into the future because our state regulators require us to have sufficient capital capital reserves. the backbone of the industry's financial strength is the state-imposed reserve requirements and specifically the contingency reserve. half of all premium dollar earned goes into the contingency reserve and generally cannot be touched by the mortgage insurer for ten years. this ensures that significant reserves are accumulated good times so that they're able to handle claims in bad times. the history of the mortgage insurance industry illustrates the value of this reserve structure. mortgage insurers paid out millions of claims as a result of regional recessions in the '80s and the '90s. after each recession we built up capital and were able to meet the next stress period. mortgage insurers and the banks that make the loans face similar mortgage default risk and only mortgage insurers raise capital in this counter cyclical manner. in fact, only now are federal banking regulators working to construct a similar system for banks. my third and final point is that with additional capital we

capital expenditure, 44 billion in 2009.alling to 36 then 29 and then in the year of the olympics, 26 billion. there is no other way you can cut it. there's nowhere else he can hide. he's got to stand up, explain he got it wrong and say what he told the house last week was wrong. why not do it for once. >> mr. speaker, we brought forward spending to deal with the recession. i know he's against us bringing forward the spending. but we brought forward current and capital spending to deal with the recession. but let me tell him that spending is 44 billion in the year 2009, '10 that is the highest capital expenditure ever in our country. it compares with the recession years under the tories when capital spending was only 12 billion or 16 billion. we are taking the action to invest in our public services. they would cut our public services now and would i does he not admit it will be 10% cut in public services under the conservatives. >> first of all, let's be clear about the prime minister's claims about conservative policy. whe

requirement for some capital requirements which makes a great deal of sense. my question is what do you think about all of you think about this, what incentives there might be if any for people to structure around the clearinghouse for no good business purpose? what would the incentives be to create a customized image that didn't have the business purpose of some kind? >> i would hope that once there is a running central clearinghouse there would be great benefits to moving all the transactions a dealer cut into that because it does lower risk for them as well instead of having this interconnected spider's web one of the lessons we learned is not only our institutions to big to fail but they are too interconnected so to speak but it helps lower the risk and that's why i subscribe to may be lower capital or margin. but it may well be some dealers don't agree with my point of view and they would want to keep some product outside of the standardized central clearing but i think it actually would help lower the risk for the institutions and lower risk for the syst

put on an enormous book of business without putting aside capital or margin. and what happened just last fall, when the rating agencies downgraded a.i.g., all the sudden they had to post significant collateral. i think it was over $30 billion within a day or two. ave had to have done that across the daily basis. it is a harsh discipline, i know, one that i learned when i was in the investment banking business but one i think it an important one, is to value on a daily basis or weekly basis the risks that a firm mass -- has and put aside capital and margin and aig wasn't doing that. >> senator johanns we're doing another round this is a complex topic and we're fortunate to have the chairmen and chairman and miss white from the federal reserve. let me just ask one question. we're engaged in a very complicated regulatory reform process, which is going to touch many, many different areas. so i would ask you to just tell us, what do you believe the two or three most important legislative changes we have to enact, given the fear that it's going to be so big and so b

to have a capital budget and do the things we can do with a capital budget you have to change the way the ceo and omb score, they can score the total investment, just the debt service like we do in pennsylvania. we score, we paid for in that year, a federal capital budget, even if the capital budget doesn't fund a total infrastructure picture but just the infrastructure bank, it could work. so the time calls for bold and strong actions. if we do this, the obama administration and this congress will be remembered the same way president eisenhower and the congress he worked with is remembered for building the national highway system. >> thank you very much. i didn't want you to speed up at the end, but you got me so excited about high speed -- [laughter] thanks very much. mr. szabo, we would like to hear from you. >> thank you, chairman lautenberg, senator thune, senator hutchison and members of the committee, it is a pleasure to be here for president obama, vice president biden and secretalhsecretarosecretarodsec speed rail. the obama administration has a vision that insures safe, effi

caller: how can we call it capitalism when we bail out the big banks an big insurance companies? guest: that was exactly the point i was trying to make is that these lines of capitalism and socialism have really been blurred. we would like to see -- many americans want to he see these things as very bright lines. they're not. the critical policy question is what should the role of government be, and i think one of the problems is that we have a government doing what it should be doing and not what it should be doing and doing what it shouldn't be doing, and so under the label of capitalism or socialism, we we are have really not directed the questions where they ought to be. for instance, in my own mind, it is very important that the government have responsibility to make sure that everyone has a certain basic level of social protection, and access to health insurance, particularly children, but it wasn't until very recently that we said children ought to have the right to access to health regardless of the well being of their parents. president bush had veet he towed the bill to

