then good deal today, for either of the parties. we're here because there's been a serious allegation and a number of pieces of evidence have risen that make us believe government officials felt necessary to use the power ux influence, and potentially threat in order to consummate this deal. when congress envisioned the t.a.r.p. and other assets, and other powers in order to help in the post-september meltdown of the economic market, we did so in a way that was make us lessen the impact as we unwound credit markets around the world. nowhere in the legislation did it suggest that hank paulson, ben bernanke or anyone else operating on behalf of the united states government was given the power to force shotgun weddings. today we're going to hear from ken lewis, ceo of bank of america. a man who spent decades understanding the value of financial institutions. we will hear about the transactions, the ratios determined for a stock trade type merger were in fact considered to be reasonable. as the chairman has said, rightfully so, the fede

it's a four-player deal. nats acquire outfielder nyjer morgan and left-hander sean burnett from the mets in exchange for joel hanrahan and lastings milledge. we'll talk about it coming up on "nats xtra" pregame here on masn. >>> hi, everybody. time for "nats xtra" pregame. i'm johnny holliday along with the silver fox, former mvp of the 1986 world series ray knight. good to have you on a special night for nats baseball. number one, nats will go to florida and knock off the marlins in the doggone eight- game slide they had in miami and a couple of new guys are coming in to join this ball club and we talked about that, didn't we, ray? wouldn't it be nice to get this kid, morgan, playing in our ball club? eye want to relate to the fans about what you said to me. we were walking around the ballpark all year long. we have not commented loot about oppositional players. johnny says have you paid attention to nyjer wilson. he says he flies, he's quick to me. runs almost to the on-deck circle. a kid who has a tremendo

a deal with fiat before. the devil is in the details. we have got to look at this carefully and not just do all this big splash stuff. host: this cover story, "the wise latina." sonia sotomayor's confirmation hearings are scheduled to start in the middle of july. the issue of climate change in "the national journal." tom, north carolina. good morning. caller: my concern is about general motors and what is happening with its situation within the car industry. no one seems to be pointing out the fact that there are six general motors factories in china and that they are talking about expanding, plans to build more. there are no problems with the ones in korea. to me this is just a way that they are trying to break the backs of the union's in america, take the jobs away. once the unions are broken and benefits are down, they beat manufacturing will come back to the u.s.. nobody seems to be pointing out the fact that companies in america are just fine. when chrysler needed help a few years ago, nobody pointed out

>> we did a great deal of due diligence on their portfolio. i'm proud to tell you that we bought them and changed all of their lending practices e they are now a prime lender. they are not doing subprimes. bank of america had gotten out of subprime in 2001. we were not doing it at all. we've turned that company around to a very reputable mortgage lender doing the right things. >> but you had to absorb all of their losses? >> no, ma'am. we -- in the no, ma'am, in the n there's an accounting thing where you mark the assets down before you buy them. >> that leads to my next question. it has been stated that the bank of america in 2008 conspired with merrill lynch in a sweetheart deal to give out exorbitant bonus to merrill executives totalling over $4 billion. that's with a b. in december 2008. soon after, bank of america got major infusions from taxpayer t.a.r.p. money but in 2008 on its federal taxes, bank of america, though it earned $4.4 billion that year, apparently paid just $120 million in taxes and deferred $5 billion in taxes for 2008. s

he has no policies for dealing with unemployment. no policies for dealing with small businesses. no policies for dealing with the problems of this country. he is an opposition leader who has no plans for government and he doesn't deserve to be in government. >> i had one of my plans for dealing with the recession was the same as the prime ministers last week, except the chancellor. he might be talking about a second preference voting system. the fact is he's left with a second preference lance lower. now, on the issue of public spending, on the issue of public spending, let's be clear about the answers the prime minister has given. he said last week, public spending is rising every year. that is what he said. his chancellor said, i have cut overall public spending. the figures the prime minister is walking around are his own figures. he is planning to cut public spending by 7% in every department over the next three years. the next election, when he has the guts to call it, won't be about labor investment versus cuts, it's going to be an election about the mismanagement -- it's g

