sam and chairman bernanke? [applause] >> hello? chairman bernanke, i am delighted that you would do this. by the way, what do you think of the great wall of china? >> can see it from the plane when you come down from beijing. very impressive. >> that matches mr. nixon's statement. let's get to substantive matters. we seem to be in a recovery from the great recession we have gone through, fragile but it may be. hull convinced are you that that recovery will continue at a reasonable pace? do you see troubling signs we may indeed slip back into a double dip recession? >> we have gone through a number of stages. we have a tremendous contraction, a deep contraction, after the financial crisis intensified in 2008 and early 2009. the stabilized in the middle of last. last the natural business cycle process began to read -- on wide itself heading toward recovery. the recovery probably began late last summer and we have been expanding, this is the fourth quarter of expansion that we have had. at first, the expansion was caught primarily by

good morning, a german bernanke. -- chairman bernanke. you testified at our first meeting. at our second meeting, we received testimony from dr. carmen reinhardt at the university of maryland. she has come across with the conclusion to her study that when nations have eight to of somegedp ratio percentage, that will not work. in the united states, we have actually received negative economic growth at those points where get to gdp is 8%. debt held by the public is closer to 60%. are you familiar with the professor's study? are you familiar with her conclusions? the you agree or disagree? >> i am familiar with her steady. i would say that her book is an extraordinary piece of work. it includes analysis of the crisis. i agree with the general point that as debt increases, interest rates increase. it tends to make investment more costly. tax rates go up. >> specifically, growth in debt to gdp of 9%, -- 90%, to you think it is a tipping point? i think that if we were to go out, that debt and interest payments will be explosive in 10 or 15 years. i think we should be paying close

bernanke.is responsibilities taken from the capitals of europe to the great wall of china, from wyoming to many places, it illustrating the interconnectedness of the 21st century global economy. prior to his government history, he was a professor of economics and public affairs at princeton university, serving as chair of the economic department from 1996-2002. he began his academic career at stanford business school before writing at princeton in 1985. received a b.a. in economics in 1975 from harvard university, summa cum laude, and a ph.d. from massachusetts institute of technology. he and his wife have two children to report in georgia, he grew up in south carolina. the format tonight is not for a speech by dr. bernanke, he and sam donaldson will provide the program. sam will interview the chairman. i would ask the two of them to come forward now and after the interview we will ask questions from the audience. salmon chairman bernanke. -- sam and chairman bernanke. [inaudible] >> hello. i a

bernanke.>> thank you mr. chairman. chairman bernanke thank you for being here today and the hard work you are doing. when you testified in front of this committee a year ago, almost to the day, the economy was still in decline, grossed a mystic product decreased by over 6% and they were shedding about 500,000 jobs a month. i know we talked about this several times. today our economy is growing at a rate of 3% adding almost 300,000 jobs in april. that is a significant turnaround. however, in places le my home state in rhode island, which ntinues to have one of the highest unemployment rates in the country, 12.5% rate right now, finding jobs continues to be a top concern for me and my constituents and thother is, the other issue is the federal deficit and i know these have been-- here this morning. my question is built on small business job creation and i do want to address the deficit. small business is a key economic driver particularly in rhode island which we have 97 or 90% of our businesses

bernanke.they talked about the current economic situation and what the fed chairman sees happening in the future. the woodrow wilson international center posted this 50-minute event. >> david was president of the carnegie foundation. he is one of the great humanitarian ends in this country. there are several former colleagues that i want to introduce. andy ireland, congressman from florida and his wife nancy. [applause] i will test your knowledge of politics a little bit. we have a former vice presidential candidate. thank the right year was 1976. he was the vice president for ronald reagan when ronald reagan ran for the presidency, dick end clare schweitzer, would you stand up? [applause] he was the senator from pennsylvania and also secretary of hhs a few years back. we are heavily loaded with pennsylvanians. tom ridge is here tonight. we are delighted to have a governor here. [applause] the former secretary of the department of homeland security. i want to introduce two people who are very i

