasp on some of the issues. houving he's pursuing an economic policy that has failed us through really two or three presidents. clinton got off to a very good

start. he emphasized exports and gave us an export-led recovery. i read about that and praised the policy in "foreign policy" magazine. i wrote two articles, one in the middle, one at the end which praised that policy. unfortunately, we've been on a different path in recent years. on economic policy, we have struck out. i agree with the president that health care is broken. for example, we spent 18% of g.d.p. on health care. the europeans spend about 12%. in some ways, our health care is better than theirs, but in some ways their health care is better than ours. in some ways their health care looks a little bit like concierge service. in britain, you have very good access to your general practitioners. here, don't get an ear ache on a friday afternoon at 3:00, you won't see anybody until monday unless you want to get your insurance company angry with you for an energy room.

the bush administration nor the obama administration have wanted to do anything about health care. they don't have the kind of bureaucracy we have in britain. we pay much more for drugs because we're essentially paying for the r and d for the world. the french, the canadians pay muchle less for the drugs. we pay the production cost plus the cost for all the r and d, and the massive lobbying that the drug industry undertakes to be maintain its privileged position in the american economy. but perhaps one of the greatest tragedies are the tort lawyers, the malpractice lawyers, which are very prominent the democratic party. president obama gave them a pass right at the beginning of the health care reform crisis, so why should the drug manufacturers chip in very much? the $80 billion they're shifting on medical costs. why should the hospital administrations be afraid when any reform in their marketplace is years away and they have lots of opportunities to marshal

their army of lobbyists before they're really happening? if we took on the real proobs, not -- the real problems. i spend time in hospitals these day. and i have to tell you the places are frightening. host: one of the times in "the new york times," unemployment rate now at 9.7% nationwide. the shortage of paychecks is is both a cause and an effect of the weak hiring. joe says myton freeman says the main strength of the clinton administration was a democratic president and a republican congress. ralph from syracuse. caller: the problem among wage earners in america is they're not sharing in their productivity. all the profits are being concentrated in the top 2% to 5%. the reason for that is the working people, you know, 93% of

them don't belong to a labor union in the private sector. they go no collective bargaining power. the card check provision of the employee free choice act was dropped by senate democrats and that's being worked behind the scenes, by tom harkin and chris dodd and those folks. but when that comes out, it should have a higher threshold for card check, pain 55%, 65% of workers want to use a car check to be satisfied as a union or abbinding arbitration, at least after 120 days, because both sides will negotiate if they face a deadline, and the last thing is they've got to have civil penalties for employer u.l.p.'s when they violate the workers rights. i'd like to hear what your guest says about that. guest: that's an awful lot. we could spend about an hour what you just asked about. in regards to the democrats versus republicans, i think you have a valid point. when we elect a republican

president, he brings in some very conservative stages. it's very polarized. presidents by their nature are not going to know a lot of economics or constitutional law or a lot about any subject because they're generals. when both parties come, in they tend to bring in extremely advisors. some of the folks advising president bush would have us back to the days when the government defended our shores, delivered the mail, and stayed the heck out of our lives, wholly unrealistic. when the democrat come in, they want to redistribute income and get in involved in social programs that make no sense at all. basically the health care reform bill coming out of the house of representatives. it's disastrous. not that we don't need to fix the problem and that a good bill couldn't be written. when you have a division where the president has -- where the president is a democrat or republican and the congress is the other way, they look for a more moderate rezzluge.

nothing we can look forward to any time soon right now. it really doesn't matter whether someone belongs to a labor union or not if they can't sell the product. look at the automobile industry. they simply couldn't sell the product, yet that was the most unionized sector of all. i don't know that we want the u.a.w. doing to all of american manufacturing what it did to the american automobile manufacturers with a labor contract that was so complex and archean and difficult that it made the companies not just suffer from high labor costs higher than they could sustain or pay but also made them very cumbersome, difficult to maneuver, difficult to change. it's very hard to implement productivity improvements in american aubling factories simply because of the archean processes that are required to negotiate endless new work rules. regard to contract, i'm not with you. i like elections. i don't think it's a good thing to remove elections. american organized labor is

afraid of elections because they lose them too frequently, because american workers look to what happened in detroit, they say, you know, i don't want to live there. unions have to do a better job so people will vote for them. if they vote for them, that's fine. they should do it by winning people's hearts and minds. let's not have some union organizer twisting someone's arm in a men's room to check off a card. host: the cost of labor is too high to be competitive globally on low cost items. only high automation models would work in the u.s. guest: it's not true that high cost labor is a detriment. we make about 100 tons of steel a year in the united states and we do it very, very well. we make most of our automotive steel here for a variety of reasons. china makes about 400 steel tons a year. the problem is -- by the way, we pay the same for everything

else. they buy their capital goods. the mills in the same place. the iron ore comes from outside of china. they buy a lot of australian ore, as do we. yet they export a lot to us. why? it's quite simple. they have a currency that gives them 50%, 40%, 50% subsidy. on top of that the chinese ladles on subsidy. the obama administration, like the bush administration, to be fair, sees no problem with that. as long as that happens, american manufacturing jobs go away. americans become unemployed. when someone like me loses their job, they generally find a pretty good job working at c-span or another university. but when a manufacturing worker who is 42 years old with three kids loses their job, they don't have many choice. they end up working in a restaurant or hotel where they make $10 an hour. often they don't have those good benefits they should have, that they deserve. the notion it was going to be a service-oriented economy means that someone is going to take out american dry cleaning from

around the world and it's not going to happen. host: our guest, peter morici. ellen joining us from new york, good morning. welcome to the "washington journal." caller: good morning. two points i'd like to make, and please don't cut me off before i make my second one. regarding clinton, the reason the trade policy works or appears to have worked under the clinton administration is he initiated nafta. what we were exporting at that time, we were exporting entire factories and factory parts down to mexico to make the goods and ship them up to us. the second point i'd like to make is this. if we can export finances and if we can export goods and services all over the world and if we can export all of these things, why can't we export our labor rules? why can't we insist that any country that we trade with should live up to our labor standards or come close to them at least, at least give the people who are working for us, who we have making our goods, the right to organize, the right

to form unions, the right to strike? we do not have those kind of agreements. in the e.u., before any country was allowed to enter the e.u., they had to come up to certain standards that were equal or more or less equal to each other. host: we'll get a response. guest: the trade statistics do not bear out the notion that we were exporting factories to mexico. as a consequence, that's why we had export recovery during the clinton administration. we were exporting all over the world. i think there's a tendency to bash nafta too much, which the chinese just love because it distracts us from them. the trade deficit in the united states, which grew from about 1% of g.d.p. to more than 5% the g.d.p., during the bush years. it's about 50% oil, about 50% china. if you take those out, we have a balance of trade. that's lickly to tip even further because the dollar keeps

falling. folks that advocate imposing our labor standards tend to be the ones that also advocate the united states participating in international organizations and abiding by their rules. they're the big advocates of international law. well, the united states, as does the countries we negotiate with, participate in the international labor organization. they're noted to be a member of the i.l.o., you have to essentially embrace seven core labor standards. two of those deal with freedom of association and the right to collective bargaining, which are strong in mexico. i think it's very easy to say that we need unions everywhere and everywhere around the world. we had unions everywhere around the world, the world would be different. it's highly unlikely to happen. what's more, if you want the united states to be a good participant in international organizations, then you have to accept that we acknowledge the i.l.o. and countries that are in compliance with the i.l.o. are ok. in the i.l.o., there's a very weak enforcement mechanism, and

the i.l.o. only sanctioned one country during the 80 years of existence in the 20th century. it was hardly differently to do. the fact of the matter is there are lots of human rights abuses, including china, but the i.l.s. is very -- does very little about it. we should exclude goods from practice that specifically violate people's rights. requiring people to have a union? i guess new york state should not import anything from mississippi, or we shouldn't allow b.m.w.'s to be made in the united states because they're made in non-union shops. i don't know that we would impose those rules on ourselves nor do i think the american public would go go with the notion of unionizing the whole country. ins i was a boy, it was going from 33% to 8% and that number was falling during the clinton years just as much as it was during the bush years, even though the clinton administration had a national board of labor relations that

was very friendly to the labor unions. i don't believe the problem is public policy. i believe the lead evers fail to see the need for change and the nature of the changing workplace so they can make labor unions relevant to workers again. the failure of the labor movement has its origins in its labor leaders. that's where the problem is. if you want organized labor to be strong again, you need more intelligent, more effective leaders. host: j.b. tucker, agrees with your earlier point. he says on our twitter page, the reason our economies move overseas is not cheap lay bomple they are forced there because of over-regulation and taxes. guest: there's a lot to that, but not as much as you think. one of the best selling vehicles is china is buick. hard for me to understand, but they love buick. they have a lot of regulatory.