lewis pleaded to going forward with his own bad deal? or did mr. lewis recklessly agreed to pay too much for merrill lynch so that the federal government felt backed into a corner when faced with the prospect of louis backing out of the merrill deal and of course we experienced the inevitable bankruptcy of merrill lynch. could you respond to this? >> yes, sir. today i think has been productive in terms of transparency and more information about what happened. clearly there was a very difficult period and many complex problems of the that were being addressed but as i indicated i believe that we solve this problem without an any way taking steps that were either beyond oh-la-la or on ethical. and i believe we did the right thing in order to stabilize both companies or the financial system. >> thank you very much and thank you, mr. chairman. >> the gentleman's time is expired. congresswoman norton for five minutes. >> thank you, mr. chairman and we do appreciate the transparency your try e and to bring to this transaction. i am not inclined to second

you're about to go into a deal with a company that is worse off than is made to believe. and it just seems to me that and a person with your experience, there are a lot of people in this situation and i don't care what paulson may have said, what bernanke may have said. they would have said, the tell with you, i'm going to stand on principle and my principles tell me there's a mac here and a real problem. if i go down, i go down. but i'm going down on principle. i want to give you an opportunity to tell us, because i got to tell you, i mean, i'm kind of concerned because i think there are some serious credibility issues and i think mr. kucinich raised some things that if i were your lawyers, i would be concerned about. so help me. >> your referring to the fact that despite the fact we thought we could have a mac we relied on the -- >> and i'm also going to the point that i believe that when you said you don't just go and tell the feds and paulson that, look, i smell a rat here. somebody of your stature, i can understand if you were some guy that came off the street six mo

in any event he did that, he stayed in the deal. there is an interesting e-mail from you and i'm interested in the taxpayers' position. this is from you, mr. chairman, to scott alvarez. had a good conversation with lewis just now, he confirms his willingness to drop the m.a.c., opposition to the deal going forward. and to work with the government to develop whatever support package might be needed for earnings announcements dates around january 20. we discussed his common equity issue, we agreed that having a significant amount of t.a.r.p. capital in the form of common equity was not an ideal solution given the ownership implications. but we agreed both to think about possible solutions, a government-backed capital raise or government common with limited control rights, now, it sounds to me liken lewis was concerned about his job and for the american taxpayer to get voting rights in return for their tarp money, mr. lewis would be gone. i believe. is that the concern that you believed mr. lewis expressed regarding the tarp being pres

we are dealing with existing law. we are proceeding in that way. >> on the issue of the substitution this is not obviously determinative, then-senator obama voted in favor of the substitution. would that influence you at all? >> well, i will talk -- if this were something the president wanted to revisit i would certainly listen to where he is now. i don't know -- >> think there's a difference in institutional approach from being a senator to being a president? >> possibly. he may have the same position. he may not. i don't know. he's my boss. i would listen to him. >> mr. attorney general, attorney general mukasey, your predecessor, invoked the immunity defense. you make an independent determination after becoming attorney general as to whether the immunity defense should be invoked? >> i didn't -- >> should be invoked? >> i'm not shore -- >> there's a period of time before the court decided the case after you became attorney general and there was speculation at least in the media that the new administration might not

lewis about the nature of this deal. what is at the heart of the matter is the fed's fut role as a systemic regulator. let me go back to a few points just touched on in that regard. do you believe it was in the best interests of this country for merrill lynch and bank of america to be merged and to receive the bailout funds they received, first the 25 billion between the two, and later the 20 billion as bank of america expressed concern or waffling about the potential deal? >> i think it was critical we avoided the failure of those terms and the implications it would have had for the financial system. we did so in a way to protect the taxpayer and again i think we did the right thing. >> one thing that concerns me about this, though, is information we have from the fdic chairman who wrote to you prior to the final bailout monies being received by bank of america, she said der ben, strong discomfort with this deal for all of the reasons you and i have discussed. what did you discuss? >> my recollection is that her concern

