some have criticized paygo o!or exempting the extensions of current policy on middle income tax cuts, the estate tax, the alternative minimum tax, and the doc fix that helps seniors see their medicare doctors. i understand that criticism, but -- but it neglects the fact that a paygo law without those exemptions would simply be waived again and again and would become toothless. congress has to face current -- strong political pressure to go even further than the current policy exemptions in statutory paygo allow. simply enforcing paygo as it now stands, let alone taking paygo further, will continue to face strong challenges from both sides of the aisle. it is essential that we move from the attempt -- from the temporary extensions to permanent solutions, but we cannot consider those solutions without taking into account all long-term fiscal challenges. firm -- permanent solutions for the estate tax, amt, and the doc fix it should be devvloped in the context of he broader budget agreement that i will discuss shortly

paygo often means, on the zeyno, policies we like.d for that very reason these decisions are not often reported. they're like the dog that did not bark. and all those bills that never see the light of day because we cannot see offsets for them. they are the decisions committees make to scale back policies they want to fit with the savings they can find. as majority leader, i see the impact of paygo every day in ways are -- that are not always apparent to others. members come to me and to other leaders that -- with bills they want to bring to the floor. every day i asked, how are you going to pay for it? and every day we say no to more spending. for instance, in the american jobs and closing tax proposal outsourcing act, we found offsets for many who were initially advocated for deficit spending. disaster relief, a supplemental grants that create jobs because paygo requires us to do so. another power of the paygo is the way bush and other legislators treated health legislation. president bush led paygo laughs and then signed a prescrip

. >> pago, which has a corning name, but is substantive -- paygo, which has a corny name, but a substantiveit is everything except for the money that is provided for the troops in iraq and afghanistan. the banking bill will also be a huge amount, $10 billion to $20 billion over a time frame. the gravity of in the government ii such that people are saying that they want to balance the budget as quickly as we can. i think what the president set out for, $700 billion over a term from four years is a pretty good one. the courts what has caused the coulter change? why are we at the point where the coulter shifting? -- the culture is shifting? >> i think that the fact that other countries are having problems with their debt accumulation brings it on to us. we normally easend of naturalisc might happen to greece today and it can happen to other countries. >> you have participated in some of the big budget deals in the past 20 years. 1997, for example, was probably the last big deal that was bipartisan and made big cuts in the budget. since then, there has not been any substantial bipartisan deal.

do you need more reform beyond statutory paygo? that is really a small issue. >> process is important. there were many that derided does instead of dealing with the substantive issues, but when we got to the end of the money and the budget was balanced, they realize that the process changes, the cap on defense as well as non-defense, the sequestration enforcement mechanism, paygo -- all of these things had a salutatory affect. you want to take a close look at the budget process before we do our work as a commission. >> let me pick up on the recision concept because i know you support it. it is another way of getting out of line item veto, more or less. -- at a line-item veto, more less. many of your colleagues are concerned that it gives too much power to the executive branch. talk about how you got comfortable with it. >> i have dealt with this in several different forms 1520 years ago. the last time it came up, i tried offer an amendment to the republican's line-item veto, saying that this is likely to be found unconstitutional.

already taken -- freezing domestic discretionary spending for the next three years in my budget, passing paygo, setting up the fiscal commission to tackle issues like entitlements long term -- many of those decisions are comparable to some of the decisions that have been made by those promoting fiscal consolidation. i think this is an issue where there is violent agreement between the parties. we have to make sure that we're not rushing to the exits to quickly and all at the same time, but we have to keep in mind that debt and deficit levels that many advanced countries have right now our unsustainable and have to be dealt with in a serious way. with respect to north korea, our main focus right now is the u.s. security council making sure -- the un security council making it crystal clear acknowledgement that north korea engaged in belligerent behavior that is unacceptable to the international community. the united states participated in the investigation that was conducted around the south korean ship. our experts concluded that north korea had carried out an attack consistent with south kore

the final point i will make is that all of this discussion about takeover rigid -- paygo, if nothing changes, the winner is wall street. derivatives will be unregulated. responsible capital requirements will be set aside. and the winner will be wall street, not main street or the american people. i would have preferred the first proposal but i think this proposal pays for it and does so in a way that is recognized by the congressional budget office as appropriate because of the paygo rules. >> there is a strong emotional response we have people who fundamentally disagree with this legislation and opposed all idea of the kind of reforms. that is a legitimate debate. their ideological differences, and i think everyone of us at one. another, if we could write the bill alone, we would probably write a different bill. but we write it in a collegial fashion here taking into consideration various interests and concerns of our constituencies with a goal in mind -- to come up with a solution that avoided the kind of collapse. we did so in a way that was painful to people. i absolutely agree w