once we get them there, they require us to source components in china, all kinds of regulations that the obama administration seems very happy to come to. i haven't heard president obama talk about the automobile industry's problems as they relate to chinese mercantilism. they rearrange the balance sheet but probably hasn't saved the basic problem. i don't know if american car makers can make a profit right now in the united states even in a good economy. i'm talking about the detroit three. when i look at their resent quarterly statements, i'm very troubled as to whether the potential really is there for the detroit three to be competitive because mr. bloom struck out in his effort to reorganize that industry. host: linda from hudson, florida. good morning. caller: good morning. one, president obama, when he was running his campaign, he said he would never tax anybody and he would help the elderly. well, i am elderly, and now i

read and i hear all over the state, our country, that he's cutting medicare. $500 million, which isn't fair to us old people, which he says sibling going to help us. how is it going to help us if he's cutting us the way he is? host: we'll get a response. guest: the president says he's not going to increase anybody's taxes, but there are lots of ways to impose economic burdens. he's going to require 25-year-olds to buy health insurance whether they want it or not. it's a very interesting concept for some poor college graduate earning about $30,000 a year, can't pay their rent, required to pay $6,000 on health insurance they can't afford. with regard to the elderly, he'll cut hundreds of billions of dollars out of med dare spending. if that was possible to do, why haven't they done it already? this reminds me of ronald reagan saying we're going to balance the budget by eliminating waste,

fraud, and abuse, and then we had record budget deficits. one of the problems that we have in washington is there are all kinds of ways for presidents to pay for the things they want to do to make their political constituents happy on the backs of ordinary people without signing into law a tax increase. you hit the nail on the head. unfortunately, i've got a bucket full of nails from a hardware store he's smacking that way and it's very bad for the american people, very disappointing. but don't blame it on him because he's a democrat. republicans do the same thing. unfortunately, washington works very well for itself. the company works for the shareholders. in non-profits, it tend to work for the employees. washington across the yard here, non-profit. worked very hard for the guys that work here. host: peter morici of the university of maryland, thanks for being back. guest: my pleasure. we'll see you again.

host: we will continue the conversation tomorrow on the economy. among our guests will be steven cochran, with movies.com, the managing director. he's done a study on houdsing prices and how sluggish it will be in many parts of the country, especially in the industrial northeast. also former defense secretary in the clinton administration, william cohen, to talk about the decision making process that this president is now facing in afghanistan and his own experiences during the clinton years. william ouchi wrote "the secret of t.s.l. ." final dr. phelps with the national institute of aging, a new report on alzheimer's, 35 million worldwide. more on these issues tomorrow morning. the "washington journal" gets under way every day at 7:00 a.m. east coast time, 4:00 for those of you on the west coast. thanks for joining us on this sunday. enjoy the rest of your weekend and have a great week ahead. [captions copyright national cable satellite corp. 2009] [captioning performed by

national captioning institute] they will talk about the history of the senate, and he showed some rare photos of

senators. "q & a," tonight at 8:00 eastern and pacific on c-span. >> joining us on news makers for this sunday is congressman spencer bach as, republican from alabama and ranking member of the house financial services committee. joining us for questioning is shawn. and we have alison fitzgerald from bloomberg news. >> thank you for coming. right now the leaders of the 20 biggest economies in the world are meeting in pittsburgh. one of the big subjects is financial regulation, which your committee is obviously grappling with. how important do you think a role is for international cooperation in setting specific things such as capital requirements, or more generally, just ways that the nation should work together in

establishing norms for the financial system? >> well, we also say that is a great question, but that actually is a great question because it is something we struggle with. i am going to answer this by say it is very important. we are in a global economy. in 1984 when i was leaked to the state senate, we were the second state in the nation that passed interstate banking. so really, financial services, you could do it all in the community. ut banks that were owned in your home town. you got a mortgage and went down to the local bank. but that bank couldn't even branch across state lines. now you have international banking and the internet. so the market has tremendously changed. now what my word of caution is, is we, the american economy, is three times bigger than the next biggest economy, which is the japanese economy. it is bigger than the japanese

economy, chipes, british, french and german economy put together. we didn't get there by doing what they do. we got there by doing our own free market, free enterprise system, competition, personal choice and innovation. we don't need to basically have international standards or let them dictate how we appreciate financial services, energy, health care. we need to keep what works and fix what is broken. >> let me pick up on that point. the president picked up on this last month, and last friday in pittsburgh. what resulted in the collapse of lehman brothers and a.i.g.? was it oversight? where were the holes? >> well, it was a combination. i would say it started with really our markets evolving and

outgrowing regulation. zurtization -- securitization really only started in 190's. credit defaults, the first one was really in 1994. subprime lending really didn't catch on until about 10 years ago, and most of those bad loans were just in the past few years. so we really had a 1980 regulatory structure in the 21st century. yet, you had tremendous evolution of financial products. i don't think the regulators kept up with it. and then the bad actors always find gaps in the regulation. the subprime lenders that failed and really brought things down, wachovia, and caused trouble for merrill lynch and bank of america, they

were unregulated subprime lenders. they were making so much money that wachovia bought one, bank of america bought on, and they didn't realize that under all those profits, mortgages were going bad. >> and if the chairman bike barney frank says we need more regulation, and you are saying we need modern regulation, where is the agreement? >> we need an agreement that the information needs to be there. i know what my derivative agreements with you are. but say alison, i don't know what you're arrangements with alison or shawn are. i need to know what your liabilities are with other people so i will know whether or not you will fulfill your

obligations with me. we need to regulate affiliates of depository institutions. we have unregulated subprime affiliates were members of depository institutions, and they failed and brought down the institutions. and this was going from regulator to regulator, and the regulators were saying if we do this to our institutions, they will switch their charter. that is why we have gone to a single regulator. >> congressman, treasury secretary geithner came to your committee a few days ago and said that he was ok with chairman barney frank's decision to scale back some of

the powers and authority of the proposed consumer financial protection agency. chief among the chairman's update was to reject the administration's mandate on so-called vabla -- vanilla financial products. >> sure. >> you have expressed reservation frs day one about this proposed consumer protection agency. given the updated plans and given the administration's approval of the chairman's plans, would you accept now the democrats' proposed consumer financial protection agency, or do you still have some serious problems with it? >> well, basically what we have is chairman frank's talking points. we still have the white paper from the administration, which basically authorized a

government agency to design financial products. as i said earlier, america got to where we are by giving people choices, by innovation, by new products. it was the abuse of those products where you had a problem, where you abused derivatives, or you abused subprime lending, or you abused the securitization market or didn't understand it. i belief it is really more government management. you saw that in health care where they say we are going to have a government bureaucracy come in and make things right. you saw that recently with cap and trade. they said we are going to fix it all with green. now we need nuclear, but we are going to come in and tell the utilities they have to do this and that, and if they don't, we are going to tax them and

theirs commerce. all these new ideas, behind them has to be a tax because it is a brand new bureaucracy. but behind it all, it is just more government regulation. it is the government making decision, the government managing jobs. can you imagine 30 years ago if someone had said they were going to propose that a government agency design consumer products and that they have to approve the design and the formal of every protect? >> but chairman frank took that out of the bill and proposed that, if he did that, are you against the agency anyway? >> well, he hasn't offered legislation, so we don't know. what republicans are for, and democrats, where we have common ground, we need better consumer protection. that is why we have said let's have one overall bank regulator that understands the banking system, can really patrol it, has the expertise.

and we think the way to do that is to draw the safety and soundness regulators in, the s.e.c., those that are in charge today of consumer protection, and let them work for a uniform rule. >> that souppeds a little bit like what chairman dodd on the senate said he wants as well. >> senator dodd and senator shelby have basically just recently talked about really something that you pick up as a republican alternative. it looks very similar. yes, we have talked about one regulator. now we would have separate charters within there. >> so the different forms of banking? >> yes. although they have said we are going to shut down the o.t.s., i think a thrift charter is not a pad thing, so i think that ought to be preserved. now you still have a choice between being a state or

federal. but the regulators, it would be one single regulator, and they would establish single rule. >> should that regulator be the federal reserve as a lot of democrats have proposed? >> no. the federal reserve really should be in charge of monetary policy. now the federal reserve is not a safety and soundness. they are not a prudential regulator. in fact, they do have the very important task of monetary policy and a stable currency. and really, you shouldn't distract them by trying to make them in charge of either consumer protection, or for that matter, safety and sound nelson. but when this comes to safety and soundness, there has to be a partnership. there has to be a working relationship. there has to be some connection between the federal reserve and what we or what senator dodd has proposed as a dingle and i

would say umbrella regulator. you have a lot of expertise, and those people, particularly as we become more complex in financial services, you can't expect a small agency that has been regulating a community bank to understand a company as diverse as a.i.g. or as diverse as bank of america. you're just asking too much. you need to bring them together. you need some consolidation. you don't keep creating regulators. >> but aren't we creating others that are too big to fail? >> oh, absolutely. i think the biggest distinction, and it existed yesterday and the day before. you saw it glaringly when secretary geithner testified, is republicans have said no to bailing out single companies. i think there is a misconception. we have not said that the fed

doesn't have a role in the overall market and stabilizing the financial system or stabilizing trying to add liquidity, assuring there is enough capital. but when it comes to the fed or the treasury bailing out general motors, or a.i.g., we think there were probably just -- justifications for some interventions last year. but we believe we ought to get out of the bailout business, and we ought to get out of the business of taxpayers coming in and assuming the risk. we have had a giant assumption of private debt by the public sector. the debt is still there. it has just been shifted from the private sector to the u.s. government, and therefore, the taxpayer. >> on that subject, former fed chairman, paul volke was at

your committee discussing it. his recommendation is that for giant backs such as citigroup or j.p. morgan, that you should limit their performance because they are probably in need of some sort of federal assistance if they got into trouble. are you in favor of that? >> i think you have brought you were an interesting point. i've expressed concerns about what were investment banks. they weren't commercial banks. they weren't making loans. what they were doing -- you may have a bare stearns or lehman. they were doing everything from operating ledge funts or trading on their own account, not for commerce. they were trading

