effective rate and what is their published rate. and because there are so many exceptions, more than 5,000 in the last ten year as loan, that people are paying all kinds of different effective rates. so i think this will be more transparent it will be more predictable what your rate is going to be. >> but it sounds really popular, that we will get rid of exception and these deduction but when you look at them they are things like the mortgage deduction, the deduction for employer health-care expenses. you haven't said which ones. have you going to get rid of popular things like the mortgage deduction. >> we don't need to get rid of them all to get to 25. so part waf we want to do now is that a public process, obviously having these benchmarks in our budget is very important that send a signal the direction we want to go. and that is what a budget document is now we need to continue the hearing process and really continue to have a dialogue with the american people about where is the political consensus on this. do people really want

you have at the end of this year, tax rates that are -- the lower rates are expiring. there will be a pop up in the highest tax rates in the country. one of the things that is important that gets missed in this conversation about rates is that there are a lot of businesses in the country that are run by entrepreneurs and small businesses and sizable or medium companies that are not incorporated. they are pass-through entities and they pay that rate. as individual rates go up for you and me, they also go up for those unincorporated businesses. >> let me talk about this piece. kellogg's john bryant's rate went up. bloomberg business wrote that question whether ceos are worth their salaries and benefits. they have been consistently overpaid. what is your reaction to that? i want to show the viewers from the bloomberg piece and cnn money. compensation rose from $5 million to $8 million. shareholders ls 14% in that time. in 2010, ceos pay rose 36.5%. are they overpaid? >> i don't think so. there is no question that when you look at the trends and ceo compensation -- because

will have the highest corporate tax rates on the planet. and after japan lowers its rates. and someone here says that's no laughing matter for american workers. hi, everyone, i'm brenda buttner, this is bulls and bears, and let's get right to it. the bulls and bears this week, gary b smith, tobin smith. jonas max ferris along with john and david mercer, welcome to everybody. gary b, the highest combined tax rate, will that lead to more unemployment. >> we'll soon be number one in unemployment if it continues. look, if it says that higher corporate tax rates don't affect unemployment they've never worked in business at all. here is what happens, we've already seen this, corporate tax rates remain high. what are companies doing in this day of mobility, they're outsourcing, they're relocating and expanding faster in foreign countries than they would over here. they're hiring less people because a higher corporate tax rate goes right to retained earnings. they have less money to hire people. if you don't believe it, just look what's happening with the the states, brenda. we've

deputy speaker, that brings me to the rates of income tax and the additional rate of 50 pence. this tax rate is the highest in the g-20. it is higher not just than the tax rate of america, but also a major european countries like france, italy and germany. it is widely acknowledged by business organizations and international observers as harming the british economy. like the previous chancellor who introduced it, i've always said it was temporary. i also said three years ago that i would not be prepared to reduce it while we were asking the whole public sector to accept a pay freeze. a 50 p tax rate will all the damage it does to britain's competitiveness can only be justified if it raises significant sums of money. in last year's budget, i asked her majesty's revenue and customs to look at the evidence and look at the self-assessment tax reveepts that have come in since this january. i'm publishing the report today. and what it reveals is that the 50 p tax rate has caused massive distortions. hmrc find that an astonishing 16 billion pound of income was deliberately shifted int

you lower the rates. >> chris: i want to switch to another interesting story international finance story we reported on earlier in the program; that is, some european countries are getting serious now trying to tax the carbon emissions of airlines that fly over their air space the u.s. airline filed suit on germany that is going to have a tax for the airlines, itself. >> this is not a time in europe i'd look to raise taxes on anything. this is unlikely to have an effect on what is at the root of the proposal. it's not going to do anything if you are just talking about europe. you imposing taxes. even though the taxes start low, but how often do tax goes up? >> i agree. you have seen push back from a variety of countries that are not often on the same side. china has already canceled or threatening to cancel air bus orders and so forth. the europeans add we can't just put the tax on the european carriers because it puts them at a come pettive disadvantage with other carriers but i can see the irritation by

the rate of growth is modest. under current law as you know, on january 1 of 2013, there will be a major shift in the fiscal position of the united states, including the expiration of a number of tax cuts and other tax provisions, together with other provisions that, together, create a very sharp shift in the fiscal stance of the federal government. i think that we can achieve the very desirable, long run fiscal cop sol dags that we need, and we need to do soon. but we can do that in a way that doesn't provide such a major shock to the recovery in the near term. so i'm sure that congress will be debating the details of this o over the next year and taking into account protecting if recovery and assuring we achieve sustainability in the long-term. the second part of your question, mr. chairman, we are seeing manufacturing and industrial production in general that have been leading the recovery. housing, of course, is lagging. but generally it's been automobiles, of course, being one part of manufacturing. but gener