chairman i would like to deal the remainder of my time to mr. burton. >> the gentleman has the remainder but time which is a minute. >> thank you very much. you indicated that secretary paulson's comments that he made that threat after a request of the chairman bernanke was changed later on by mr. paulson. so, what he said was then i think this ought to be in the record his prediction of what could happen, talking about you, his prediction of what could happen to lewison the board with his language, was paulson's language but based on what he knew to be the fed's strong information to bank of america attempting to pronounced the deal. you were the fed, and he said it was based upon the knowledge that the fed's strong opposition to bank of america attempting to renounce the deal with something that he knew to be the case, and that he, he was in effect speaking on behalf of what you've sent to him. >> the gentleman's time has expired. chairman bernanke you are directed to vendors question. >> we were strongly opposed to that action for the reasons

and willow at the new york fed, which deals with the disclosure concern. also this is in december of last year where he says i fink i will ask merrill lynch a current estimate and he makes the statement if i get a sense merrill lynch is leaning toward a january fall when i will steer them to a leader. but i am trying to figure out is we have all this pattern here which as i asked mr. lewis when he was here if what took place at the october 13th had an impact on his decision making, his fault process as he moves through this dealing in december with you and treasury relative to the merrill lynch acquisition do you see how a reasonable person could reach the conclusion there in fact was this pattern of pressure from the government? >> no, not if you are sufficiently informed. as i said i didn't tell mr. paulson to come as a threat. the e-mail from mr. lacher was a long conversation. it explicitly said that problems with management would be related to their needing assistance -- >> they already had assistance, you made them take it so i don't see how those

he cannot deal -- he cannot deal -- he cannot deal with a policy debate. i have said that we are taking action to deal with the recession and that means that more people will be in work. that means more businesses will be saved and that means that more help will be given to mortgage holders. he would cut the money now. there would be more unemployment, more debt and more deficits. and the conservative party have got to face up to their responsibility that they are calling for public spending cuts at the time when every country in europe and in the rest of the world knows you've got to inject more money into the economy. as for the future, everybody also knows and i think this is where the serious debate lies, that what can happen depends on growth and what happens to inflation and what happens to employment and what happens to interest rates and there is good evidence that the proposals that we have put forward are working whereas the proposals they put forward would not work. as for the put of public expenditure let's be clear. there's not cash rises but

then explained the whole deal. i asked the question, mr. spur ling, define major event. define what's major because it's going to be pretty major tomorrow in our district when 800 people find out they will not have a job. he didn't have a definition. we don't have a working definition. it would be something along the lines of a merger -- which basically told me could be any darn thing they wanted it to be. my question to you is, what day to day involvement does the government have in decisions you are making relative to t.a.r.p. funds, relative to any talk about -- ifny, talk about that please. >> there is a t.a.r.p. committee that looks at lending and seeing if we're using the t.a.r.p. funds to lend money. that is a report we just requested. there obviously is the involvement of regulators as they normally would be -- >> i'm talking over that. more than that. >> the only involvement that would be explicit would be after we were ordered to attain more capital as a part of this stress test, they did suggest to all banks that were raising that capital to relook he at the b

we are determined to root out and deal with [unintelligible] as well. anyone with personal experience of that happening to their family, we have to continue the work to remove them and we have the utmost sympathy for them if that has happened. >> does my friend understand the anger among people who work in financial services who have seen billions of pounds quite rightly invested in banks to shore them up, but now have seen thousands of jobs being in jettisoned in the midst of a recession? does he agree with me that they need to work with the unions and keep people in work during a recession rather than shedding jobs to pay money back to the government? >> our friend is a great advocate for his constituents. i know that made a number of redundancies, and that is a big issue not only for him but the rest of the country. i am happy to meet and talk about these issues. our determination is to keep as many jobs as possible in this country and prevent unemployment where it is possible. 180,000 jobs have been created as a result of a new investment we are mak