we want capital. >> and that's appropriate. >> okay, so isn't that just another way -- how will capital be posted in a circumstance like this if you have the capitol you probably either alone or not alone and it's a bad deal you wouldn't want it. but anyway, what i am getting to is this, doesn't that basically put that segment of this arena out of business? >> it may and i am not sure that wouldn't be inappropriate and i assure my colleagues will disagree that most people on wall street are competent to be a rating agency. and if you are talking about calculating probability of the fault of the company or security, that is not a trivial exercise. it takes a lot of work and i don't think most people will st. dewitt. they look at the bloomberg terminal and by consensus the have all agreed to split on the bloomberg terminal is the price you're going to deal with three is right or not. >> you know i would say to you, mr. whalen, listening to your testimony from a sterile standpoint and saying if it's that kind of risk maybe it should that's probably okay unless that's the only regional airl

capital flight approximated the crushing debt. in contrast, during south korea's remarkable growth period, capital flight was not only banned but could bring the death penalty. one of many factors that led to the surprising divergence latin america has much richer resources you'd expect it to be far more advanced than east asia but it had the disadvantaged of being imperialist wings. from the 1970s, the golden age faded. when neoliberal rules were observed insofar as they've been observed, economic reform deteriorated and social democratic programs have been substantially weakened. we see that right here. the united states partially accepted these rules and for the past 30 years, real wages for the majority of the population have stagnated up till then, they essentially tracked growth. work hours have increased. now well beyond europe. benefits which have always lagged have declined. social indicators kind of general measure of the health of the society, they also attracted growth until the mid-1970s when they began to decline rea

capital impact in gaining cdfi certification is two fold. first it has a track record that is comparable to other organizations that receive cdfi status, its mission is dedicated to working with low income populations and communities, second, increasingly in the community development finance field, cdfi certification is viewed as a good housekeeping seal of approval in working with her federal agencies and other public and private institutions. i think that it is important to note that this legislation does not guarantee the n.c.b. any assistance nor does it authorize additional amounts for the cdfi program. all it does is allow n.c.b. to better fulfillity mission by allowing them to compete for these funds. as such, the congressional budget office has determined that this legislation will have no significant impact on the federal budget. i urge my colleagues to join me in supporting this technical amendment to the n.c.b. statute so that the nonprofit mission may continue to provide services to distressed and underserved communities througho

they would be nice to do if we had infinite capital. we are trying to focus on the practical issues which are basic gaps in protecting against systemic risk crisis prevention, is that in our consumer protection. we need to change that first by putting in place stronger protections. we can streamline other aspects of it as well. >> you did not like the idea of having a risk regulator. what about consolidating them into one institution or person? >> you have taken many people involved causes accountability problems. -- you have too many people involved which causes accountability problems. that is an important thing to fix. we want to eliminate gaps in the bigger structure. there are markets that are critical to how the system functions. we want better tools for managing places. those of the core reforms we want to make. >> what role did congress make it? men like bernie franc still have supervision over certain areas. is that a problem? >> no. congress has to be willing to legislated these reforms. a lot of the changes we need will requi

at that behavior and saying they're going to need that much capital. do we want to risk that capital? and so you really end up with two regulators. you end up with a regulator establishing some minimum capital requirements and then you have the marketplace which is by and far the best regulator that you can have and then ascertaining whether that particular security is something the potential return versus the risk is something that the marketplace wants to invest in but you don't have a systemic risk regulator or some very strict regulatory agency out there saying we're going to abandon that or we're going to abolish that. we're basically trying to keep the market principles in there but yet making sure you're going to be in that business, you're going to have adequate capital to back up your transaction. [inaudible conversations] >> every weekend the latest nonfiction books and authors on c-span2's book tv. how do you run for >> look for our entire schedule online at booktv.org. >> the government funding of colleges, direct aid to colleges and their