organizations, and they were taking risks, proprietary trading, which is a very risky thing. that is very different from a commercial bank that is lending money. you have got goldman-sachs and morgan stanley, and they have come within the umbrella of protection of the federal government. well, if they are going to continue to engage in proprietary lending, and if they are going to continue to maybe be involved with hedge funds activity, some of these more risky activities, there actually needs to be separation . >> would that include stick -- citigroup as well? >> yes. when you get into citigroup or bank of america, you have a problem there because they are not one or the other. but if you're going to have the protection of the safety net of

what was designed for depositors, the american public, and you start giving them protection from their more risky activity, that is not what was intended, and i think that is what paul was saying and from what we have said. if they are going to engage in this activity, if they are going to lose money, the federal government shouldn't come in there and guarantee, or they shouldn't guarantee their losses. they shouldn't guarantee their obligations, and we have done that over the last year. that is a big mistake. that is why i introduced my tarp trust that said any of these companies that the government has a significant other than shirp in, we are going to put them in a trust, and we are going to work towards dwesting the -- divest ing the government of ownership. >> could you talk more about that? you have mentioned that the

government is not against reforming the wall street regulatory system. at the same time you have also expressed your strong distaste for bailing out companies. where do we draw that line? where is that line between aiding a company that, if it fails, could really seriously damage the economy and just letting that company die a natural death? >> sean, you ask why did it fail. did it fail because it engaged in risky behavior? if it did, then it shouldn't come under the guarantee of the safety net of the u.s. government. i will give you a distinction. there has been a lot of talk about 13.3 of the federal reserve act. much of what the federal reserve did, it did under that act. now, if 13.3 is designed to simply go in and stabilize the overall market, then i certainly could say there may

be justification for that. i don't think it was ever designed to buy a part of general motors, or to buy a.i.g. i don't think that was ever the intent. and secretary -- i mean chairman video cameraer -- vilker said i have great unease over the exercise of that power. now he has even greater unease i would say, and concern, when you start bailing out an individual company. that is where we have said no. >> with the financial firms, you have said, and these are your records, that we need to create market discipline. but is that realistic? how do you do that without regulation? >> absolutely. i think that is what has made the united states what it is. we have had market discipline. we have let companies gamble, and i mean take risk. but when those risks have turned out badly, we didn't come in and socialize, you

might say, their losses, privatize the profits and socialize the losses. i said that on the floor of the house last year. i don't like that, and i don't think the taxpayers like that. the united states is really about people going out and creating new products, innovating, and often they fail. i mean you look at the internet bubble. a lot of those companies failed. but the government wasn't there bailing them out when they failed, or the government wasn't there saying you can't take those risks. that is where we get back to what alison had skpped -- asked about what were investment banks, the bear sterns and the lehmans, or the goldman-sachs

or morgan stanley. it depends on what activity they are engaged it. i believe we would say yes, there is a role for government, and there has been since the 1930's, in insuring our deposit in a commercial bank. but when you get beyond that, when you get to where you are insuring a bet on wall street, that is a different animal. now i think what the administration has come in and said, we are not going to allow those bets. and i think what republicans have said no, we are not going to intervene in the private market. but if those bets turn out badly, the taxpayers aren't going to be there. >> alison, fitzgerald? >> the taxpayers obviously weren't there when lehman brothers failed last year. but shortly after that, including citi group, which is mostly a commercial bank, but has these arms in the past that have sponsored hedge funds, et cetera. there a role in saying if

you're a commercial bank, mostly a commeerings bank, you should not be able to sponsor hedge funds? there is some assumption that your deposits are protected by the federal government. >> i think if you are a commercial bank -- let's say you have a private equity fund or you have a hedge fund, on you are doing proprietary trading. >> right. >> then that shouldn't be guaranteed. you need to wall that out. there need to be a wall of separation. i have great unease over allowing a company that is under, as i say, the safety net -- and really, i think part of the answer to that is to pull back that safety net. i do believe this, and as we started this discussion, what we witnessed last year.

well, it was the overextension of credit and leverage. to a certain extent, that was a failure of safety and soundness regulator. i don't think you create another regulator on top of that, that that solves anything. when you look at those activities, if those banks are going come under the protection of the fd -- fdic, then you have to see how much risk they are assuming. >> the $700 billion so-called wall street bailout, tarp, set to expire at the end of this year, unless congress decides to extend it through october of 2010, we still have a few months left for you to make your decision, but would you be willing to extend it? >> sean, first of all, the administration's proposal is basically making permanent in

my mind. they are assuming we are going to operate this tarp program forever, and we are just going to continue it 10 years from now. secretary geithner said in response to brad sherman i wouldn't take off the table a $1 trillion bailout. he said would you bail somebody out if it cost $1 trillion? secretary geithner said i wouldn't take it offer the table. we are going to take it off the table. any legislation we pass that i'm a party to and the reublicans in the house are a party to won't have the bailout of individual companies. >> but do you have the votes for that? >> i think we do because a lot of our colleagues agree with us, and i think more every day that say -- you know, the fed, offense, has become -- they have become the chief purchaser

of fannie and freddie securities. they purchase about 50% of the treasuries that were offered in the second quarter. so we now have government agencies bailing out or financing other government agencies. you have got to ask yourself the question who bayless out the government? if the government keeps bailing out the government, other government agencies or the private market, where does it he said? everything we discuss, if we don't get our handle on social security, or indictlement programs, medicare and medicare, you are talking about a government that every day it becomes more and more difficult to finance these bailouts. and they are only doing it by

buying -- you have the housing, the g.s.e. well, now the treasury and the fed are beginning to -- they are the purchasers of those obligations. you have the fdic that has recently set our reserves. they have recently declined because they have made some loss provisions. but they have set aside for losses, and now the losses may be twice what they are saying. chairman frank a year ago said if i can get with president obama and 60 members of the senate, i can get the government back in the housing market. he has done it. they are back in it. when you talk about the housing market today, you are talking about the government. and what worries me about that is where do housing prices go?

if they continue to go down, it could bring many of these government agencies down, and wit them, the debt that the treasury and the fed that is purchased. >> so behaved on everything that you have been saying, sp conservatives have said that we are becoming a socialistic country. would you apply that moniker? >> every time you say that, they say we are talking about a scanned neifiian model. i don't care what model it is. i don't think anybody has accused anybody of a soviet model. but yes, we are becoming more -- any time you step in, the government, and you begin to -- if you can't make the payment, we will make it for you, or if you can't make it, we will forgive part of it for you. we will finance this for you. and with this protection agency, we are going to design one product, and that is the

product you're going to buy. i would certainly say we are getting away from what made this country great. >> how do you get back to it? what is one proposal that you would say would be the first thing to get back to it? >> if i had to go over today? >> if you were in the chairman's seat? >> well, we are working on the credit rating agencies. we have had one proposal, and we are going to have another. we could have avoided most of what we witnessed last year if the credit rating agencies had done their job with securitizations. i think you are going to have to have more disclosure. and i think consolidating some of the regulation and protecting consumers. i advocated in 2005 a subprime bill. what i advocated basically the fed adopted two years later. if they had adopted it two years earlier, a lot of people could have avoided a lot of heart ache. >> do you think we will see any

meaningful legislation this year? >> yes, i do, because i think there is consensus between the american people and i think a growing majority of congress that we are not going to bail out individual companies. i think we are going to try to get the taxpayer off the hook, and i think there is an agreement in congress that we have to do a better job of protecting the consumer. and we can't do it by having eight or nine different agencies trying to do the job. when everybody is in charge, no one is in charge. but you can't just go out and create a new agency without any expertise, without any understanding of safety and soundness, and tell them to go protect the consumer. >> congressman bachus, ranking republican on the house financial services committee. thank you for joining us. >> thank you. >> we continue the conversation

with alison fitzgerald of bloomberg news and sean lengell. let me hear from you about bailout fatigue. behaved on was heard this morning from congressman back us, how prevalent shah from anything that comes out of congress? >> certainly this is a universal -- there is considerable bipartisan support against bailouts, against continuing this practice. this past week there was a group of 28 house members, bipartisan, that sent a letter to treasury secretary geithner saying they thought the bailout program should expire in december instead of being renewed for another year. this is an issue that plays well at home. the whole bailout program has

not been terribly popular in home districts, and lawmakers know that, and so i think that there is generally -- there is considerable bipartisan support to end any more bailout. >> do you agree with that? >> i agree there is very little support publicly and in the congress for passing legislation that would allow more -- that would protect them. however, in president obama's reg reform plan, they have a line or two, a white paper, that says essentially if another catastrophe like last fall happens again, and we have to come in and deal with a failing bank that we are afraid is going to take down the whole financial system, they have a line in there that says among the things the treasury should have at its disposal is the ability to inject money into the bank, use taxpayer funds,

which is very unpopular. it showed up on the hill last week. congressman sherman was trying to get secretary get ner -- geithner to say he would limit any such help to $1 trillion, and the secretary would not agree to it. the people dealing with the melt down of the financial system want to have everything available to them. >> we have about a minute left, but what did you learn today? >> i am surprised that mr. baucus things that some legislation was going to pass this year. i thought there was a lot of fatigue. >> that will result in more regulation or a different type of regulation? >> that is a good question.

