captioned d by the national captioning institute --www.ncicap.org-- >> business news from the capital reon. this is "washington business rereport" with abc7 national correspondent rebecca cooper. >> thanks for joining us for a look at business and finance issues here in the washington region. last week, we spent some time with d.c. mayor vincent gray discussing jobs and the relationship with the business community. this week, we are talking to the chief financial officer natwarr gandhi. thanks for joining us.

>>hank you for inviting me. >> what wou you say the statate of the d.c. economy -- how healths the district's government rigight now? >> when you compare it to any other jor metropolitan area, thcity is doing better than any one of them.m. two, like everywhere else, we are seeing in packs from the recession. 2011 the year that we have just finished, the fiscal year, we have done very well. 201212 and 2013, the problems are primarily because of the recession and because of the federal government. of the federal government isn't retren -- the federal government is retrehing. that will have an impact on us. we have a lot of federal

workers, benefit from federal spending. just like maryland and virginia, we will have some impact there. >> the district has instituted several new revenue generators that of gone into effect. is that to try a close -- to try to close some of the gap? >> no, no. it i all for the benefit of 2012 that has distorted starting october 1. >> a councilman has said you cannot tax our way out of this situation. does this city need to do a bebetter job looking at balanced approach to this? there e is only so much or office cado. >> that is correct. i think he hahas a point. we have to look at the spending and increasing revenue.

about 252 milli problem that the mayor facedn 2012 in the fiscal year that just began october 1, the mayor had balanced 60% cuts, 40% revenue. again, what taxes to raise, what should be the balance between expenditures and revenue, i will let the city council and mayor decides. >> moody's has changed its outlook from stable to negative which could be the first step toward a downgrade. there was less of a concerned about how the district is running its financial house and more about the federal gogovernment. is there anything that can be done to avoid a downgrade further questions calcimine evans says we have to reduce spending. -- further qu?

councilman evans says we have to reduce spending. >> moo's and clearly delineated the problem was the federal government. because we benefit substantially from federal spending and procurement, personnel, that we will be affected at the federal level. that is unknown at this stage. the second consideration is what is happening in europe. these two issues, the resolution ofof the sovereign crisis in europe and what is going to happen to the federal budget here what the so-called super committee will decide in terms of cuts will have a major impact on the district, maryland and virginia but there is very little the district can do about that. >> how do you prepare for that?

>> we prepare for it. we have substantial rainy day funds. about $340 million. we also prepared contingency planning. at thehe same time, we keep checking the revenue. every quarter we have estimate we adjust our expenditures accocording the. my obligation is the mayor, the council, the taxpayers at large will not generate deficits. i can do 100 things right, but the day i go before the mayor and the council when i do not have a balanced b budget, i am out of a job. >>here are some bonds in the road. one of them could be the all hands on deck backpay issue. is the city in a position where they can write that check? >> we wiwill provide for .

if the decision was made at the mayoral level, we would find money for that. in a budget of this complexity this sizize, county and the c city, municipalities, and the school district all combined into one we are spending in some areas under-spending in other areas but at the end of the day we balance the budget. >> r-tes going to go up any further? -- our tax is going to go up any further question -- are taxes going to go up any further? >> they will try to find a way not to do that. whatat did they will be compelled to do is difficult for me to say. >> thank you for joining us today. i appreciate you talking to us. after the b break, we are going to

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her company to create children to great thinkers. welcome back. you have a long background in washington d.c., which your production company but you focused on theconomies of africa. this is a different direction. you are already getting great reviews. what is the idea? >> the inspiration for it really started with a d.c. p public school teacher who had thisis wonderful curriculum of connecting children to great thinkers throughout history. 8 give the kids such a rich experience and it really -- it gave the kids such a rich experience and it really inspired them. >> this whole company is kind of a much in the model of baby einstein for the elementary school crowd. what were some of the hurdles at you faced as a a business woman trying to get this off the ground? >> oh, g goodness, there were so

many. we finally decided we were going to go ahead. we had a concept that we thought was great and was going to sell. with the people wanted this. -- we've thought that people wanted ts. >> you have to have the confidence to put on hold projects thapay and do something that you believe in. you are hoping to turn this into an entire line of products for kids. whatat are you trying to getet across to both parents and kids? >> it features an adventure of artists from a to z. >> i love the fact that here it is, a d.c. production company highlighting the work of the d.c. public school teacher. she is not in the film. but this is a compy that is

going national and has do well internationally. what are your hopes? are you really focusing now on kids and learnining. >> i i think i am just becocoming a dual personality business rson. >> one of the things ias curious about from a production company point ofof view is you are doing something with l lots of well-known artists and painting. was licensing a dauntining task? >> yes it really is. we made sure everything was in the public domain. it is unfortutunate. >> there were many things that you were not limimited to do all on your own. help uout in terms of envisioning the size of this producon. w many people did it take? >> there wererobably two dozen people that worked on the

production se of it but the were more than 40 kids that acted in the film. it was really a great experience >>hat is your marketing plan? you are going to be showing it at the european film festival. how are u going to be getting the word out about this company? >> when yoyou have a young child you do not want a corporate feel. our biggest opportuniorty for success really is a word of mouth. we are hoping that people will see the film, love the film, and go out and t tell all of their friends. >> carol pineau, now you are focusing on kids. is a terrific dvd. thank you for jojoining us on "washington business report >> they with us. after the break, our roundtable on the i inner workings of the most powerful committee on capitol hill. stay with h us.