bernanke, this is not a widespread concern among the government. you did mention one regional bank president. the other thing i would say is that it is a problem. it would be in order for thee gentleman to offer an amendment to cover the banks. why do you shy away? on the fed governors, would you give me a list of governors that hold that view? i don't know any governors that do. >> as i say, my intent here -- the amendment is not going to pass. i raise it in the hopes that as this moves forward, if this is not the method to deal with it, we need some other methodology to overcompensate for the effect this is going to have on the marketplace. >> i agree with that. >> i withdraw the amendment. >> the question is on making the offer of title to to the senate. all in favor? all opposed? the offer is extended to the senate, and our senate colleagues are trickling in. we will now await -- i understand the senate is going to present a counter offer not on this, because they just got it. we will now -- it should we recess? we will take a recess and we wil

ben bernanke. when the 111th congress began, when the president took office, 1.5 years later, the economy has experienced its third straight quarter of economic growth, including 5.6% growth in the fourth quarter of 2009 and 3% growth in the first quarter of 2010. there is a chart to illustrate that. 1.5 years ago, the economy was losing jobs, hemorrhaging jobs. morrhaging os the d and debri to thousand nine wels79,00 , e moh alon noin play ade narly a million bsbetween january and maof tis ye athe cha ows the jo growth the last span of tie. he uim the actions taken by this congress and this the administration also played a significant role. there was the recovery act, which we passed in 2009, and that has contributed to significantly to the economic turnaround, raising real gdp to 4.2 percentage points in the fourth quarter of 2010 and increasing employment between $1.20 million and 2.8 million jobs. the fedeeal reserve nd the fdic have engaged in an unprecedented and coordinated efforts to stabil

bernanke, we heard the same thing. growth in this count and speing anit'sot to be stoppe they don't offer tolutions but it's a very simple solutio you don't spend what you don't have. was nbe19 ofnids on my mate granotr's side. the good german rm woman that she was. she had a sple sayingthose who go borwing goes a sorrowing. she de sure all9 of us underd that. you don't end what you don't have. and we cannot spe o way out of this mess. we're going to be doing that alle're doing right nownd we have beedoing is mortgaging the fu of the next genetionf americans. and you know, the questionn you talko parentout there and say, are your kids gng to be bettef thou are, and mo pares don't believe it. hey ink their kidsre going to have a harder me of it than they have andhat's a d sign for america future. mrs. luis: will theentleman yield? mrlatta: i yield to the lady. mrs. lummisyou know, the art that i havto my left, the viewers' right, isxy illustrating what the ntman s just beeniscussi if loot the spread tween spendg d tas t

about a month ago i had our chairman bernanke before us in the joint economic committee and we talked about the fact that we need, really, we need to help small business. small business is really where the hiring of america happens. and so if they are ailing, then there will be unemployment. so i really believe in this bill. i thank those who have worked on it. and i urge a yes vote on the underlying bill and on this amendment. and i thank you, madam chair. if there are no further speakers i yield back the balance of my time. the chair: the gentlewoman yields back the remainder of her time. the question is -- the question is on the amendment offeree by the the gentlewoman from california, ms. sanchez. so many as are in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it. the amendment is agreed to. it is now in order to consider amendment number 14, printed in part c of house report number 111-506. for what purpose does the gentleman from texas seek recognition? mr. cuellar: i have an amendment at the desk. the chair: the clerk will designate the amendment.

bernanke was asking us to address. and if we do not, we'll put our country in terrible financial straits. so we talked about a number of alternatives. one is americanroadmap.org, which is the ranking member of the budget committee, paul ryan, which is very comprehensive. it would have a slow glide path to bring both our deficits and our debt under complete control and do it without raising taxes and do it without affecting the social security or medicare benefits of people over age 55 or 56. the problem is, the longer we wait, the more out of reach that type of strategy becomes because of the enormo crowding out of our budgets that will happen by interest on our national debt. consequently, we need to address the paul ryan proposal sooner rather than later. even under the paul ryan scenario, when compared to our economy, the budget cannot be balanced and the debt cannot be eliminated until the second half of this century. so it takes over 40 years, given that scenario, to balance the budget and eliminate the debt. howe

