sought in this country and what the president, i think, is trying to do for us. >> suarez: douglas holtz-eakin same question. what does the right relationship between government and the economy look like? >> government has a role but i think the fundamental message of congressman ryan was that we need to identify that role and put the government back in those limited functions where it does things best. and i thought the most interesting contrast we saw last night was representative ryan taking on the biggest issue the united states faces-- the debt load that will, in fact, endanger our prosperity-- and identifying for a role for government as a way to decide what it does and does not do. in contrast, the president was essentially silent on this big issue. the most pressing thing that even his own fiscal commission has identified and he said nothing more than a figurative freeze on a tiny fraction of the federal budget and took a pass on the rest. so he didn't show the government stepping out of anything. and when it got the particulars, he said the right things about we can't predict the way

. -- symbolic says conservative economist douglas holtz-eakin, but still important. >> there is no tradition of cutting spending on either side of the aisle. so for legislators-- republicans and democrats alike-- to get used to the idea they have to vote on spending cuts is a very valuable thing, even if they're just small cuts. >> reporter: the year's main event will come this spring with a show down close to when the nation hits the debt limit. the result says hoagland is likely to be an agreement to put limits on spending as a step towards budget discipline. >> if you do not meet those targets, fine, congress and the president there will be an automatic process that will make across the board cuts-- not the right way to govern, but there is some penalty for not acting. >> reporter: if all this sounds like abstract washington maneuvering, it isn't. analyst stuart sweet says it will affect investors directly. >> all sorts of spending under the knife. if you own shares in companies that do business with the federal government, you won't like the news. >> reporter: republicans like the new ho

douglas holtz-eakin was a member of the minority and he joins us again tonight. doug holtz-eakin, you just heard phil ang lee december. how much does that undermine the force of these recommendations? the findings? >> i certainly believe that along with phil thomas and keith hennessey, the others who wrote along with me that we have a much stronger theory of the case. in looking at the facts we've assembled a much more compelling response to what congress asked us to do which is to explain those things which delivered such a traumatic financial crisis. i would agree with phil, though, that we should congratulate the staff of the f.d.i.c. and we should be proud of the legacy and the archives we left behind. those are facts available to the public, historians and, much like that great depression, i suspect the real causes of the financial crisis of 2008 will be debated for years and i would fully expect that someone smarter than me, better positioned than me years from now can use those materials and will come up with yet another explanation. >> woodruff: i have to

douglas holtz-eakin, if you can comment on uncompensated care?dicare fall into the category of on compensate the care? >> they are shifting from government programs where medicare pays about 70 cents on the dollar and medicaid pays even less, 55 cents on the dollar depending on where you are. those gaps have to be made up elsewhere. >> is it your assertion that the health care bill immensely grows the medicare rolls? >> we put 16 million americans into a system that at present are twice as likely to go to emergency rooms rather than having that care on regular -- in regular settings. >> would it be conceivable that any federally initiated medical liability reforms that they might preempt some state medical liability laws? >> there is always the option of pre-emption. it would depend on how the law was written. we know that state level experience has shown that malpractice reforms have been effective in controlling some of the costs. if you have a strong federal pre-emption that applied universally, you have [unintelligible] >> i say that because

douglas holtz-eakin. you have five minute. >> thank you. it is a great pleasure to be here. i appreciate the opportunity to appear. i want to make four points that i will briefly summarize here. the first is the mandate and affordable taxes in the affordable care act are an impediment to jobs and growth in the united states particularly at this moment and balancing the affordable careful raise cost of insurance. this will crowd out scarce resources for hiring and increasing pay and directly hurt consumers. the affordable care act has strong incentives to drop insurance. to the extent they do so more than the cbo anticipates will not only have strong disruption in labor markets, contractual relationships but have a larger budgetary cost associated with the act anticipated and finally even if that doesn't come to pass the affordable care act is indeed a budgetary danger at an important moment in u.s. fiscal history and a strong step in the wrong direction. let me begin by elaborating. of my views on the affordable care act are well known. we are in a situation where the fiscal

douglas holtz-eakin the digital i am sure you watched the speech the president gave. one of the thing that struck me is his presentation of a straw man argument which is the assertion, we even heard that asserted today that we don't want to go back to the days of folks being pressed out and not included on pre-existing conditions. there is nobody that is proposing that. house republicans, chairman camp offered a far--thoughtful piece of legislation that dealt with that through high risk pools. can you comment generally on this whole notion of two different visions? in responding to mr neil, the underlying premise of this new law is to expand coverage by putting people on medicaid. you alluded to this in your brief opening statement about entitlements outpacing the economy in general. give us a few thoughts on that. >> i think it is a straw man argument. you roll the clock back to the beginning of the debate there with a bipartisan agreement that it would be desirable to control health care spending in the united states and cover more americans with affordable options.

and douglas holtz-eakin tells me are 20 physicians in the house of representatives. >> 80 new members in the house, 20 are doctors. >> 20 are doctors. i hopefully will hear from all of you in the debate that starts later today. [inaudible comment] >> how hot -- hostile the medical practice has become. [laughter] >> the problems are solvable. >> we're glad to see you there. yes, sir? >> doug, you mention a couple new entitlements, one of which is the class act. how there's no requirements for reserves, they have two protected classes that only have to $5 in premiums, while others have to pay $240 to make that up. can you talk about the sustainability of a program like that? >> so the class act is a new long-term care insurance program who's basic structure on paper is pay premiums in while you work. once you pay for five years, you are eligible for benefits. we've seen the kind of structure before, social security, medicare, they are in deep trouble given the way they are structured. and, you know, just to quote someone who would know a lot about this, senator ken conrad chairman of th