this flexibility is a benefit for end users of derivatives such as cargill in managing working capital. losing this flexibility is particularly concerning because mandatory marching will divert working capital from investments that can grow our business and-- well it depends on market conditions the diversion of working capital from cargill for marching could be in excess of $1 billion. multiply this across all companies in the united states and the ramifications are enormous especially at a time when credit is critically tight. kevin colgan from the corporate treasurer caterpillar, our understanding of current and pending regulation in this area is it would require clearing function which would standardize terms like duration and amount. any standardization of this type would prohibit us from matching exactly the terms and underlined exposure we are attempting to hedge. this in turn would expose us to uncovered risk and introduce the list volatility into our financial crisis. i have a number of other examples in which i will insert for the record mr. chairman, and if possible i'd like

but how does this -- how does this differ from capitation at least the capitation as it was practiced initially? first of all, the initial payment level that we give to this group of physicians and hospitals are derived from the historical experience of that group. we are not sitting some artificial number to meet our budget expectations. secondly, one of the criticisms of capitation was there might be incentive to of weight sicker patients. we adjust our payments based on every year on the health status and morbidity of those patients that physician practiced in that hospital is caring for. third, we are adjusting the payment every year in line with inflation. not the kind of mccaul inflation many providers have been learning the last decade, but still in capitation was often at the end of the year when we lowered the payment. we are not talking about that. finally, to the criticism there might be withholding of care under a system based on capitation that can't happen in the system because it only works financially for physicians and hospitals and only for patient safety is quality

we are in discussion with these firms on their capital plans which are due by june 8th. even in advance of those plans being approved, the ten firms have among them already raised more than $36 billion of new common equity with the number of offerings of common shares being oversubscribed. in addition, these firms have announced actions that would generate up to an additional $12 billion of common equity. we expect further announcements shortly as their capital plans are finalized and submitted to supervisors. the substantial progress these firms have made in meeting their required capital buffers and their success in raising private capital suggest that investors are gaining greater confidence in the banking system. let me turn now to fiscal matters. as you are well aware in february of this year, the congress passed the american recovery and reinvestment act or arra, a major fiscal package aimed at strength engineer-term economic activity. the package included personal tax cuts and increases in transfer payments intended to stimulate household spending, incentives for

and the capital purchase program. i want to make clear the law of the land that was passed and recovery act applies to everyone. so the restrictions on bonuses. we added provisions on larger expenditure on say on pay, on having to write in a narrative way would you risk analysis is. but we were not as interested in those situations because many of those banks are community banks in your district. where you are giving taxpayer dollars to a company that would have gone into bankruptcy if they were not systemically significant, we feel a higher obligation and that really is in many ways the fundamental. >> my husband actually believe nobody should get bonuses, just get a good paycheck. >> we are going to return with this panel, and i'm going to call on the democratic side only those neighbors who were here and did not get you to answer questions. new members will get to questions under question a second male. the five members will be called on to finish his panel and we will then get to the next panel, if one or two repu

and saying they will leave that much capital it, we want to risk the capital so you end up with a regulator establishing some minimum capital requirements and in the marketplace which is by far the best regulator you can have it then ascertaining whether that particular security is something that the particular return immerses of the rest is something the marketplace wants to invest in, but you don't have a systemic risk regulator or some very strict regulatory agency out there saying we're going to abolish that and basically are trying to keep the market principles and their but making sure you're going to be in that business going to have to have adequate capital. >> up your transaction. >> thank you law. [inaudible conversations] now the senate hearings on u.s. policy toward north korea, the witnesses included steven boss or the special representative on number three for the state department. john kerry of massachusetts chairs the foreign relations committee,. [inaudible conversations] >> the hearing will come to order. we are here today to discuss recent troubling developments in the ko

trickle-down bureaucracy works even less than trickle-down capitalism. pouring $787 billion in in washington and somehow create jobs is a fantasy of the first order. not that the people that voted for care. their goal was power and paying off their allies. the [applause] you can tell how badly the stimulus has failed, and let's be clear, this is not something president obama inherited from president bush. he got his stimulus delivered by his robots in congress that did exactly what they were told without reading the bill. he can't turn around now and said that george w. bush made him have. they promised we would peak at 8% unemployment. at friday, we were at 9.4%. their budget is correct because we will have higher unemployment, greater expenses, and less revenue than projected because their plan has already failed. [applause] let me be clear as a matter of first principle. bureaucrats micromanaging companies does not work. politicians dominating the economy does not work. barney frank and chris dodd are not substitutes for a sound market economy. tim ge