more regulation, but not as much as the administration would like. this proposed consumer financial protection agency would basically be a new agency to safe guard against shady mortgages and things like that. that would be a new agency. it would be another layer of bureaucracy, but i think there is another republican support for it as long as it sort of gets whittled down. the administration has already expressed some -- has said that they were willing to allow that, maybe not to be as big a scale as they originally they wanted it to be. >> thanks for being with us, and thank you for joining us on news makers. >> thank you. >> thing you. nice to be here. [captions copyright national cable satellite corp. 2009]

[captioning performed by national captioning institute] >> this morning on c-span, highlights from the health care mark up, and that is followed by a house hearing on the oversight of the federal reserve. later today on c-span, united states central commander david petraeus talks about operations in iraq and afghanistan. that starts at 6:30 eastern here on c-span. the senate finance committee began working on amendments to its health care bill this past week. over 500 amendments have been proposed. for the next three hours, we will show you portions of their debate, beginning with last tuesday. >> the committee will come to order. the committee meets today to

consider an original bill providing for health care reform. hear s. true man said men make history, and not the other way around. progress occurs when leaders seize the opportunity to change things for the better. my colleagues, this is our opportunity to make history. our actions here this week will determine whether we are courageous and skillful enough to seize the opportunity to change things. presidents from truman to johnson, from nix to clinton have had the courage to change health care reform. the time has come to make the attempt, to have the courage to take on this daunting task. the time has come to reform america's health care. the times demand nothing less.

just like week a harvard study found that every year in america, lack of health care leads to 45,000 deaths. people without health insurance have a 40% higher risk of debt than those with private health insurance. no one should die because they cannot afford health care. this bill would fix that. every 30 seconds another american files for bankruptcy after a serious health problem. every year, about 1.5 million families lose their homes to foreclosure because of unaffordable medical costs. no one should go bankrupt because they get sick. this bill would fix that. a new kaiser family foundation survey found that health care coverage for the average family now costs more than $13,000 a year. if curent trends continue, 10 years from now in 2019, the

average family plan will cost more than $30,000, a more than than two-fold increase. no would not should have to live in fear of financial ruin because of increasing insurance premiums. this bill would fix that. a balanced common sense plan that takes best ideas from both sides, and is designed to get the 60 votes that it needs to mass. now the choice is up to us. now the question is whether we can seize the opportunity and change things for the better. all americans should have access to affordable, quality health care coverage. the congressional budget office says this bill would raise the share of americans with insurance coverage from about 83% to about 94%. the c.p.o. says this bill would deliver coverage to 25 million people through new insurance

exchange, and to 11 million more through medicade. our proposal would dramatically increase prevention and wellness. it begins shifting health care delivery to the quality of care provided, not the quantity of services represent dered. it would lower prescription drug costs dramatically to seniors. it would reform the insurance market to protect those with preexisting conditions, to prevent insurance companies from discriminating and capping coverage, and it would require insurance companies to renews policies as long as policy holders pay their premiums. no longer would insurance companies be able to drop insurance coverage when people get sick. these reforms would give americans real savings. the bill tells us that the ratings reforms and exchange in our proposal would significantly lower premiums in the individual market. under our plan, everyone making less than $133% of the poverty

level would receive health coverage through medicade, and our plan would provide tax credit to help low and middle income families to buy private insurance coverage. these tax credits means that our bill would deliver tax cuts to those whom it affects. overall, taxes would go down to people affected by this bill. these credits would help to make insurance more affordable. and despite what some people might say, this is no government takeover, no takeover of health care. we have built our plan on an exchange marketplace that allows choice among products. each individual would be able to choose their own plan. our plan does not include a public option. we did not include an employer mandate, and we paid for every cent. this is a uniquely american solution. we are not cab.

we are not britain. we are not others. we are the united states. americans have a tradition of balance. we don't buy into government-only solutions. but we do believe in rules of the road. we have a tradition of mixed solutions. we have a tradition of compromise. we have a tradition of balance. this is a balanced package. and our package is fiscally balanced. it starts reducing the deficit in 10 years, and by the end of the so i-year window, it is moving in the right direction. and our package will control health care spending in the long run. it says in the second 10 years our bill would continue to reduce the deficit by a half crert of g.d.p., that is about $800 billion to $900 billion in budget reduction. now it comes down to this committee. the other four committees have acted. now it is our turn. last week i put out my

proposal, though i don't pretend it is the last word. i am eager to work with other senators to make this an even better bill. that is why this morning imi am going to make several significant modifications. these modifications include a number of ideas from senators on the committee. these modifications will improve and strengthen the package. now i look forward to our amendment process here in the committee. through this open process, i hope we can improve the bill even further. after that, i look forward to melding our bill with the health committee's product and look forward to constructive floor debate starting as early as next week. one point i want to acknowledge up front, that we did not do as much to correct the payment to doctors, as much as i would like, under the misnamed sustained growth rate. it needs to be fixed, and i look forward to further

progress on this. and so let's begin our consideration of this bill. let us make this a time for progress. let us seize our opportunity to make history, and let us do our part to make quality affordable health care available to all americans. i now recognize senator grassley. >> mr. chairman, i have a long statement, so at any time if you want me to quite, i am i will quit. >> senator, you can give your whole statement if you want, but i encourage everybody to stick with five or six points and respect everybody else. >> ok. first of all, mr. chairman, i applaud you for your efforts to bring us where we are today to reform the health care system. few people have worked as hard as you have worked on this subject. you have had a tireless dedication to moving ahead. and you have done everything you could do get us to this

day. so thank you very much for that cooperation. >> you're welcome. >> and you have created an environment in this committee for bipartisanship and collegiateial work, that is particularly very important on the biggest issue this committee has ever struggled with. the round tables and walk-throughs held this year were programs the most pope and inclusive process this committee has undertaken in its history, at least since i have been on the committee. but despite your dedication and commitment to this important endeavor, i have a feeling that the white house and the leadership on your side grew impatient and through artificial deadlines forced us to where we are today. it seemed to me that some people in the senate would rather have it done right now instead of being done right.

that artificial deadline pushed us aside and put an end to that bipartisan work before it could produce a bipartisan bill. it seems that the white house and the leadership from the beginning were never really going to give it time to do it right. we could get no assurances that the democratic leadership on the white house would have backed a bipartisan effort after it left this committee, and that was a big concern on my side of the aisle over a long period of time. and it was a genuine concern for serious reasons. no one wanted to be used in a process that was going to have the rug pulled out from under it at some point down the road. those concerns made it practically impossible to attract many of my party members to consider supporting this effort at the beginning. i had a meeting, as five other

members of this committee did, with president obama on august the 6th. i told the president that if he wanted bipartisan support for the bill, then he had to indicate publicly that he would be willing to support a bill without a government plan. i didn't say that he had to give up on that at that time. i just had to have him say to me that he could support one if we presented it to him that didn't have a government plan. then we had a lot of back and forth effort between the house and the congress on whether or not a public option would be out there. at one time secretary sebelius said on cnn that a public option is, quote, not the essential element in reform legislation. but then later on it seems like there was a revolt against that statement, and the white house

quickly retreated and said that a public plan was on the table. so without a commitment that was very important on my side of the aisle, it became clearer and clearer as time went on that they couldn't, and wouldn't, be making that commitment. they couldn't make that commitment because they knew they wanted something republicans would never support. they wanted a government plan that would changed the health care system to one operated by the government totally. but the american people have rejected that idea. they know it would lead to the government deciding what doctor they could see and treatment they could have. just like with other countries with government systems, they ultimately have turned to government-imposed rationing to control costs. instead of going down that path, restructuring the health care system is something that must be done with broad

support. after all, it is one sixth of our economy. when you use the word health care, you are talking about something that affects the life and death issue with every american. so, our health care system does face many serious challenges that need fixing. the american health care system has too many people that are without coverage. the quality of care that is provided is not as good as it should be. and the cost of health care is out of control. the medical care we provide should be second to none, but the reality is that in some places we have world class health care, but in many areas we lag behind other countries in the quality of care our citizens are provided. costs are rising in health care at a nonsustainable rate. and in some sorts of the country are those costs are far higher, and quality far lower.

the costs and quality of health care provided in america must improve. another major problem is the one that has been obvious for more than a decade, that medicare program is going bankrupt. medical inflation consistently outpaces the inflation of the economy generallyly, and those costs are bearing family budgets, small budgets budgets, state and federal budgets. we have to bend the health care growth curve. we have to get health care costs under control. these are very big problems, and it is my belief that we should work together to fix health care problems in america. and we have invested months of work into this bill, and it hasn't been easy. this is an extraordinarily complex work. on the other hand, i can say that every one of the meetings

that we had, that there was never one harsh word said about -- between anybody. it was just six people working together to try to reach an agreement. so we ended in a friendly way, and hopefully it has nonended. but for right now, it is. we have had thousands of hours of staff time working with experts from all walks of life. it has required thousands of staff hours working with the congressional budget office to come up with reliable and accurate estimates on the cost of reforming one-sixth of our economy. we set out with the goal of paying for the bill. all of those things are not trivial notions. the senate health committee bill that was produced, but it wasn't paid for, not remotely close. the house committees have produced a bill that was not

paid for, not remotely close. and after august they delayed their votes because of public backlash. writing a bill that actually is paid for is very difficult, as i am sure senator baucus can tell us better than i can. it requires difficult choices on spending and revenue that those other bills simply avoided. this process has taken a long time, and it should not be a surprise. in finding bipartisan consensus on a bill that affects one-sixth of the american economy is also not a quick and easy task. members have deeply held beliefs on how reform should be done. the effect of reform varies from state to state. but working together, there was significant progress made. the first time we received scores from the congressional budget office, that policy

wasn't quite paid for, by a lot. maybe $1 trillion. but we didn't quit, didn't throw in the hole and kept working. we made hard decisions about what revenues needed to be raised. we traded propose ass with the c.b.o. again and again. and in july, the democratic leadership took the most significance financing mechanism off the table. this was a huge set-back for our work. and yet immediately we heard their complaints that we weren't done yet. but now here we are. the cry of impatience has won out, and the artificial deadline was put in charge of this process. they have put moving quickly over moving correctly. it would be the same as if you had a house that was half built when the contractor declared it done and said here is your house, move in tomorrow.