. >> tax rates matter for growth. the 70%, that was a period, i don't know what you mean by effective tax rate for the top 1%. you just don't have good data on that. that was a time where basically all sorts of ways to avoid taxes. it was not an efficient system and of course some people can find a way to get around those high marginal rates. 70%, you get to keep 30% of what you earn, what's the point of trying to do things to get a raise, trying to put those better, efficient ideas into practice? it just across the board, and there is a lot of that. >> the 0.01% are not trying to get a raise, they own the company. the money that's coming in is capital gains, it's dividends. we're talking about two different things. it's not about working harder, right? that's what part of the debate is about. >> capital gains of course is a reward taking a risk, investing, whether you're in the top 0.1% or trying to get into the top 0.1%. it's capital gains reward and taking the risks and if you reduce that reward you'll get less of

basic rate income tax, the small companies rate and the small corporation tax rate. i'm increasing the rate of bank levy to 0.1 0e 5% to next january so that additional corporation tax cuts do not benefit the banks. and -- and so our levies will in addition to raise the 2.5 billion pounds a year that we said it would. that brings me to the main duties. let me start with alcohol duty. the government will shortly be publishing its alcohol strategy to address the growing problem of alcohol abuse and the many billions of pounds it costs our nhs and the criminal justice system. but today i have no further changes to make to the duty rates set out by my predecessor. turning to back duty, smoking remains the biggest cause of preventable illance and premature death in the uk. there is clear evidence that increasing the cost of tobacco encourages smokers to quit and discourages young people from take it up. so duty on all tobacco products will rise by inflation. that's 37 pents on a package of cigarettes and this will take effect 6 p.m. tonight. one area will.i.am today makin

rates are extremely low. so if they do start to rise, the gearing impact can really be quite significant. so the bank of england has to do all it can to keep interest rates low for a very long period of time. >> that's what banks are saying is since that went, the cost of funding has gone up regardless and why they're putting up mortgage rates. >> well, i mean, suddenly if the process were to continue, the bank might have to start contemplating additional measures, yes. but at the same time a lot will depend on the general financial environment where, of course, generally confidence has been improving. >> julian, stick around. christine, what's coming up? >>> plenty, ross. you and i know coming up next we have shares of deutsche post watching their shares closely. they see sales and operating profit edging up this year. details after the break. >>> welcome back. well, japan's increasing dependency on crude imports has swung its current account to a record $5.4 billion deficit this january. the world's third l

tax rate. i'm also increasing the rate of the bank levee from 0.15% so additional tax cuts do not benefit the banks. >> and so our levee will in addition raise the we said it . now, mr. deputy speaker, that brings me to the main duties. let me start with alcohol duty. the government will be publishing its alcohol strategy, to address the growing problem of alcohol abuse, and the many billions of pounds it costs our criminal justice system. but today i have no further changes to make by the duty rates. turning to tobacco duty, smoking remains the biggest cause of preventable illness in the u.k., there is clear evidence that inning creasing the cost of tobacco encourages smokers to quit and discourages young people from taking up. duty on all tobacco products will rise by 35% above inflation. this will take effect 6:00 p.m. tonight. one area where i am today making substantial changes is gambling duties. the treatment of gaming machines is being repeatedly challenged by operators in the courts. s

the rates of food spoilage, rates of reaction, are vital knowledge for our global economy. a far-off country like new zealand, for example, is almost wholly dependent on overseas markets for its lamb and butter and cheese. how do scientists study food spoilage and preservation? reactions that cause food spoilage aren't different from what chemists study in pure chemical solutions. i always say about food-- it's the study of messy chemistry. i say that because in a food which has so many different organic compounds and inorganic compounds together, there are lots of different reactions that cause spoilage. we can narrow them down to several classes. one, reactions that are enzyme catalyzed. when you bite into an apple, it starts to brown. that's an enzyme reaction. there's reactions that make it go rancid. if potato chips sit around, fat goes rancid. modern techniques of food preparation and refrigeration have greatly reduced spoilage. still, the shopper might like further proof that reactions have been retarded, that food is as fresh as possible. one of the interesting thin

mortgage rates are are low. so if you're able to buy a house, you can get an awful lot of house for your monthly payment now compared to where you were a few years ago. but being able to take advantage of that affordability requires among other things that you get a mortgage. and this graph show what's happening in the mortgage market. the lines show the -- the bottom line shows the .10% of people receiving mortgages. before the crisis people with relatively low credit scores were able to get mortgages, but since the crisis you can see the whole bottom part of that yellow area has been cut away implying that people with lower credit scores and 700 is not a terrible credit score are unable to get morms. just in general, there's been -- there's been much tighter conditions in terms of trying to find a mortgage. so even though housing is very affordable, and monthly payments are affordable, a lot of people are unable to get -- are unable to get mortgages. so the implications for the economy with a lot of excess sup

as many of you know, there's a direct correlation between the drop out rates and incarceration rates. if i was to offer up a graph of our increasing drop out rates and lay it over the incarceration rates, those graphs would almost look identical. since we can literally identify, then it would seem to me if we take a step back, we could say let's deal with this drop out crisis firsthand. and to me, the youth promise act represents that. as was mentioned earlier, the u.s. has the highest incarceration rate in the world. the focus of the slogan-driven sayings falls on minorities and african-americans. the drop out rate is driving the nation's increasing prison population. it's one of the country's costliest problems. researchers found the collective cost of the nation over the working life of every high school dropout is $292,000 per person. we lose too many of our youth to a lifetime cycle of incarceration way too early. to me, the youth promise act directly addresses these root causes. the promise model intervenes in the lives of our youth before they end up in the juvenile correctiona