you have a hodgepodge of capitalism and roy capitalism or whatever you want to call it -- and crony capitalism or whatever you want to call it. i think the candidate wants to improve the economy. i do not know if he really means that or is capable of doing so, but the way that the regime is set up, if you're going to change the entire system, that could affect regime stability. i think he likes to take in criminal steps. -- i think he likes to take incremental steps. >> in terms of which presidential candidate is successful, using to be suggesting that it might be a replay of a formal election. are you suggesting got it might be best to have the president reelected in terms of the potential for talks with the u.s.? we have a very short time frame and i am under strict orders to give us out of here as close to on time as possible. i see a hand at the back, two hands at the back. great. >> i do think that if he decides to engage the u.s., i think it is a problem for iran in terms of image, style and tone. he does not possess those qualities. somebody that denies a holocaust, how can you engage s

we are involved in evaluating the capital, assets, liquidity and management of the corporation. we have had concerns about aspects of the management and we have asked the board, in particular, to add independent directors which they are in the process of doing and we'll continue to be very careful and monitor the management situation but we do not take daily decisions. that's not our job. >> mr. chairman, let me ask you: when the government invested heavily in a.i. g fanny mack and freddie mac, manage hint was replaced. why was the fate of mr. lewis so different in this instance? >> well, i think in this case, the merger was undertaken in good faith, it was at the time looked like a reasonable combination, a lot of firms suffered severe losses in the fourth quarter, one of the worst quarters in history in terms of financial losses. our judgment at the time was that he could continue to lead the company and we have not addressed that but we'll continue to make sure that we're comfortable with leadership of bank of america. >> in an e-mail from mr. walsh to yourself on december 30

if you had a dollar short of capital, he would have a dramatically less capital in the system. but remember, this is a crisis borne in part of the fact that particularly households around the world took on too much debt. our economy rose to extraordinarily high levels and we're having a recession that is deeper in part because people are having to go back to living within their means and they will have to pay down their debt. that's a healthy process. but it means you'll see less demand for credit flowing and demand falling as people live within their means and are less vulnerable in the future. that's a healthy process, but it means you will see a slower recovery than normal. >> elizabeth warren has mentioned the fact that the stress tests may have missed a big area of stress, which is a commercial real-estate lending. is that true? are you reckoning with that? is it something you have buried under the carpet? >> the stress test was designed by the fed and the work careful to put in conservative estimates of potential losses across all types of credit assets. there is a pictur

capital expenditure will grow until the year of the olympics, after the year of the olympics, capital expenditure will be less but asset sales will make up for much of the difference. so we are increasing current expenditure and increasing capital expenditure up to the olympics. the unfortunate thing is, his proposal is to cut expenditure by 10%. he better now admit the truth he is cutting expenditure by 10%. >> it sounds more and more desperate. whichever way -- whichever way you look at the figures, the government cut plans to cut spending. let's look at capital and current spending. capital spending is going from $44 billion in '09, '10 to 22 billion to 2013. that is a massive cut. now let's look at current spending. you got to exclude -- you've got to exclude debt interest and paying for unemployment. that's what the prime minister used to call the bills of social failure. and when you do that current spending is being cut as well. so capital spending cut, current spending cut. those are labour cuts. let me ask the prime minister again, and this question will not go away until he

another aspect is to establish a market stability capital adequacy board. a lot of people have been talking about the democrats in the white house have talked about naming one person as the systemic risk regulator. we think that centralizes too much control for one individual. we also are against the concept of farmers being designated us to systemically risky because that i believe gives unfair edna vantage in the marketplace. we've already seen that. we saw the government bought in to picking winners and losers by determining who was systemically risky and who was not. that isn't good policy for this country. how does this work? we would form this group that would be appointed, the treasury would lead, we would have people that are a part of the regulatory structure, the new structure and possibly outside people and their task would be to get together on a periodic basis and look at mall only the entities they are regulating but also look out into the marketplace and have discussions to determine what is going on in the marketplace, new products and thing

scott garrett who's our capital markets ranking member. jeb henserling who's financial institutions. ron paul worked on this plan. has endorsed it. he's not here. congressman miller supports the plan. so we have come in a united way. we have two other people who have worked on it also. we have tom price who is a senior member of our committee and mike castle. mike is not here. most of you know mike. he's very involved over the past few days in making some decisions. but they are very supportive. and then we have our vice chairman of the committee, randi nugenbauer. we've met with randy's office and he has scheduled all the meetings and we have had several meetings. we've ironed this thing out and we knew we needed to get it right. let me say this, financial services, regulatory reform and the structure of our regulatory system is of critical importance and we knew that we had to get it right. we're offering today our solutions to address the causes of the financial crisis that we've all been going through, us and the families we represent.