would you move your family in if it didn't have windows, running water, without a roof? of course it would be absurd to do that. likewise, their deadline causing an end to our bipartisan work before it of his done is just absurd. i find it utterly and completely appalling this. is about reforming one-sixth of our economy. thank of that. one out of every six americans, we are passing legislation affecting they will. it is also about everybody's health and health care. getting it right should be our highest priority. i know some folks want it done yesterday. i know some folks only want it done their way. but that is not how responsible legislation dealing with complex issues should occur within this great country and body we call the senate. after all our work, there are a lot of things i can support in

this package, but there are also a lot of very significant, unresolved issues and provisions that i don't support. first, the amount of spending is a serious concern. the chairman should be congratulated for producing a bill, however, that is fully off set. because being fully off set and reducing inflation of health care were major goals that the six of us had, and the chairman has kept to that. that is more, though, than the other committees have done, and so it ought to be recognized by everybody of how fiscally responsible this approach is even if they disagree with it. those other health care bills add hundreds of billions of dollars to the deficit, that is already expected to be a record-setting one.

unfortunately, all the added spending in this bill requires more and moreoff sets to pay for it, and as spending goes up, more and more toxic offsets are required to pay for it. this bill has new taxes on everything from q-tips, to pregnancy screening and tests. there is even a $60 billion across the board plan tax. experts say all of these health care taxes had been passed on to consumers. when the focus of reform should be on reducing cost, yet taxes do the opposite. they increase health cost. there is no plausible rationale for imposing all these new taxes and big spending on top of an economy that is doing its best right now to recover. and adding insult to economic injury, most of the benefits from this bill wouldn't start until three or four years down the road while the new taxes

start much sooner, in some cases already next year. what i heard clearly during august was a lot of concern about what people see government doing with all the spending. the government takeover of banks and automaker programs such as cash for clunkers. they are seeing these massive bills, and they are afraid of what all this means in the direction of our country. in addition to concerns about cost to taxpayers and affordability for individuals, there are still some other serious outstanding issues that have yet to be resolved. preventing taxpayer funding of abortions, enforcement against subsidies for immigrants here illegally, medical malpractice reform, all unresolved. on abortion, despite commitments made by the president and secretary sebelius, this bill does not follow the long-standing principle that federal funds

should not be provided for elective abortions. instead, federal funds would end up subsidizing elective abortions. and plans that offer abortion coverage would be subsidized with those same federal funds. on the subject of immigrants here illegally, this bill also fails the test in at least three ways. first, although the market appears to require the new exchange to verify social security numbers and citizenship or legal status, it does not include blocking of social security numbers, real i.d.'s, verification of address and prior year income or any other mechanism that verifies identity to prevent identity theft. second, it appears to contain privacy protections limiting the use of data collect the -- collected by changes, but it does not allow information sharing with the internal

revenue service and the social security administration to protect and preclude the multiple use of the same social security numbers. and finally, i would also note that the designation of indian tribes would allow them to enroll anyone under the age of 22 in medicade and chip and anyone of any age in exchange without verification of citizenship. and we have discussed so often in this committee in the past the roll of indian tribes and verifying citizenship has been questionable. another area of concern is the individual mandate to purchase coverage. as we have worked on health care reform over the past several months, i become increasingly concerned with the intrusion into private lives that the individual mandate represents. certainly there is a principle of personal responsibility that applies here. i don't deny that. when someone who voluntarily

chooses to go without coverage guess into a serious accident or unexpectedly becomes seriously ill, those costs get passed on to the rest of us. but the federal mandate requires an extensive set of new enforcement tools housed in the internal revenue service and backed by the full force of the federal government's enforcement powers. that combined with the magnitude of the penalties is cause for serious concern. the future -- the further that we waded into this, the more concerned i became, and the federal mandate has another significance effect on this ledge lation. having a mandate to purchase coverage requires the inclusion of these sizable federal subsidies to make sure that coverage for lower income families and individuals is provided. and the mandate also results in this mandate on all states to

expand their medicade programs to cover millions more people than they do today. the cost of this mass jimmy v expansion of medicade and more so the federal subsidies is about 90% of the $856 billion of spending in the bill. and all this spending is driven by the inclusion of the individual mandate. i think that we also have to examine where the idea of mandate -- or the mandate purchase of coverage originated. it of course originated with the health insurance industry. for them, a requirement that rn buy their product sounds like a great idea, but to the rest of us, it might seem just a little bit self-serving. the bottom line is we should return to first principles when it comes to the treedoms that we enjoy in america. and consistent with that, certainly individuals should maintain their freedom to choose whether to purchase

health insurance coverage or not. the individual mandate, by the way, is not necessary. we can make it work without that individual mandate. it may be what the powerful insurance companies demanded for obvious reasons, but we don't have to do it the way the insurers want it down. all insurance can be done with a reinsurance system instead of individual mandate. on the subject of medical malpractice reform, this bill also necessary reflects to confront this growing problem, something president obama acknowledged as a priority. it needs to address junk lawsuits that drive up costs and put doctors out of business. president obama has repeatedly expressed support for medical malpractice reform, going so far as to direct the secretary of h.h.s. to move forward on projects. but the time for demonstration projects is over.

many states have implemented medical malpractice reform that have reduced the growth of malpractice premiums, and there is a greater potential for cost containment if physicians stop practicing defensive medicine. real and meaningful health care reform must include medical malpractice reform, and i think that is some that the six of us have made a great deal of progress in just before we had to abandon our efforts. it is not too late to get it done right. we can stop at any time and refocus this effort. we can lower the spending in the bill. we can improve the quality of care with delivery system reforms that reward quality instead of quantity. we can focus on health care costs. we can lower costs with medical liability reform. we can fix the insurance market. so, mr. chairman, in the spirit that you and i have been working together for 10 years, but in the spirit of which we

have really concentrated on this issue since january, and in the spirit of which the six of us have worked together for three months, i hope at some point the white house and leadership will want to see the mistake that they made by ending our collaborative bipartisan work. i hope at some point they will want to let that bipartisan work begin again, and this time back that effort and give it time to get it done right. thank you, mr. chairman. >> thanks very much. first, it has been great working with you. >> thank you. >> it always has been and will be in the future. i very much hope we can find some agreement here. my door is always open. hopefully we can find a way where you and others can be part of this moment in history when we finally enact health care reform. i deeply appreciate the manner in which we have been working

together. thank you very much. next on the list is senator conrad. >> thank you, mr. chairman. i want to first thank you for your leadership. in my 23 years in the senate, i have never seen any committee chairman dedicate himself as fully or as completely as you have to this effort, and i want to recognize you for that. i also want to thank the other members of the group of six, three democrats and three republicans. senator grassley mentioned the other day that we met some 61 times, and it was a good faith effort to try to reach agreement. and in many areas, we did, and i think we made dramatic progress towards common ground. the fact is that many things that republicans wanted to see left out of this have been left out. there is no public option. there is no employer mandate.

there is tax reform to go after cadillac plans to reduce overutilization. there is clear languages to prevent those who are here illegally from benefiting from these initiatives. there is also a clear directive to prevent federal funding to be uses to if you said abortion. there is also clear language to encourage medical malpractice reform in the states, and the senator from iowa is also correct that we didn't reach final closure on those key issues, although we did make enormous progress. some have said well, this effort was a waste of time. i don't believe that. i believe it produced a very

credible package. to deal with the circumstance that is absolutely unsustainable. we as a country face, in health care, an absolutely unsustainable future. i will just use a few charts to illustrate. in 2009 a family of four faced on average premiums of $13,000. by 2019, according to all-pro jeckses -- all projections, they will face premiums of $22,000 400. it is not just our families and businesses that face unsustainable increases in their premiums. it is the overall health care system. currently we spend one in every six dollars in this economy on

health care, but if we stay on the current trend, we will be spending one in every three dollars on health care. that is unsustainable. in the face of a federal debt that is soaring, under the congressional budget office's long term budget outlook, we see that federal debt is expected to go to more than 400% of g.d.p. by the 2050's on the current trend line. that is absolutely and totally unsustainable. our country has never faced debts anywhere close to that amount. the highest we had was about 120% of g.p.d. after world war ii. and health care costs are by far the largest unfunded liability of the united states. the unfunded liability in medicare alone approaches barr doctor $38 trillion. that is the 75-year unfunded

value of the liability. that compares to social security, some $5 trillion in unfunded liability. so the unfunded liability in medicare is seven times as great as the unfunded liability in social security. at the same time we see the number of uninsured to continue rising, from 46 million today to 54 million by 2019. even though the united states spends more than any other country in the world by far, about twice as much per person as any other industrialized country, we are not getting better results. we were ranked last among the 19 industrialized countries in preventable deaths. commonwealth fund looked at the rest of the world, industrialized countries, looked at the united states, and looked at those illnesses