the question is how was the court going to deal with this? i think there are three possible routes that could come out of the oral argument. one is the simplest route which is making no law at all saying this does not turn out to be an election year in terms of communication. the constitution cannot protect something unless it is a direct equivalent of an attempt to get you to vote for or against some 160 days before an election. i am not sure how plausible that is given that the film is not favorable for secretary clinton. i think the court might try to expand the -- suggesting that movies have a different standard. this is about listeners. they have to purchase a movie. the constitution protects that as sacrosanct and that mccain camp cannot reach this. but for those that want to regulate campaign finance will just have more movies like the hillary clinton movie. i think it is possible that this case could be used as a vehicle for overturning the mcconnell decision. what we talk about, just as alito, it is important to understand from justi

they wanted to negotiate a deal. it would be easier to make such a deal if there guy won. i wonder if you could comment -- whoever wants to -- whether those calculations have changed. if you can put yourself in the place of those guys running the country. what their considerations now when figuring out whether to approach the obama home -- the obama administration, maybe not now but when the session opens in the fall, with some sort of offer to talk to the united states? of course, i think we ought to respond. >>, and was there in march and i came away with the feeling that the clerics, the regime had never felt so powerful, that it had so many trump cards in dealing with the united states. just across the board. it felt almost cocky. we are expecting in there were an overture from the united states -- and the last couple of days obama did make his message -- that any deal, any serious negotiation would have to include a lot more than the u.s. has offered so far. the u.s. would have to come bearing gifts, including a compromise on uranium enrichment. in the aftermath of wh

as a matter of contract law, this can propel to consummate a deal. federal and treasury reserve asked tus to delay action and expressed significant concerns about the systemic consequences and the risk to bank of america. we explore government support. we both were aware the the system was in fragile condition and a collapse could hasten the crisis. bank of america concluded that proceeding with action with governmental support was the better course. this made sense for bank of america and shareholders. it made sense for the marks. i believe committed people with good intentions in the private sector and the government were desperately hard in late 2008 to prevent a collapse of the global financial system. six months later it's easy to forget just how close to the brink our system became. i will never forget. i believe the efforts will be well remembered long after any current controversy is forgotten. with that, sir, i'll conclude my remark remarks. >> thank you for your statement. let me begin the question. let me ask unanimous consent that we have

dealing with things like these malls of national groups with a great deal of destructive power, with extremely tight security also requires a kind of a long-term effort. so, it is a constant balancing act. the trade-off is really between long-term, steady effort, years to pay off and the ability to flex one something pops up and you really have to take care of it, and i think that we have got the capability to do both. there will be, there will be surprises in the future, but i have a sense that the outfit that i inherited has the inherent flexibility to be able to move from the ones that we know are important and i think we do need to emphasize these enduring concerns, so that i can turn it over to my successor with better insights into them and a voice in those surprises. >> hi, pam with ap. how are you? i have two questions for you and the first one everybody in this room should did because it is an insider question. you seem to be exercising or flexing their muscles as dni, perhaps more than their predecessors using the powers given to your office and i'm wondering if you think t

one is to deal with the expenses system in the house of commons, and the second is to deal with the problems and challenges of the economy. now, i thought that the liberal party would support us in that action that we are taking, and i would also join the other party in talking only about things other than policy. the country wants us to talk about what we are doing to help them. >> his government is paralyzed. it is paralyzed by indecision. crippled by infighting, exhausted after 12 long years. it is a tragedy at exactly the time when people need help and action. it has a void. labour is finished. is it not obvious -- is it not obvious -- is it not obvious that the only choice now is between the conservatives and the liberal democrats? >> mr. speaker, mr. speaker -- i seem to remember -- i seem to remember the new liberals as saying that every election that i have ever fought. mr. speaker -- mr. speaker, he is right to say that the country needs action, and the action is coming from this government, and yet he will listen to what we are doing, i think you will find its that this would help