but we come back ben bernanke will be testifying before the house subcommittee. we will be right back. ♪ >> no candidate in this race, democrat or republican, has given more opportunities to rest questions and see what he is made of. >> faces that you see every day, see some of their early television appearances at the c- span video library. one quarter century of political history. you can search by name, title, at issue, interest group, and more. all for free online. >> we have three new c-span books for you. abraham lincoln, the supreme court, and who is buried in grant's tomb. to order, go to [unintelligible] c-span.org -- 02 c-span.org /books. each was a great gift idea for father's day. >> "washington journal" continues. host: the congressman is the vice ranking member of the president's bipartisan deck mission. federal reserve chairman, ben bernanke, will testify today. what do you want to hear from him? >> i think that what we want -- guest: i think that what we want to hear is that america wants to get serious about the spending crisis. we have seen what

ben bernanke offered that outlook today to congress. >> although the receipt fall in equity prices and weaker economic prospects in europe will leave some imprints on the u.s. economy, offsetting factors include declines in interest rates and treasury bonds and home mortgages, as well as lower prices for oil and some other globally traded commodities. >> sreenivasan: the fed also issued its latest survey of regional conditions and showed modest growth in all parts of the country. that hasn't happened since the end of 2007. the economic news sent wall street higher for a time before a late-day drop. worries about b.p.'s future sent energy stocks lower and the selling spread across the market. the dow jones industrial avenue lost more than 40 points. the nasdaq fell more than 11 points. president obama warned today the situation in the middle east is unsustainable. he met with palestinnian president abbas at the white house and said israel needs a better approach to its three-year blockade of gaza after last week's sea raid that killed nine people. the president also announced another $4

additional layer of the 10-person financial council, which is a combination of regulators, including ben bernanke, including tim geithner and so forth, creates a situation where things can be dropped. we all know from working in different companies that the more meeting you have, the more people you get together looking at other details, the less potential there is for thoingz get done. i agree with him on that. and it is good that there's a way to resolve potential failure in investment banks, or in insurance companies and the like. the problem is that right now the biggest institutions that still trade a lot and still carry enormous risks and assets that they themselves evaluate because there is no objective means to evaluate them, are a bank of america combined with merrill lynch. goldman sacks is now a bank holding company. so it's under the purview, but it is still a company that takes on a lot of risk and trades quite actively in terms of its own profitability-- 80% of its profits come from trading. morgan stanley is a bank holding company. so what's happened in the last two years, is we ha

president obama voiced confidence today after meeting with federal reserve chairman ben bernanke. >> senators hopefully on both sides of the aisle recognize it's time we put in place rules that prevent tax payer bailouts and make sure that we don't have a financial crisis that can tank the economy. i think there's going to be enough interest in moving reform forward that we're going to get this done. >> sreenivasan: on another front the top economic officials at the united nations called today for less dependence on the u.s. dollar. they said the global financial crisis exposed the danger of relying entirely on u.s. monetary policy. the u.s. supreme court has reaffirmed a ban on unlimited giving to political parties. the ban against so-called soft money was a key part of the 2002 overhaul of federal campaign finance law. last january the court allowed corporations, unions and other groups to fund federal elections. the republican national committee unsuccessfully argued political parties should have the same rights. tropical storm alex has forced crews in the gulf of mexico to halt t

how quickly you forget that it was president bush and secretary paulson and ben bernanke, appointed by chair of the federal reserve, that asked for that bill and that your leadership, for the most part, supported and urged its adoption. so with all due respect, it was president bush's administration that asked for that bailout, not democrats. what democrats did when they said there was a crisis acted in a bipartisan way to respond to that crisis. very frankly, i think we precluded a depression. americans have an obligation of responsible borrowing. but financial companies also have a responsibility to make loans fair and transparent. by creating a consumer federal protection bureau we can ensure that both sides live up to that bargain. the consumer financial protection bureau will strengthen and modernize the oversight of wall street by putting the functions of seven different agencies in one accountable place. it seems to me that that would appeal to people who want not so many proliferation of various agencies crossing one another. in addition, corporations like a.i.g. and lehman bro