let's be careful not to throw out the baby capitalism with the bathwater. a global capitalism knows no country borders and recognizes no national boundaries so it is not surprising that it has helped -- is this working -- it is not surprising it has helped the worst of the world in china and india and asia the most in a scathing poverty even if it meant a great hardship to the middle class and u.s. and in europe. but if you look past the nationality what is wrong with helping the poorest of the world first? finally, always hold last as an explanation of the situation you don't completely understand an accusation that those who participated or caused the crisis were somehow irrational or even stupid. i work with these folks on wall street for ten years and i can promise you there are many things but they are not stupid. similarly, to blame the crisis on wall street by calling wall street greedy seems to miss the point. greek is what will street does and has always done. there is no wall street without greed. why else would someone else watch his life disappe

. $1 of capital is about $8-$12 of lending capacity. remember, this is a crisis born in part of the fact that households are around the world took on too much debt. our economy rose to extraordinarily high levels. we have a recession that is deeper because people are having to go back to living within their means and paying down their debt. that is a healthy process for us. you will see less demand for credit falling as people get themselves back to the point where they're living within their means and they are less vulnerable in the future. that is a healthy process. you'll probably see a slower recovery than we would normally see. >> elizabeth has mentioned the fact that the stress tests may have missed a big area of stress, which is commercial real-estate lending. is that true? are you reckoning with that? is that something that you. o under the carpet? >> they were careful to put concerned estimates of potential losses across of all types of credit assets. there is a picture that they put out is very important. they had peak losses

over stock is fine and we don't need capital but if you talk about a smaller company that needs capital and has to access the capital market. if hedge funds gang up and do this. they can interrupt. there's a company called force protection and they make mind resistance ambush control vehicles. real big vehicles that solve the problems in iraq. once they get in one it's impossible to kill them. the department of defense loves them they ordered 12 thousand and this little company couldn't keep up. they wanted to expand they're factory to make more. they're stock instead got ma nip lated down to 4 dollars. they couldn't sell any stocks so they couldn't raise capital or expand they're factory so soldiers have been dying so some hedge fund guy in new york could have a new ferrari. multiply that by hundreds or thousands. there's a great economist in town here. shapiro says hundreds of countries have been effected or are destroyed. we'll never know. some companies deserve to go out of business, some didn't. >> patrick burn our guest. first call, illinois. mike independent line. >> i have a que

>> i think it might not be the cftc but it will be the federal reserve or the sec said in capital in this regime but just as there is capital standards in the full oversight iowa -- i defer. >> is to analyze the risk of our doing business with each other and to demand collateral against the position we are creating some much of that and now the system would be required here is analysis that i think the dealers are very comfortable doing. the difference would be there would be government oversight but i don't think we will have the capacity to second-guess every transaction whether there is was analyzed appropriately but we would expect the firms to stress test of their models and ensure the risk-management procedures are first class. .. >> what about your system would have stop that? would your system have kicked in ats' mind and you would call the ceo of aig and shay you're at $200 billion and you're down, you can't do this anymore. would we have stopped aig? >> it's always hard in hindsight. i think a number of features here would have slowed down and maybe even stopped. aig put on

. >> to the extent that it reduces capital, that's correct. >> thank you, mr. chairman. >> thank you, mr. chairman. thank you, dr. bernanke. if i look at the bills we had here on the floor over the last couple of weeks we were in session and this week, virtually everything we're doing, either authorizes or appropriates more money spending. even in many cases than what is anticipated in the charts that we have talked about today. what are the economic consequences of continuing that sort of trend? >> congressman, as i've indicated, we as a country have to make hard choices. we can't expect to continue to borrow, certainly not 12% of gdp, but not even 4% or 5% of gdp indefinitely so we need to make a plan, some decisions about how to bring the budget closer to balance over the immedia medium term. that means as you discuss spending, you need to think about the revenue sources that will be related to that. if you don't do that, then, again, you'll see interest rates rise and see reluctance of lenders to provide credit to the u.s. government. that would be a very b