that were treatable where you could prevent death. the united states ranked 19th out of 19. we also in that study show the united states as having shorter than average life expectancies compared to other industrialized countries and one of the highest rates of medical errors. a key reason for that is is we have not adopted electronic medical records, which most of the rest of the industrialized world has. when we look at the baucus plan and the key elements, it promotings choice and competition, reduces deficits and controls costs, expands coverage to 94% of the american people and improves the quality of care. the initial c.b.o. analysis shows that this reduce the deficit by $49 billion over the next 10 years, reduce the deficit by $49 billion over the next 10 years. and over the next 10 years

would bend the cost curve in the right way, unlike any other proposeal before congress. this proposal bend the cost curve in the right way by one half of one percent of g.d.p. over the second 10 years. that means $1.3 trillion in savings. let me repeat that. according to the congressional budget office, in the second 10 years, this prolsal would bend the cost curve in the right way by $1.3 trillion. finally, there is no government-run health care in this proposal, no benefits cut for seniors, no coverage for illegal immigrants, no death panels, no federal funding for abortion services. this is a mainstream proposal that moves us in the right direction. let me just conclude for my

progressive friends who believe that the only answer to getting costs under control and having university coverage is by a government-run program, i urge my colleagues to read the book by t.r. reed, the healing of america. i had the chance to read it this weekend. he looks at health care systems around the world, and what he found is in many countries, they have universal coverage, they contain costs effectively. they have high quality outcomes, in fact higher than ours, but they are not government-run systems. in germany, in japan, in switzerland, in france, in belgium, all of them contain costs, have universal coverage, have very high quality care and yet are not government-run systems. so it is entirely possible to

do the things that i think most of us want to do and not have to have a government-run system. my own belief is these other systems fit the culture of the united states more closely than does those who rely on government-run operations. so it is there for us. we have an opportunity to do something extraordinaryly important for this country. we need to seize the opportunity. mr. chairman, you have given us a good start. >> first of all, i too, too want to applaud you on your truly extraordinary efforts as you systemically have sifted through the intricacies of one of the most sonic issues of our time to identify the path way to quality affordable health care for hard-working americans. it is a real tribute to yours and senator grassley's leadership that embodies once again i think the finest collaborative traditions of this committee, that you have both convened a bipartisan

effort and participated in that effort over the last three months. the on bipartisan effort in this group of six of any committee in either the house or senate, and it was a pleasure to work with everyone, where we debated policy, not politics, in attempting to achieve a consensus that builds upon the best components of our health care system. i like, senator gressly, regretted that those deliberations prematurely concluded. but while we did ultimately reach an agreement, this in a number of facets that good faith effort. the american people rightly expect and are entitled to an extensive, meticulous process that places thoughtful deliberation ahead of arbitrary deadlines given the sheer magnitude of this issue. that is a solid starting point.

but we are far from the finish line. there are many miles in this journey. we have more than 500 amendments that have enormous implication in both policy and financing, not to mention the processes beyond. and at the conclusion of this process, i hope, mr. chairman, that we will have the opportunity to review the final mark and revised c.b.o. estimates on this bill before we move to any final vote. let us recall it took a year and a half to pass medicare to cover 20 million seniors. so we simply cannot address one-sixth of our economy in a matter of such personal and financial significance to every american on a legistlative fast track. the reality that crafting the right approach is arduous in no way on vates our response responsibility to make it

happen. everyone has differing opinions on how to make this happen. yet virtually every person i have encounter unders that whether you have health insurance, and of course those who don't, that the system is fundamentally flawed and broken, and that this is not a solution in search of a problem. there is simply no denying that the trend of rising health care costs, which are expected to double by 2019 is not only leaving one in four americans with inadequate or nonexisting coverage, but is also threatening middle income americans as rising premiums palace their existing coverage at risk the already 81% of working americans are uninsured. recent history is also a prodigious indicator of the consequences of inaction. 10 million more americans are uninsured since the last attempt on reform in 1993.

and over the last decade, according to a recent survey, premiums have searched 131%, more than three times the increases in workers wages. these alarming numbers are but a harbinger of things to come, with average premiums according to c.b.o. recently for employment-based family coverage to rice from $12,680 to $19,000 a year in 2016. it is indisputable that it is fueling rising premiums in a kind of perfect storm that will increasingly rob americans of affordable access to coverage. really what it comes down to is this. either we accept we are on a trajectory to spend a total of $33 trillion on health care over the next 10 years, or we decide we will incrementally reorder 3% to realign today's

misaligned incentives and policies that are driving prices up and driving families and businesses out of the insurance market. we know that simply increasing access would be treating the systems while ignoring the underlying disease. the question is do we discern the most appropriate approach that will low cost to the consumer, to the government, bridge the affordable gap, preserve and expand options and insure that companies actually perform? in thatlet, significant work remains to be done that is critical to the outcome of this legislation. at the same time, to include fundamental components that offer pal ars upon which we can build, reflectioning principles many of us have been adamant. it fully finances reform without deficit spending, and it does so within the health care system. it instead strengthens our

existing employer-based system, and it ends the egregious unfair insurance practices so that no american can be kened coverage, no policy can be resigneded when illness strikes. the health insurance exchange created in this bill can be a powerful marketplace for creating competition and lowering premiums. c.b.o. estimates it could potentially reduce up to 10% in administrative costs, because they believe for the first time more than 25 million americans will be able to shop, compare prices in one place, as insurance companies vie for those commerce and the change will prompt greater efficiency in the marketing and administration of plans.

we developed an exchange for small businesses, designed to reverse the stunning lack of competition for small businesses. for the first time, small businesses and the self employed could access an exchange that would unleash a panoply of small business regional plans, state plans and even plans that would be offered across state boundaries in all 50 states. it is precisely this kind of robust competition that will lower administrative costs that consume almost 30% of small business premiums today. and when larger employers as well as those who are self-insured, both of which also are stretched at the seams due to costs. according to a recent study, are also clamoring allowed to

purchase plans in the exchange, i think it tells me they recognize the effectiveness of the competitiveness that was developed in that exchange in the marketplace. i appreciate that it includes my amendment that would include small business eligibility to up to 100 employees and that would expedite larger firms access to the exchange in the future. an additional cost driver that must be confronted is the costly effects of medical malpractice claims, encouraging defensive medical practices. while this committee is it not have jurisdiction over this issue, it does call for state demonstration programs, the kind that have been extremely successful in my state of maine for the last 25 years. so this would open the door to a more rational approach into this corrosive problem. collectively these measures and others in the mark before us will help substantially reduce the level of cost throughout

the system. however, in and of themselves, they cannot accomplish the goal of affordability and over arching coverage, particularly for those americans below the poverty level. these individuals would face premiums as high as $5,000 in 2016. although the mark provide sliding scale tax credit for those between $14,000 and $32,000 for an individual and other modest premium assistance for those between $32,000 and 44,000, there remain outstanding issues that must be resolved to insure that everyone, whether they are in the exchange or getting employer-provided coverage is able to afford a plap. this is all the more disconcerting given the mark requires individuals to either obtain coverage or pay a penalty. even where there is an absence of affordability. for example, according to

c.b.o. estimates, a middle income family of four making $67,000 a year that isn't under employer coverage would be required to spend 20% of their incomes, or $13,200 or incur a $1,900 fine and have no coverage to show for it. it shouldn't be about incurring punitive measures. it is about our responsibility to accomplish the goal of affordability. consider a family of four earning $44,000 per year. with tax credits on the exchange, this year of the $15,000 cost of an exchange plan would be reduced to doctor 3,748. yet if that same family is offered employer-provided coverage, before they would be permitted to access the exchange, they would have to spend 13% of their income on coverage. this amounts to an almost $2,000 disparity per year for a lower income family.

that is wrong and unfair, and i will be introducing an amendment to scarle the affordability test so that we don't block affordable access and creates unacceptable inequity. >> finally, mr. chairman, let me talk about the proposed schangs of medicade, which is the second largest component in this legislation, presents a challenge of affordability and fairness for our states, given the broad depaps that currently exist in medicade eligibility. from some in the high of the deepest level of poverty to $48,000. moreover, states are locked into in this mark to makeup containing current medicade eligibility standards which

vastly exceed the levels in this bill. considering that burden, in conjunction with the impact of broadening medicade, i can well appreciate the states are truly concerned about the potential for unforeseen consequences on their budgets, especially in light of one study that reports that state's revenues in 2014 will be equivalent to the pre-recession levels of 2007. i understand in my discussions with the governor of maine that they are proposing several initiatives, and i hope well continue those discussions on how to pro as this unfold. given all of these issues, given the gravity of this landmark endeavor, there should be no question that this undertaking demand a painstaking process and the requisite time for full consideration of this spectrum of alternatives and improvements, and to insure the numbers add up in the final analysis with the final

product. we are the only committee of jurisdiction with respect to financing the entirety and the totality of health care reform, and that is why it is so important that we are assured of the final estimates by the congressional budget office. the implications of this legislation are simply too broad and monumental to do otherwise. thank you. >> first let me associate myself with much of what ranking member senator grassley had to say. first, that this issue, being as important as it is, requires an amount of time commensurate with its importance, and that artificial deadlines are ant thet cal to results. it is hard for republicans to make big concessions when there are no assurances they will be respected later in the legistlative process. third, this bill is a stunning assault on liberty, mandating that everyone buy a particular