and we've had meetings with the federal reserve people, including chairman bernanke, we've had meetings with people in the o.c.c., and from the fdic , we've had a number of meetings. and what we hear from people who are trying to borrow money to stay in business or people that have had lines of credit at their local bank for 20 years are now being told, we're not going to continue your line of credit. and when they ask, have i ever been late, have i missed a payment? what is the problem? well, our banking regulators have told us that they're going to be all other our bank and we can't handle the pressure -- all over our bank and we can't handle the pressure. if we keep loaning you money, extending your line of credit. when we versed that subject with chairman bernanke, that some of the regulators are requiring more capital and more money in reserve than is required under the law and they're putting pressure on the bank not to make loans that they've made for years and that it's loans that make banks most of their money and if you don't allow them to loan money then they're not going it

ben bernanke said no. so they added an amendment. this is about finance reform. something the media does not relieve report on. he said that there was no bipartisanship. 62-37. they had no problem there when it came to the fed. no problem whatsoever with bipartisanship. you might want to comment on that. i do not think the people give us the real story ever. host: lots of people are mad at washington because of the bank bailout. because of the -- guest: lots of people are mad at washington because of the bank bailout. because of the tarp. big banks did not have to fend for themselves. when people voted for members of congress they felt that if they did not bailout the banks, if they did not provide temporary funding that to cover the troubled mortgages that were causing meltdowns, the economy would get worse. 85% of the money loaned to the banks, it is still difficult to explain why he did that. ever since there has been a lot of agreement on both sides of the aisle that the federal reserve should be audited in congress and that there should be oversight. that is

bernanke finally decided that it was time to use the authority. the fact is, for all the talk we've heard here, 12 years of republican rule, zero legislation to regulate fannie mae and freddie mac. the bill has passed. the gentleman from alifornia tried to tighten uppand toughen the mr. oxley's -- tough and a mr. oxley's -- toughen up mr. oxley's bill. paul volcker says that sweeping financial reform legislation before congress would make the u.s. a model for tte world. "the u.s. would go from laggard to the parade if we get this legislation passed." i am glad thereeis a chance of getting international acceptance for the basic principles. he expects this to produceeof coherent legislation of package3 be helpful and i would say to my friends from tennessee -- i do not know why he said there was nothing in heee about mortgages. some tough regulation to ban the kind of irresponsible subprime mortgages we tried to get banned before but >> this is the largest rewrite of the bill since the great depression. work on the bill resumes tuesday morning, incl

bernanke finally decided that it was time to use the authority. for all theetalk we have heard here, 12 years of republican rule, there was zero legislation for fannie mae and freddie mac. in two years of democratic rule, the bill was passed. finally, i want to introduce into the record an article in "the new york times" in which paul volcker says of that "sweeping financial reform before congress would make the united states a model for the world. the united states will go from less to the head of the line if this legislation is passed. i am glad that there could be international acceptance to the basic principle. i have the impression that it is on a very good side pat. -- syed path --side path? -- side path."my time has expir. >> can i ask the gentlemen -- >> know. my time has expired and there are a lot of members here. it is now the gentleman from illinois five minutes. >> the senate does have just started. do not be insulted if weewalked out on you. [laughter] >> senator, never apologized for leaving. [laughter] that goes to any member. i ha

highlight what trspired yesrd in the budget comtt, in the hearing by federareserve chairman ben bernanke. ithat hearingwhichad the privilege of queioning the federal serve chair, i thought he highlighted somvery imrtant measures that our nation shouake no a this congress mu take note o the federeserve chairman pointed out that currently our dget deficit here in the u.s. congress, in his rds, inot sustaible. eeder rveirma eay articulated that we ne restraint and right now unless the federal governmt gets the control of its enormous budget fici major probland conseqnces ll occur to our natnal ecomy. the ral reserve chair pointedut to als right now at although a federal budget deficit of hundreds of billns odolls,r in our case right now, trillionof doaright be in the sho-tm if there is a x over te lo-ter it will seriously damage our nation's onomic growth prospects the federal reserve air, whe ked him, pointed out tat perps a budget deficit of about $0 billion could be sustained. we are of coue looking today at federaludt deficit well inxce of1 trillion with no endin sigh d wh's en more tro