dealing here. there was an imposition placed on dealers by chrysler, who said that they had to buy in january of this year, that dealers collectively would have to take another 78,000 cars to be sold in the month of february to help chrysler protect its viability and to get additional loans. to get additional loans from the government. i remind you that $4 billion went to chrysler in december, $3 billion in financing helped in 345r. when chrysler restructures, $4.5 billion is committed to restart operations. and frankly, i think it's pretty simple. in the bankruptcy proceeding what will ought to happen is a plan to say to the dealers, ok, we shoved this down your throat, and now we'll take them back. that's part of the government what ought to be done to relieve the dealers of additional burdens besides closeding their businesses and smashing their dreams and hopes. so it's tough. and i know you don't like it. but whether or not you like it, the burden that you're passing on to the dealer network i

very dangerous because the markets would have been faced with the uncertainty of whether or not the deal was going to go through, merrill lynch would probably not be able to survive absent the support of bank of america so there would have been on immediate problem with merrill lynch which would have created broader problems in the financial markets. >> even if they threatened to do that in the context of negotiating? >> well, you can't negotiate anything unless you are willing to go through with your threat, and so therefore there would have to be a probability in the minds of the participants -- >> you think that would have been considered a bluff. >> i think it would have been ste stabilizing as well, yes. >> and in consummating, though, the merger, as originally planned, in effect didn't the bank of america shareholders take a good part of the hit of the merrill lynch losses? >> not in our view. as i said when i talked to mr. lewis about this, i stressed that not only was invoking the m.a.c. bad for the financial system broadly but our opinion was it would be bad for bank of america

lewis threatened to back out of the merrill lynch deal merrill lynch deal and to what extent were you concerned and did you have conversations with secretary paulson that that would sort of unravel a lot of things therefore we had to accelerate the t.a.r.p. funding for b of a and did you take it or did secretary paulson take it as an implied threat if i don't get that line going to go public and let everybody know we are pulling out of the deal? >> when i first heard about it on december 17th i took that as a possibility i was concerned about but subsequently i thought as i said mr. lewis was genuinely uncertain how to proceed. >> mr. chairman, my time is up i want to say on the record while some one this narrative to be this poor ceo of a moderately sized bank with the boot of government on his neck forcing him to do things he didn't want to do i believe the narrative lends itself to a corporation gaining the system because he could recognize an opportunity when he saw and it was 15 to 20 million-dollar opportunity. my time is up. i thank the chair. >> i now yield five minutes to the

, any other deal is not unequivocally supported by the west. there are things that could derail that deal such as brutality on the part of the regime towards the people, such as, you know, another tee tianan square, this time in tehran. i think it's very important for us not to ignore the human terrain. >> jim? >> i would just say that i think i would tell the president that the goals that he's set for the engagement strategy could only be accomplished in the event of a change of regime because i think this regime is committed to attaining a nuclear weapon which it sees as a way of preserving itself in power because it fears its own people for good reason. and secondly, if i expect the administration will continue on its engagement strategy regardless, and i would say it's important to set a deadline on that because otherwise iran will just run out the clock and, you know, kind of engage in pseudo negotiations. and thirdly, i think that, you know, president obama's been very mindful of the iranian narrative ant -- about iranian-american relatio

the deal is, you see a pothole, utah border -- you twitter it to the system. in britain, there is a iphone app. you take a photograph, you geo targetarget, and it goes. the arc of the universe is long, but it bends towards justice. i figured the energies i have should be channeled towards making sure that really happens, towards nurturing that trend, and as an inpatient guy, i went to accelerate it. >> what does that mean -- i wanted to accelerate it. >> i went to find the people and supporting them -- i want to accelerate it. i want to find the people and support them. as a nerd and former engineer, i am used to being the person who does stuff, a thing doer, and now, they tell me my great value is the person who talks about the great value of what other people do, and if that is what it takes, i will do it. >> so someone as impatient as you may be, you look at the promises the administration made during the campaign, and you look at the first six months, how do you grade the administration so far? what is working the way you wanted to, and what do you think n