type of insurance defined by washington, d.c.. senator grassley is right that solutions like reinsurance are preferable to a virtual total control taken by the government. fourth, he mentioned several republican ideas that have received relatively short shift from our democratic friends. for example, real solutions to the problem of lawsuit abuses. the medical malpractice reforms we have been talking about for a long time. which have the important benefit of not only reforming health care, but significantly reducing cost. this should be our mine goal because it is what makes insurance more affordable and accessible. as senator grassley has .ed out. this bill increases costs. it doesn't lower them. the increased spending requires more off sets, which requires more taxes, which are passed on to the very people we are trying to help, and the spiral

continues. this illustrates the essential difference in approach between most democrats and republicans. while this bill would spend $800 billion, off set by taxes and medicare cuts, the net result will be an increase of cost of health insurance and therefore, health care, and a reduction in its availability, especially for seniors. americans, especially seniors, can expect delays and denial, in other words, rationing of health care. republicans start with the premise that at least 85%, maybe a little over 90% of americans have good care and insurance and don't want washington to mess with it. that's the problem that most of the public pib onpolls are reflecting with respect to the popularity of the president's proposal. the problems of cost and access we believe can be dealt with without a washington takeover of the other half of health care, the half not already

government-run. and that you're not doing any favors to people like our senior citizens, for example, by cutting their medicare by $400 or $500 billion. rather than taxing the insurance plans, making insurance and health care more expensive. republicans believe that there are ways to reduce costs and therefore enhance access. let me mention three. why not consider the republican idea to empower small businesses and other groups to be able to negotiate with insurance companies from the same bargaining power that big businesses have with the associated health plans concept? this will reduce cost and increase access. why not also drive down insurance costs by allowing interstate competition. again, it doesn't involve any more government involvement in the process. if there are only a couple of sure remembers in alabama, for, why not allow its residents to

buy poles in surrounding states. we do this with health insurance to great effect. this also will reduce costs. another way to reduce costs is in the area of medical malpractice reform. as ranking member grassley said, we don't need any more demonstration projects. we know what works. look at the state of texas. my understanding is they have attracted 7,000 new physicians to that state as a result primarily of their malpractice reforms. one study shows that over tchr 100 billion a year is wasted because of the practice of defensive medicine. those costs could be eliminated and applied elsewhere in our system with effective malpractice reform. another study showed that 10 cents on every dollar spent on health care is provided by physician for their malpractice premiums. there are better alternatives, and they have the additional benefit of not harming what we

already have. senator kerryy mentioned another unintended consequence of the chairman's bill, the negative impact on life-saving innovation when you tax things like medical devices. whun you tax something, you get less of it the the fundamental flaw in this bill is the taxation of the very providers that we want to take care of our needs. the result is higher cost of care. the complete combofert control through the individual mandate and insurance exchange regulations guarantees an end to innovation in insurance plans. under this bill they become little more than prepaid health administrators for the federal government. and as experience in places like massachusetts demonstrates, when costs soar, rationing of health care becomes the only alternative. this, i submit, is not reform. >> mr. chairman, as many of us

have discussed, including the president of the united states, when we talk about reforming our health care system, it has to include a component of medical liability reform. we know that the practice of defensive medical add by some estimates up to 9% to our health care bills as a country. at the same time we recognize the importance of maintaining an open door at the court house so that people who are legitimately victimized by the negligence of the health care provider can be compensated. but we also know that frivolous litigation and abusive litigation can cause physician toss practice defensive medicine. these excesses increase insurance premiums for physician and as i said, encourage the practice of defensive medical ifment so ward against these exses, 27 states have followed the lead

of my state, texas, in capping allowable total not mf economic damages. among these states, there is no red or blue divide. texas, florida, minimums have all capped non-economic dance at $750,000. california, michigan and massachusetts each cap such damages at $500,000 or less. recognizing the need to reform our medical malpractice laws nation-wide and to follow the lead of a majority of the states, i propose to amend the chairman's mark to encourage all states to adopt a cap of $1 million or less. you will note that is higher than the states i just mentioned. by-laws the $1 million is higher than almost any state's cap, it allows states to craft their own limits.

nothing, as i indicated earlier in this amendment would preempt any state law for providing a total cap of less than $100. i believe that caps of less than $1 million such as the $750,000 in texas are effective and fair. but at a minute, states should limit damages at $1 million. when wrongs are committed, compensation should be paid to shows who are harmed. but we need to arena in the run away jury awards and the opportunistic lit gapts who are abusing our system at the cost of all of us. the federal government in one form another pays, the american taxpayer, pays about one half of our health care in this country directly. and so many senators may wonder why we are making a federal case out of what has here to

forebeen dealt with at the statewide level. i believe this kind of amendment, which does not preempt state law, but provide incentives to states to acopt sensible caps will have the impact of bringing down medical liability premiums. in my state it has been somewhere on the order of 30%. it has always had the beneficial outcome of actually encouraging more physicians to move to our state since they feel like they have more predictability, more certainty, and certainly the cost of their medical liability insurance is lowered. that has had the benefit of increasing access to health care. we know that having coverage is one thing, but having access to a physician who will actually see you and treat you is something all together different. so for all those reasons, i would ask my colleagues to support the amendment which i

believe will have a number of beneficial effects. thank you. >> do you wish to be recognized? >> yes, mr. chairman. i had a question. the senator has describe the amendment as providing incentives to states to enact these laws. the way i read what has been passed out, it says that if you get medicade, you shall enact this limitation. so i assume that the inverse of that is that if you don't enact this limitation, you no longer get medicade. is that what the senator intends? >> maybe i should rephrase it. it does place a million dollar cap on non-economic damages, and it provides an incentive for the states to adopt those kinds of caps. it is similar to other ways the federal government provides an inducement. for example, i am thinking of

adopting driving age at 21 or the like -- >> the way we did that is withhold highway funds. >> right. >> but here you are saying a state's ability to obtain federal med cade funds would be terminated if the state did not enact this law? >> well, my expectation is that it would. if the federal government would enact a $1 million cap, and the states are free to adopt a lower cap. >> i didn't read it that way. it says any state that receives funding from med aid shall enact a limit against non-economic damages of $1 million or less. we are telling the states each state has to enact a law of this type, and if they don't,

then they no longer receive medicade. is that the gist of the amendment? >> my expectations, senator, is that all of them will. >> when they see that kind of hammer. that is a pretty good hammer, i would say. >> we want it to be effective. >> well, mr. chairman, i could not support cutting off medicade to my state. federal funding for medicade is pretty important to a lot of people in new mexico, and i wouldn't to say to our state legislature, do what the senator says or you get no medicade money. that would be a difficult vote for me to explain in new mexico. >> mr. chairman, if i could respond, i wouldn't presume that senator bingaman's constituents would do anything because of what i said. i am asking for support of the majority of the committee and the majority of the senate to do what i think would help.

increased access to quality health care would help health care providers manage what are frequently medical malpractice liability costs and i think bring a little bit of sense to what is the practice of defensive medicine, one that has increased health care costs by some estimates by as much as nine percent. to me, that is why i think it makes good sense and why i would encourage all of our colleagues to support it. >> i am somewhat sympathetic to sledge slation in this area -- legislation in this area, but i do believe the hammer is a bit too heavy, too much of a bludgeon. i wonder what the enforcement mechanism would be if the states would fail to do this. i think having these actions

contingent or medicade is too heavy a price to pay for nonenacting it. it is not appropriate. the penalty is disproportionate to what is intended here. but that is on the substance. frankly, even though this -- you tried to base this provision on medicade, the basic thing is that this is a toward reform amendment. it is essentially a medical pral ma amendment. looking at its totality. and this committee does not have jurisdiction over toward reform, and i would have to rule this amendment out of order consequently. if the senator wants to vote on overriding, that is certainly his prerogative.

but this essentially is a toward reform amendment. therefore it is not jermaine and out of order. >> mr. chairman, i would ask to appeal the ruling of the chair and have a role call vote on that. may i say that we tried to figure through the medicade angle or hook some way to address this in some less direct way than perhaps the gerg passing state toward laws. we could do that and and remove the medicade whom and say impose it as a marry of federal law that the cap shall be thus and so. but i would also be willing to modify it, if it helps, to see if there is some other in sentive to deal with this -- to

deal with the practice of defensive medicine. >> let's revisit this issue during the next hour or hour and a half. a quorum is not precept, so we cannot do business anyway. i can't rule it out of order because that would be doing business right now. we cannot have an override vote because that would be doing business. if the senators wish to make more statements and persuade us to take a certain action when we come back, we can do that. you are free to continue if you wish. >> i would be glad to. i will try when we have a quorum, so hopefully i can convince some members of the committee. let me just briefly reintroduce the amendment d-13. this amendment would mandate any state receiving funds under medicade to limit non-economic

damages to $1 million or less. it would reduce health care costs and improve patient access to medical -- medicine by deincentivizing the practice of defensive medicine. the majority of states, including my state, have already adopted such a cap and have proved that a mandated cap is next. texas' $750,000 cap on non-economic damages has resulted in dramatic benefits. as the "new york times" reported, new doctors swelled the ranks of specialists in texas hospital and brought professional health care to some long underserved rural areas. overall, texas has experienced a 31% physician growth rate. in underserved areas like el paso, the rate has been 76%. the cap has helped lower malpractice insurance premiums by an average of 27%.