the other commissioners are clark kent ervin, grant green, bernanke, katherine schinasi, and others. the commission met in this room on private security contractors in iraq, and we may talk about afghanistan but this is in iraq, whether they might be performing inherently governmental -- or the office of management and budget is presently preparing new diagrams on the finding of an apparently government, closely associated, and critical functions which need close oversight of private contractors. we're looking into that as part of our overall mandate. besides that mandate, this hearing has special silence. they're about 19,000 contractors in iraq, 14,000 under department of defense contracts, and roughly -- precise numbers are a challenge -- 5000 work for the department of state and the u.s. agency for international development, for usaid. the massive drawdown of u.s. forces in iraq aims at cutting our military presence to less than 50,000 by the end of august this year, and the zero by the end of 2011, obviously next year most of the security duties currently executed by the u.s. mi

after that, federal reserve chairman ben bernanke at the woodrow wilson international center for scholars where he is interviewed by former abc newsman sam donaldson. on "washington journal" tomorrow morning, we will look at tuesday's primary races in 10 states, with bob benenson, nicholas lardy examines china's economy and its effect on the u.s. and more about the supreme court nomination of elena kagan from jliulie hirschfeld davis. we have got three new c-span books for you. "abraham lincoln," the supreme inrt" and "who's buriedn i grant's tomb?" to order, go to c- span.org/books. each one a great gift idea for father's day. the campaign for america's future began its annual conference in washington focusing on the progressive movement assessment of the obama administration and its role in this year's elections. this is a little more than two hours. [applause] >> welcome to america's future now. [applause] hi. you are over here. namecards. my name is robert. i welcome you to washington. this has been a city of great heat and big storms recently and i am not talking about the weather. a

even fed chairman ben bernanke says this budget is, quote, unsustainable. facewithimilar challens in your rsonal budget, thee is talk aund the kitchen table, the children's allowances would be cut, alongith many oer uxuries. its that discussn the undethe theory that if they ignore it, it mighto away. ortunately the debt will n go away. thpain will traferred for our children and grandchildren in the hopes thathey will ve the guts to face realit i yield back. the speaker pro tempore: at purseoes the gentlelady from ohio rise? without jectn. ms. fudge:hank y, mr. eaker. mr. spea congress must decide wther to protect the interest of a few deceiv banks who ruin the industry for otrsr t protect the hardrkg americans ofhis nation. usdemoats have already decided, we dided to choos main st ove wall street. we hav decided tohoose pares o want t their chiren and fr people who are saving for rement. havided, mr. spker, that the americanple e more important thane overalous bankers. mainining the status quo is t the answer. look at what the current situation has done fr

the chair ben bernanke was interviewed at the wilson center by sam donaldson. a portion of what he had to say. >> there seems to be a good deal of momentum in consumer spending and investments. and so, my best guess is we will have continued recovery. but it won't feel terrific. the reason it will kill to read it is because it would not be fast enough to put back 8 million people who lost their jobs within a few years. it will take a while. even though technically we will be in a recovery, the economy will be growing, the unemployment rate will still be high for a while. that means a lot of people will be under financial stress. >> this -- host: this piece from "the financial times." the financial crisis inquiry commission accuses goldman sachs of "abysmal response" in requests for information. that is an "the financial times." new york city, barbara, back to the budget cut its. caller: i have a couple of ideas. number one, i would raise taxes on all corporations, especially those who have their work force offshore. i would raise gasoline to $5 a gallon. i woul