>> at some point you couldn't have made it that deal. at some point a number that you -- the hole would have been just too big. >> if the taxpayers back fell, 24 just as easy as 12? >> no sir, because you would all of a sudden -- this is 8% after tax dividends that you're paying. at some point you couldn't bear the burden of that kind of cash flow drain. >> the 12 billion was within the range? >> it was painful and it caused us to have to push out our horizon in terms of the deal to work, but it is workable. >> mr. flake, i would yield to the gentleman -- >> i would like to associate myself with your comments and the gentleman from maryland where you are a little inkredhouse when it was stated before the new york attorney general, the gentlemen was threatened. we are oddly enough arguing over when you're threatened you, you feel threatened, but not whether or not there is a threat. we made that pretty clear and i appreciate your sticking to a position of not further indicting those that regulate you. it's our job to get to the truth and

with in the new deal. this comes from frances perkins grandmother. >> i think she is iconic and this has been a wonderful lecture. i read an oral history from the d.c. court historical society by an attorney whose last famous gardener who is a very prominent attorney in d.c. and he had worked with her in the labor department. in this oral history, and i understand times were very different then, and he said wonderful things but one of the things he said that was not wonderful was he said she was anti-semitic and that she would not let him hire many jewish applicants to the department, who he had wanted to hire for good do you know anything about that? is that accurate? >> yes, the question was that someone in the audience found an oral history about an attorney named gardener who said that he believed frances perkins was anti-semitic and that was why she had that given him a job. >> no, he had a very high job in the department of labor. he worked with her and he wanted to hire a jewish attorneys under him

iranians were dealing with this all the way along. and so young people also were attracted to his message. he promised to battle corruption. he promised to bring the country's oil wealth to people's dinner's table and this was certainly appealing to a young generation who was starting to think very seriously about whether or not they could afford and sustain decent married adult life back in iran. my move back to iran was occurred with a change in my life. given the title of my book, i met someone who would later become my husband, and when i moved back so that we could start our life together and go forward, i began to experience and sort of firsthand witness all of the things that iranian young people were dealing with when it came to marriage and moving on in life beyond simply being single and young. this all started for me in the course of planning our wedding and there's a chapter in mygcw k devoted to this and it's called "the persian bride's handbook." it looks at weddings in iran and, of course, i being the woman, the one who

dealing with things like these malls of national groups with a great deal of destructive power, with extremely tight security also requires a kind of a long-term effort. so, it is a constant balancing act. the trade-off is really between long-term, steady effort, years to pay off and the ability to flex one something pops up and you really have to take care of it, and i think that we have got the capability to do both. there will be, there will be surprises in the future, but i have a sense that the outfit that i inherited has the inherent flexibility to be able to move from the ones that we know are important and i think we do need to

or no deal. going to close the bases or not close the bases? that's the only mechanism that we've ever come up with to actually cut federal spending, to be able to actually do the thing we all talk about doing all the time but in the trading nature of the legislative bodies never gets done. this one is actually -- this one has actually done it on the brac commission on military basings which is a substantial but certainly not all of our budget and i'm saying let's take that mechanism and apply it it to the rest of the budget, mandatory and discretionary spending, both pockets of t the bill which i am fully open to suggestions and ideas for amendment would break it into -- the federal government into four different categories to where every fourth year there is as carfa commission review of one-fourth of the budget and then that recommendation is sent to the congress to either we eliminate these pieces or we keep them. i've got a scorecard up here. turns out that the g.a.o. does a regular scoring

the bank of america, merrill lynch deal is a case in point. new e-mails we have obtained from the fed indicate that fed officials may have attempted to keep other agencies in the dark about what was going on. k-fed e-mail discusses not telling the office of the comptroller of the currency what is happening. others discuss how to minimize the amount of information given to the sec. in a remarkable exchange, fed officials note that an sec official can be counted on to be discrete. i am not going to prejudge the issues. at this point, we are not even close to finishing this investigation. bank of america ceo ken lewis gave us his story. now it is dead chairman bernanke's turn to give his side of the story. next, it will be former treasury secretary hank paulson to give his side. we need to get all of the facts out on the table before we are in a position to say what happened and when it happened. but, i promise you this. we will follow this investigation wherever the road leads, and we will do our best to make sure the facts get out on the table,