term fissal stability and under the speaker's leadership, we have adopted a rule three years ago on paygo and make sure we pay for what we by and we put that in statute. we are moving for long-term fiscal stability and short term, creating jobs and getting this economy moving. >> did the republicans oppose the energy legislation? >> senator mcconnell said he was against an energy tax. he did not say he was opposed to energy legislation as such. i may speculate that he is. >> whatever it is, the fact is, countries recognize that the country that is the head in the grain economy will be the nation that leads the global economy. he said we want america to be that nation. you cannot ignore the fact that we ave an environmental challenge. this is a national security issue, it is a jobs issue. it is something we have a responsibility to do. how works out is a matter -- it how it works out is a matter of legislative process. we [unintelligible] is a debate that we welcome and this event shows so eloquently the need for us to have a new energy policy. the deeper we dig and go all the way into the

that leaves us with $14 billion that we have to raise to meet the house paygo requirement.ropose to do this and we work with the ways and means committee. they have assigned to us for these purposes money that comes from increased exchange trading of derivatives contracts and as $1.3 billion. the rest we authorize that the fdic -- this is not to go to the general revenue but to offset the cost of this bill -- to use what we originally used for our fund. we are authorizing the fdic over the five-year period to assess financial institutions over $50 billion in assets, heads bent -- hedge funds over $10 billion. there is a risk matrix which says that the ones who are involved in riskier trades will pay more. we will get to an amount of about $15 billion. the cbo gives you -- you have to raise one and 1/3 to deal with revenues. the fdic is mandated to raise up to $19 billion. we don't believe they will have to go that far. that is about a little less than $4 billion per year for the wealthiest financial institutions or roughly their bonus pool. perhaps a less. we think the rati

it was not part of paygo but we talk about austerity and germany.ic unemployment benefit goes for two years. the difference is, they have chosen to pay for it. they made the decision that this is important and they will pay for it. they have higher income taxes than we do. they have a different model where they do believe we are in this together and they will not believe -- they will not let families fall into poverty because of a general economic decline. host: can you stay for a few more minutes? guest: yes, germany is a good example for us. you cannot compare them to the united states because the model in germany is you are paying people to stay on their jobs. the government subsidizes their income so they are on the job, retaining their skills and ready to go back to work. this is a great concern from an economist looking at this. what is happening to americans who are this long unemployment? we have a record number of americans who are considered long-term unemployed. every day that they remain long- term unemployed, they become less employable

wheat has the statutory paygo and require mandatory spending to be paid for. the established bipartisan commission now and work to make recommendations to bring the deficit down to a sustainable level by 2015. the president is also propod to freeze long security discretionary spending for three years. last monday introduced a bill to add to the additional tool called rescission that allows the president to sign a bill into law at the same time recommending to us and the congre elimination in the bill that have a budgetary cost. we will continue to pursue these and other steps for fiscal responsibility so that over the medium and long term we put the nation on a fiscal path to provide a foundation for a strong economy in the future. at the same time, the key concern and short-term remains the economic outlook. as we continue to work on additional legislation to address the situation we are fortunate to have chairman bernanke here to present his testimony and respond to questions. most fundamental and at a time to many americans continue to feel the effect of th

. >> we put in paygo as the chairman touched on earlier, to get to that point. you have outlined some of the-- and this may not be something you can deal with but i think it is important to say at this meeting, because i've talked to a lot of community small bankers, a lot of small-business people, a lot of developers who are really frustrated. they are frustrated because they see a need to do something but because of certain regulations they are being told whatever the value of that real estate they had is now 300, and many are cashing it in. i really fear, if we aren't very cautious in what we do, we are going to wind up with a few large builders in this country, more big banks, and fewer people to get involved in local lions clubs, boy scouts and girl scouts, the things that make america what america is and as you said, and i hope you remind them that it is these people we have to make sure we get credit to our small-business people in america. that is not flowing yet i don't think in the way it needs to. >> i absolutely agree. i think there are some signs of