and at this stage that wasn't viewed as a particular glory move and have been writing capital market pages and covering the debt markets for many years in a very sordid manner. but the glory positions of the banking editors and things like that, it wasn't the capital markets as that in attics and most of the capital markets coverage was on page 423 and, in fact, one person pointed out to me i had just gotten pregnant i'm going to the capital markets would be great for a new mother because it would be also quiet. nothing ever happened, i kid not. but i arrive at capital markets and of the first things i decided to do was the jpmorgan group came into being and we attended a conference of a body called the european securitization form that they held once a year. i went down and walked into the acropolis center in nice, a bit of french architecture planning and into a plush velvet ceded to conference room to find out what was going on in the credit world and that scene that i walked into a remember clearly today felt almost immediately like walking into a strange new alien jungle if you

yesterday, i introduced house joint resolution 57, the preserving capitalism in america the amendment. it is a proposed amendment to the united states constitution because it came about as a result of my discussion with people back, because several people that i spoke to said they did not believe enough people were taking a stand to say, this is wrong. i don't believe this should happen in this manner and i know we have difficulty but i don't agree with the structure. i don't agree that we should own general motors. the constitutional amendment would limit the ability of the government to acquire an ownership interest in a private corporation for good this give the government the ability to issue loans and allows us to invest in public authorities, public use corporations and allows investments by pension funds. it turns out that as i was discussing this with people in my community that limiting government ownership over private enterprise is not a new idea found at least eight state constitutions that in some form limited the state's ability to acquire stock or equity in a company, a

let's just say capitation like structures, so let me say a few things about per episode bundles. first, the key is including all the providers involved in an episode of care. our system has long had experience using bundles for a single provider, but the point here is to use a bundle that crosses all the providers involved in care. and this provides incentives for an efficient delivery an episode of care, provides incentives for the different providers to choose efficient provider partners, so that the o orthopet does the procedure at the most expensive hospital, they never get a reward, but if they do it at a more efficient hospital, less expensive, they might have not have to change anything they do and this way they could be a winner in per episode bundles. now, the attribution of episodes to -- of patients to different episodes or different providers, can be a challenge. it's easy with the major surgical things. initially, this actually has been pursued by private insurers, as a modification of fee for service. basically, bonuses or penalties in for per-episode efficiency and

and the question of the ad casey of capital reserve, looking at potential losses into the future, it really does stay, the stress test would be stronger and more meaningful if they reached across a longer period of time and dealt with this issue. the third problem of -- that we are concerned about, is the inability to replicate the tests. i'm afraid i'm going to expose once again my academic background, i do a lot of impeerk cal work, and one of the most important things you want to do in any model is establish that it is robust. and what we mean by "robust" is just, if something changed slightly, you altered the time period a little bit, the g.d.p. crags or growth shifted just slightly, you have relatively similar results. different results but within the same beark. -- ballpark. if you do, you have a lot of confidence that the test is measuring something real, that is that it is robust. the problem is, you can't rerun those tests unless you have a lot of details about them. so we have pressed very hard on the fed, who is really the consensus toedian of this stest test, for more inf

as an opportunist may look on sort of a capital, dollar to capital bases, pulverized coal might be 2000 or 2200 bucks a kilowatt. by contrast nuclear power might seem 4500 or 5000 per kilowatt. that's down from some estimates before, and over that lifetime, generation of electricity you are kilowatt hour of generation could technically be cheaper, much cheaper potentially as fuel costs go up a lot for the other sources. >> again, we've got to compare the theoretical and the real world. senator alexander pointed out in his little speech at oak ridge that the attorney general of connecticut at one point was complaining that the nuclear power guys were making so much profit that they often put extra windfall tax on them. that they now i'm just looking at finland. finland is complaining and they were to the finnishmac government here, the fact that the lower price and in particular the fact that the nuclear plants don't have to fool with a carbon trading cost and all of this means, and they don't have the uncertainties that other people have, and all of this means that they are making unfai

even as we're trying to increase capital for the irs, our budget would reduce capital wide investment by 65%. that is a modest saving. i want to say a few words about the treasury staff. i have the honor of leading a team of the exceptionally smart and dedicated individuals to making our government more effective. they perform a great service to our country under challenging circumstances. every grateful to the great feeling that the scale of what we have set in motion just in the last six months, the have done extraordinary things in a short period of time. thank you, mr. chairman. i would be happy to answer any questions. >> many -- mr. secretary, many of these will be policy questions, global in scope. i will try to bring this home to the actual budget aspects of this hearing as best i can. let me start with a topic he will not be surprised i am interested in -- a mortgage foreclosure. i have brought before the senate twice now, unsuccessfully, an attempt to change the bankruptcy code so that we can create more incentives for renegotiating mortgages to avoid foreclosure. i failed i