lunches upstairs [applause] [inaudible conversations] >> new deal to the new right to argue that modern conservatism was founded in the south. why? >> the reason i make a claim is often people talk about a southern strategy and a capture of the south by the g.o.p. after the 60s beginning with goldwater and an expanded 72 reelection. in some ways this situation is reversed the southerners play a key role in the conservative capture of the republican party itself and then republican national a. in a certain ways to a combination of southern segregationist politics and conservative is of it is blended over time by various political actors in a way it allowed the national language of racial resentment and opposition to federal-state power generally. >> host: two questions arise from that answer, how did they planned and when did this begin? >> it begins decisively in the 1940's and '30's in congress there was a conservative coalition that comes together after 1936 to resist some of fdr imperatives but really it is after world war ii win during the truman and many kate -- administration when

their concern was the fdic own disclosure to the deal.they noted merrill lynch wasn't a bank and therefore wanted to be sure to restrict whatever financial resources to commit it to be relative to the bank rather than the acquired company so they had concerns about the structure of the deal as it related to their own financial exposure but in the end of course they did agree to contribute to the arrangement the government put together. >> ken lewis told the committee to weeks ago that he called you and ask you to put in writing the verbal commitment he said you and hank paulson made to him regarding a government bailout of the merrill lynch deal. what did he say to you exactly during the phone call what did he say? >> he wanted to know if we could provide a written description of the commitment that he could use with his board. we were unable to provide such written description because we did not have any deal. we didn't have a transaction completed at that point so there was nothing specific we could commit to. all we had was a good fait

kaput @@@@@@@ @ @ @ @ @ @ @ @ merrill lynch deal?>> i did not. >> ken lewis testified under oath here and also told his board of directors that you and mr. paulson made verbal commitments to him in december of 2008 to provide bank of america with enough money to fill the hole created by the 12 billion lost at merrill lynch. in december of 2008 did you promise mr. lewis that you would provide bank of america with enough capital to fill the $12 billion hole created by losses at merrill lynch? >> i did not promise any specific amount of money. what was committed was the commitment of the government to work in good faith with bankamerica to develop a contingency plan that would assure the viability of the company in case of a financial crisis. >> chairman bernanke, in an e-mail the committee recently obtained under subpoena to a topic employee of the new york federal reserve communicates with your general counsel regarding questions the sec had about the bank of america bailout. can you explain why bank of america would complain about so

one criticism i would have of the deal the bush administration struck, it didn't strike a better deal on how to get out the logistics and supply chain from the russians. that seems to me to be a key national security interests, not just for creating jobs in the united states, but the defense relationship. i don't see that going away anytime soon. i don't see that in the and the united states will ever have the kind of alliance relationship the u.s. has with its allies, the u.s. will be the key arms supplier any time soon to the united states. it is in gauge in multilateral defense, and all seat conventional defense -- multi dimensional defense, and it is understandable as neighbors, at the same time, it is a concern about this matter of chinese deployments and interest, it has quite an ongoing relationship with russia in the defense sphere and relations with the united states and japan and singapore, the new ones, the burgeoning new ones or the late come ears -- latecomers, quite closely. i think that the u.s./in the a strategic relationship is more akin to what nixon and kissinger tr

if there's one thing about your record that's clear, you have experienced negotiating deals. what do you believe your leverage with the government was at the end of 2008? at the end of 2008? >> the only leverage i would say we had was that two honorable people had given me their word they would try their best to find a solution. >> isn't it true it was because bank of america was a big bank. if you hadn't been a ceo, been the top executive at the mid sized or small regional bank and acquired a similar size bank, do you think the federal regulator would have behaved in the same way? >> i don't think i have a favorite son from the e-mails you just read. >> if you were a smaller institution been taken over and liquid ated? >> i can't speculate on that, sir. >> we have a large financial institution that doesn't face the same consequences for management of small ones and the fed had an opinion there was considerable evidence of mismagement. there's been a misconception here that the government put a gun to the head of bank of america when it's quite possible it was the bank of ame