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from warehouse to your house. vo: freight rail businesses across this country rely on it. safe. reliable. efficient. affordable. it's the engine that hauls our economy. driver: coming soon to an appliance store near you... with the help of freight rail! >> there is a new study this week from a research center that shot a sharp decline that coincided with the downturn in 2000 it. it showed a strong correlati between economic distress but bucking thatat trend is jonathan allen. he and h wife stephananie are now the proud parents off young asher allen. congratulations. we bring this up because johnson

is here today on our panel to talk about the superommittee and the inner workings on how that will work. along with johnson is doug fruehling who has a story -- along with jonathan is doug fruehling. thank you both for being here today. we appreciate it. let's start with the district. mayor gray istarting to feel like -- sound like he is on damage control. >> he is going on the offensive. he itrying to get the point that his administration is doing something despite all the scandals, trying to say y there is substance and they are moving aggressively. he is taking that message t to the business community. >> is what he is saying fair to say that we have not paid enough

attention to accomplishments because it has been scandal after scandal after scandal? >> i wrote a column this summer to. i do believe tre is some substance there. he is missing the communications aspect of the job. but there is substance and he is coming up with a strategy and holding it a that is what the business community wants. >> in the article, does point ouout several projects that arhave broken ground or others that are close to completion. at the same time, he has just raed income tax on the highest income tax bracket. they are looking at changing the way you do the fee pay whwhen selling real-estate. is --s it a mixed bag of how successful he hass been? >> well, the things that you

mentioned -- heigneon to but it was more of the c council doing that. he did supportrt raising the income tax. the real-estate tax has not happened yet so i doubt will see e that. in a recession when the city is hot, as long as you are getting permits and as long as a handful of projects are moving forward which they are, and he is saying we cannot do everything, if he can do that, he will be successful. >> what kinds orx is the business cmunity giving the mayor? >> they want permits, jobs. thyscandawise, they are giving him an 'f'. >> definitely seems to be on the offensive trying to regain

the message. >> f frankly, that is a very good thing. >> let's change gears now to the super committee. >> fedederal workers. >> absolutely. i read to your introduction to each of the members. when you bottom line wch each one's priority is, none of them seemed to line up really well. >> each of these members have different priorities, prerogatives, different things in md. some are worried about the regular legislative committees that they serve on. others are working on a broad sweeng reforms. some of them have their own individual political careers to think about particularly to t the balance beeen trying to cut a deal or being a real player vs staying true to your party's ideals and perhaps accruing some

credibility with your lleagues for leadership. there are always cross-cutting interest it. >> grand compromise probably off the table at this point? >> in terms of anything the president is approaching, you will not see that are around thanksgiviving. 8 is possible they could decide to make a deal that then prescribes another expedited process whether it is another super committee or kicking work ov to other committees. it is possible that you will see a framework like that. whateverer the numbers are probably more spending cuts. whatever the numbers are, you can see a second part of this process. >> they are working under the threat of these triggers. senator mccain has indicated he would like to eliminate the

defense trigger. doesn't that mean it would take away the incentive to do anything? >> i think what is happening here is you are going to get an argument from the defense department that across-the-board cuts to the defense department that would h happen if the super committee does not act are bad for the defense of the united states, and the things that the super committee might consider would be bad. i think you are going to see the state department make similar arguments or somef its allies. they have a long time interest to look after the defense industry. interestinglgly, the health-care industry. a lot of folks would rather see automatic cuts take place then this process work because they will get burned less by across- the-board cuts. there are so many crosscutting issues. i would say this.

i think they will get something done. >> is there a sense of from the people on this committee that the gravity of what they need to get done -- the ratings agencies have been pretty clearhat there nes to be substantial changes or we could face further downgrades potentially. is that ear on everyone's minds for the economic play out of how this works if they do not do anything? >> most members have i think a belief that something needs to be done on the debt. i also think at for most of them, they would like to get something done because their own personal reputations are a stake here. they are not the first group. there was the biden group working on this. several groups. i think those folks in

particular do not want to keep failing. >> so, fasten your seat belt and see what happens. i want to bring you in here real quick. how closely is the washington area watching this process? >> everyone is on edge. goininto next year, you are on edge. you cannot make business decisions when you do not know if you are going to have a contract nt year. you mentioned the downgrade. va., d.c., and maryland are looking at possible downgrade because of the cuts because so much of their econies are tied to the federal government. >> a lot of waiting to come. still with us by. after the break, we will explain our number of the week. 38.5.

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>> hang on to your wallet for the number of the wk especially if you live in maryland. 38.5 -- we are talkingbout cents pegallon, and it is the amount of state tax that you will end up paying. if maryland goes along with a recommendation of a state panel. currently, the gasoline tax is 23.5.5 cents per gallon. we are out of time. thank you for j joining us. we hope to see you again next week.

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