this amendment would extend to all states the benefits gained in texas and 27 other states from non-economic damage caps. for those states like texas with caps lower than $1 million, it would have no effect. those existing caps would remain. for states without capitals, it would mandate the adomings of a non-economic malpractice damage cap of $1 million or less. as i said, in my state we have seen the benefits of this. physician malpractice premiums before that had doubled and the number of physician liability sure hers had dropped from 17 to 4. many doctors had left the state or limited the procedures they were willing to perform. these increases in custs and service -- costs caused many to

leave text or limit their services. it required that juries unanimously approved damage claims and set higher standards for expert witness. it has had a crament impact. earlier -- i would like to clarify one of my exchange with senator bingaman earlier. he asked about an innocentive payment in my amendment and argued that the amendment would affect his state's or a non-plinet state's medicade funding. i want to make clear that my language does not speak to an incentive payment. the enforcement mechanism is simple. it makes federal late that state receiving medicade fund

shall enact such a cap. if a state receiving funds should refuse to enact a cap, the cap would be ep acted by the federal government of there are 1 million. this would not in any circumstance result in a medicade cut or an innocentive payment to the states. as i say, if the state declined to act, the cap would be imposed by congress. i would just incorporate by reference the senator's comments about how this committee in the past -- there is well-established precedent under democrats and republicans to use medicade as a jurisdictional hook to act in this area. >> thank you, senator. this is a worthy discussion, medical malpractice. i think i probably speak for many members of this committee.

i heard a lot of people at home over the break raise this with me, more than i would have expected, frankly. and frankly, from my perspective, the more one looks at it and analyzes it, more one realizes we need to act in this area. i don't know exactly what to do, but we need to act. i have seen all kinds of studies, the degree to which doctors practice defensive medicine. it hard to know how much defensive medicine is practiced because all the surveys are self-reporting. i have seen studies as high as 20% of health care costs are because of defensive medicine in this country because we don't have toward reform. on the other hand, and i may be wrong on this, the last c.b.o.

report i saw on this was about .2% of health care costs according to the c.b.o. is due to defensive medicine. that is a very good debate, and we need to try to find the correct answer to it. but unfortunately, this committee doesn't have the jurisdiction to discuss that. we have discussed this, but i think the proper place is on the floor of the senate. i am sure there will be many mend yts on the floor to address this issue. >> can i ask a question? >> sure. >> if the argument you are making is that basically we don't have the jurisdiction over the committee because we are trying to change laws, state laws, basically that would be more the jurisdiction of the jution area -- judiciary committee and that we shouldn't be using medicade.

we are making states change their coverage laws. aren't we doing that? why wouldn't most of the coverage rules in this bill, underlying bill, be out of the jurisdiction and only in the jurisdiction of the health committee and not in the jurisdiction of this committee? >> well, medicade is exclusively the jurisdiction of the finance committee. the health committee doesn't have jurisdiction over medicade. >> but i am talking about changing the rules. we are requiring changing state laws on coverage? >> we are, under medicade. >> not just medicade. we are requiring states to change laws on a lot of things on coverage, on certain minimum plans. the exchange, all those coverage things are state law. >> that is true. but the main point, the paint point is that the thrust of your amendment is medical mal. this committee does not have

injures particulars over medical malpractice. that is the thrust. >> how do we have jurisdiction over changing state laws on coverage? outside of medicade, how do we have -- >> there are conditions to participate in the exchange, setting up an exchange. >> that's right. these witness conditions to be participate -- >> and exchange essentially is tax credit. taxes are in the jurisdiction of this committee. >> medicade is the jurisdiction of this committee. woe gave the -- we gave the hook. >> i have ruled. in looking at it honestly, looking at it as a whole, and we don't have jurisdiction. >> mr. chairperson, ma i ask a question? >> certainly. >> i understand the ruling of the chair, but i'm feeling a little bit like lucy and the football when it comes to the president teeing this issue up

in his speech to the joint session of congress. if this committee doesn't have jurisdiction of it, why can't this bill or that portion of the bill be serially referred to the judiciary committee to report out that provision of it so we can consider it on the floor? >> senator, with all due respect, i think you will find a much more recentive audience on the floor than in the judiciary committee. and i suggest it is your best shot, on the floor. >> mr. chairman, serving on the judiciary committee, i think the chairman is right. [laughter] >> all right. that is the ruling. does the senator wish to overrule? we have done this several times already. >> i would ask for a vote on overruling. >> place coal the role. >> mr. rockefeller no.

mr. conrad, no. mr. bingaman? no. mrs. lincoln? >> mrs. lincoln, no. mr. wide one? >> mr. wide one, no. mr. schumer, no. mr. stab now, no. mr. nelson, no. mr. menendez, no. mr. carver, no. mr. grassley? aye. mrs. snowe aye. mr. kyl, aye. enensign, aye. ply corvo anyone, aye. mr. chairman? chairman votes no. >> mr. chairman, the final tally is six ayes and 11 nace. >> the ruling of the chair is

sustained. senator hatch, you are a good man. >> i thought i would pl you out of this. >> thank you. >> i would call up amendment number c-2 to america's healthy future act of 2009. >> c-2. >> now, the short title of this -- >> it is not on this list, but that is fine with me. >> i didn't hear you, what? >> c-2. >> what in amendment does is it insures americans can keep the coverage they have. this is one of the major points that the president has made over and over, and i think we ought to at least try to help live up to that if we can. that is that if you have coverage that you like, you will be able to keep it under this bill. and yet there are lots of provisions in this bill that

will make it so you can't keep your coverage. so i have a way maybe of helping us be more consistent on this particular level in this matter. >> would the senator yield? >> what was that last word that you used? >> well, i don't know what it means either. it is something i would like to see more from you. >> what does it mean? >> i want you to look it up. you have your blackberry, just get it out. >> ok. >> a capacity to see things in great dimension and time. >> i see. >> i knew that he would set us straight. >> a very, very good word. >> he was born in iowa. >> well, back to the amendment, the purpose of this amendment is simple. if the secretary of health and human services certifies that more than one million americans

would lose the current coverage of their choice because of this bill, then this bill would not go into effect. it seems like a very, very simple but perfect amendment for those of us who have integrity. this amendment is simply trying to safe gordon president obama's ledge to the american people that you will get to keep what you have. i am even allowing for up to a million people, 999,000. it is a straight forward amendment that explicitly tests our committees commitment to the president's promise. let me make this point here. especially in light of our medicare advantage debate that we had yesterday, i have to say i'm very disappointed in this committee for what we did on

medicare advantage. the american people are tired, i think just tired, of promises being made that are simply foresaken based on technicality and nuance. for example, we will not cut your medicare ben physical. that has been said over, and over, and over. but as we saw yesterday, that only happens unless you are one of the almost 10 million medicare advantage seniors, whose extra benefits will be cut. the technicality here being it is not a statutory benefit, it is an extra benefit like vision or denial care. mr. chairman, seniors do not know the difference between statutory benefits or so-called extra benefits. they only know benefits. i think vision and denial benefits, even though they are being classified as extra benefits, are real benefits for our seniors. so we have made this amendment

simple and strayed forward so we can make a clear decision on if the majority supports the president's promise of you can keep what you have or not, no technicalities, no nuances, we all believe that health care reform should not impact americans who currently enjoy the health care of their choice. the purpose of this legislation is to increase our choices, not to eliminate them. and yet yesterday bakely eliminated the choice of 10 million americans -- basically eliminated the choice of 10 million americans. and what got me upset is to say that because we want to keep medicare advantage as it is, it works beautifully, people have better health care outcomes, it actually saves money in the long run, it actually helps people, senior citizens if you

will, but it does cost a little more. but all of those advantages more than make up for the cost, in my opinion. if all of us around the team -- table believe in delivering on the president's promise, we should support it. i thought i would go that far, that if it is less than a million, you can do what you want. but up to 1 million, a million or more, then they ought to be able to keep the current coverage of their choice. and these 10 million americans, ninity-something percent of them love medicare advantage. the reason we did medicare advantage is because the senior citizens were not being helped in the rural areas, among others, and in some of these areas we weren't getting to them or helping them. medicare advantage has given a

tremendous advantage to them. if there are any cuts, the $113 billion taken out of medicare advantage is a cut, or should i say a massive amount of cuts that affect 10 million people in this society, some of the most vulnerable people that i know of. i hope that our colleagues will consider this amendment and be willing to vote for it. i have been very generous in allowing up to or more than a million people to give some leeway to the committee. even that i don't like, but i am willing to offer this amendment on that basis. >> mr. chairman? >> senator conrad? >> mr. chairman, if i ever need a lawyer to represent me if i have a very bad case, i'm going to try to get senator hatch to

represent me, because we -- he can make the best of a bad case of anybody i have ever seen? >> i feel the same about you because nobody can explain it better than you do and get away with what you do. >> that is sort of a back-handed compliment, but i will take it this morning. [laughter] >> well, the reason i gave you the compliment i did is because -- >> you are very kind -- we all know the truth. the truth is medicare is headed for bankruptcy. we all know that medicare advantage is one of the key reasons that that is so, because medicare advantage, which was sold initially on the basis that it would save money, in fact it was capped at 97% of

fee for service medicare. we now have medicare advantage plans that cost 150% of fee for service medicare, and we have a run away train, and it is costing all of those who are in medicare more money to float the boat for those who are getting very advanced and enhanced benefits. we simply cannot afford it. what senator hatch promoted last night and apparently wants to continue to promote today is the false sense to people who are in medicare advantage that we can keep on paying for something that is clearly unaffordable and is going to contribute to the bankruptcy of medicare. now, at some point we ha