voting deal less persuasive. >> i disagree. they are fundamentally different. >> one is political and one has to do with life and death. they're different in my opinion. >> we use neutral and detached principles in making decisions. it was not a political component in the decision to seek releasing any material and withholding others. there was no political consideration from my part at all. >> one involved nothing but a matter of important legislation of a political nature and that is what you do not want to release. you were willing to believe what the attorney general believed was damaging to our national security. >> i am the attorney general of the united states and it is this attorney general's view that that was appropriate. i respect your opinion, but i had to make the decisions holding the office i now hold. >> with regard to guantanamo, we do give them now initial review, a throw initial review. we give them an annual status review. i am not sure what tells you are going to add to that. we are doing those things to tr

what we can have a deal with here is the student loan area. this is a chicken and egg test -- case and that you have a, if you are even inclined to move into this area and the costs of their medical education is in the range i think everyone and acknowledged the 150,000 that bernie mentioned it is not unique to vermont and maybe a local lumber then your ability to actually make that choice is the primary care for the very reasons you have identified are so low that your ability to pay off that 150 is daunting is so even if whether it was out to wisdom or lifestyle questions the decision has been made for you whether you like it or not you are going to have to move into an area that gives it a greater income capacity to meet those finish obligations to have incurred. if you can begin that process by saying we hang it to a medical education for less than the 150 provided you are willing to really spend time in this primary care area which we all acknowledge where the gaps are then i think it's easier for a person to make the choice. the reimburs

how big a deal is today? >> it is a huge deal, it is not to be underestimated. i was just telling dr. sanjay gupta that in the 80s when i was in congress, it took 3 or 4 attempts to pass a bill in the house and the senate that prohibited smoking on international flights, we didn't dare take on domestic flights, and we lost it 4 times in a row. they have a right to lobby, that is legitimate, but it shows you how attitudes in public education have changed over the years to the point where we can regulate nicotine and tobacco frontally by the government. is a huge achievement because it is health problems. >> we talk about preventable health problems all the time. $100 billion a year going to treat tobacco related illness. when you think about something like this happening, so many smokers begin early in life, before the age of 19 and continue smoking into adulthood. when you decrease the amount of advertising geared towards kids, doesn't make a difference. is this going to have an impact? >> absolutely. the reduction in cigarette smoking over the last decade has b

i mean, this is really for our people who deal with turkey. i will say that, with respect to iraq, turkey is very active. turkey has a number of economic projects under way in iraq. they've been very much bolstering their relationship with iraq and i know, having talked to turkish visitors, there is a great deal of interest not only in the northern part of iraq but also in bolstering their relations with the shiite part of the southern part of iraq. so i see a turkey that is increasingly interested in having a good relationship with iraq and we very much welcome this process. >> president obama's speech in cairo has produced a lot of renewed hopes for the arabs and for america and their policies there. can you reiterate for us and for the other audience that you are looking forward for the day when america leaves iraq as a one country united and sovereign? i mean, united, not like what vice president biden in the past has looked for, a division of iraq to three parts. >> we are very interested in having a long-term and successful relationship

that deals with reimbursement rates among other things. in many ways, we're not putting enough money into primary health-care. too many doctors are going into specialty care. the conclusions of doctors and specialty care is driving up the cost. what is going to happen? i do not see a crystal. i think the situation today is a negative nine flux -- the situation today is significantly influx. we do not know what is going to happen. i would conclude by saying that i hope that the american people get actively involved in this process. i hope that they will demand that health care in america become a human right, that all of us have that regardless of income, and that we have a simple, comprehensive, high quality system. host: senator bernie sanders of vermont, thank you. guest: thank you. very nice to be here. host: one of the headlines this morning dealing with politics can be found inside "the hill" newspaper. this is part of a fund-raiser held here in washington that raised $14.5 million for house and senate republicans. we want to come bac