wead just this past week e ad of e federal rerv chairman bernanke, before the commtee. we puthat queion im. we aed him in a two-step process, what is the financial market looking for in this cotry and why is tre s much unrest in the finci the uncertainty that's out they said, is it a problem that creates uncertaintyf the federal vernment does t make transparent exactlyhat we're going to do, spending, i., present a budget d he said that's one of the elements of uertainty. mr. akin: i guess he was being gentle, least, trying t give us a nudge in the right directn. mrgaett: he was, he's always being a little gentle in those areas. i put a chart oe screen showing where we've en over the last several years. because you know, the mocrat jority always says that they inherited thisroblem and tat all the problems weaver deing with today are all president bush's fault, put up a chart on the wall going back from, i guess it was 00, 20, and owing what the budget efits were, that he the gray chart, i don't have t chart right here, but it was thisig, then a little small, then a le sm

just this morning, on the budget committee, chairman bernanke said that it is important that the congress act today on the government sponsored enterprise. it's important that the government act today on enacting a budget. it's important that the government act today to reduce the national debt that has an impact on economic growth in jobs today. but we have no plan, at least listening to the gentleman from colorado. if we had a plan to deal with the g.s.e.'s, it has not ended in a success that the american people recognize. we're now looking at $147 billion of taxpayer bailouts, between the government sponsored enterprises and the f.h.a., they now control approximately 95% of the market, more gornment control. that's why the gentleman from new jersey, mr. garrett, and i have been reduced to h.r. 4889, the g.s.e. bailout elimination and bailout protection act to end this. instead, what we have from our friends on the other side of the aisle is they actually exempt the government-sponsored enterprises at the epicenter of the new legislation. it is time we put fannie and freddie on a road t

even the fed chairman, ben bernanke, said, this debt is, quote, unsustainable. now, faced with similar challenges in our personal budget and that's something we families do around this country each and every day, there'd be talk around the kitchen table and the children's allowances would be cut along with many other luxuries. it is that discussion that the majority party in this chamber really seems unwilling to have under the theory that if they ignore it, it will go away. or if they ignore it, maybe the american people won't notice the massive amount of debt that has been accrued over these past 18 months. unfortunately the debt will not go away. it is a legacy of debt for our children and grandchildren and the pain will be transferred to those future generations in the hopes that frankly they'll have the guts to face reality. i thank the gentlelady for hosting this hour on a very, very important popic. mrs. lummis: i thank the gentleean for -- topic. mrs. lummis: i thank the gentleman for joining me. as some of you were aware, america's -- americaspeakingout

bernanke finally decided that it was time to use the authority. for all theetk we have heard here, 12 years of republican rule, there was zero legislation for fannie mae and freddie mac. in two years of democratic rule, the bill was passed. finally, i want to introduce into the record an articl in "the new york times" in which paul volcker says of that "sweeping fancial reform before congress woul make the united stas a model for the world. the united states will go from less to the headf the le if this lislation is passed. i am glad that there could be international acceptance to the basic principle. i have the impression that it is on a very good side pat. -- syed path --side path? -- side path."my time has expir. >> can i ask the gentlemen -- >> know. my time has expired and there are a lot of members here. it is now the gentleman from illinois five minutes. >> the senate does have just started. do not be insulted if weewalked out on you. [laughter] >> senator, never apologized for leaving. [laughter] that goes to any member. i have never been

bernanke is being fair to mr. geithner. they should determine such action is necessary for purposes of financial stability and not for the purpose of preserving the covered company. to ensure the shareholders do not receive payment until the claims are paid, ensured that unsecured losses is bailed losses in section 210. that's the fdic. make sure that the management is removed. ensure that members of the board of direct ortiz are removed. so -- directors are removed. so it's quite the opposite of what the gentleman talked about. it says if an institution has gotten so indebted that it should not be able to pay its debts we step in and put it out of business. totally opposite what happened to a.i.g. it does say, yes, in some circumstances there may be an inability to do these things. but only after the institution has been liquidated. the gentleman talks about it and talks about it and never mentions that this is only as the institution is being put out of business. it is very clear elsewhere in here that any funds expended