savers puts a negative real interest rates it's not there also negative nominal interest rates as the idea floating around that selling sovereign bonds a discount so that they would mature a loss this type of way so you're guaranteeing losses and the reason people would sign up to a negative interest rate is say u.s. treasury bond pays a negative one percent is that they can still use it they would prefer to use as collateral because it is very liquid they hope that they can invest or put the collateral into an investment that would exceed the negative interest rates the stated coupon negative interest rate of one percent they think of four or five percent remember the scam with the wall street bankers the fed would lend them money at one rate interest rate that they would immediately lend it back to the fed a two or three percent higher right so these interest rate boondoggles are going on perpetually and interest rates are a completely fungible item there they have no relation to any underlying economic activity whatsoever they're just completely pulled out of the tat of the central

inua tax rate goes to 44.8%. canada just lowered their tax rate on all their businesses to 15% this last january. china is at 25%. ireland is at 12.5%. england is going down to 23%. we've got to watch our competitiveness. we want a simpler, fairer and more competitive code. with that i yield and recognize the gentleman for one minute to close. >> thank you, mr. chairman. i would invite all my republican colleagues just to present us with an analysis from joint tax committee that supports everything you've been saying here. because i put up in front of this committee a series of analyses that show that when you drop that top rate 35% to 25%, it gives a windfall to the folks at the very top paid for by middle income taxpayers. we should have a fact based conversation. i didn't hear one fact disputing the information i put up there. mr. mulvaney, i think you know that under this president, making work pay, payroll tax credit, middle -- the tax credits under health care, middle income taxpayers have seen a large amou

rates can go below zero. we have an economy where demand falls far short of the capacity of the economy to produce. we have an economy where the durable goods is higher than the ability to produce. we can't make interest rates lower, of course, only can go down to zero. and again, i would argue a healthy economy with good returns is the best way to get returns to savers. on providing credit, i guess i would make one observation which was the news this morning, that bank lending increased last quarter at the fastest rate since the recession. >> thank you. >> we also, the housing market has declined in i think 19 or 22 major markets. we are seeing some signs of deflation. mr. watt? >> thank you, mr. chairman. i just wanted to let my friend know that the protocol has been to name bills after the people who head the committees of jurisdiction, which is why the bill was called dodd frank. we had the majority in the house and the senate. when it was split, it was falba falbane ochsley, which he didn't like, i guess

at this superlow rate, and boosting the economy. is that the right take away? >> that is. in our view it is the right take away. the fed has a conditional commitment in place to keep short-term interest rates near zero through late 2014. and recently with the improvements in data and better job numbers, many investors have thought well maybe the fed will back away from that pledge to keep interest rates low until the end of 2014. and the chairman seemed to be saying today, a little bit improvement is good. we're happy with that but not so quick on raising interest rates. we're comfortable with where we are now. >> susie: so that doesn't seem like it's too much different than other messages that he's been making whether on capitol hill on or private speeches. so why the big rally in the stock market today? >> well, indeed it is not a different message. and i think one thing that the fed may have made a mistake on, about a year ago at this time was talking too quickly about what we call the exit strategy or how this accommodation woul

basic rate income tax for small companies' rate and the corporation tax rate. i'm also increasing the rates of the bank levy to 0.105% from next january so that the additional corporation tax cuts do not benefit the banks -- [laughter] and, and so our levy will in addition raise to two-and-a-half billion pounds a year the -- [inaudible] now, mr. deputy speaker, that brings me to the main duties. [inaudible conversations] [laughter] let me start with alcohol duty. the government will shortly be publishing its alcohol strategy to address the growing problem of alcohol abuse and the many billions of pounds it costs our nhs and the criminal justice system. but today i have no further changes to make to the duty rates set out by my predecessor. turning to tobacco duty, smoking remains the biggest cause of preventable illness and premature death in the u.k. there is clear evidence that increasing the cost of fact encourages smokers to quit and discourages young people from taking it up. so duty on all tobacco products will rise by 5% above inflation, that's 37 pence

, their labor rates are too high. it's not a question between -- as the film portrays it -- saving the auto industry and letting it die. it's between making a choice to have the taxpayers subsidize too much -- >> that's the thing. i know you're keen on this topic. don't you think the country hates bailouts? of any kind? >> of course they do. >> so why is the president touting his bailout of detroit? >> because it took courage to do that, larry. it took courage to do that, larry. they'll tell you there was no private equity to bail out the t country. >> you'd have a better business model. >> romney said if you bail out detroit, you mow what? the auto industry would die. it did not die. clearly he was wrong. if you guys want to run on defending romney on the auto bailout, i'm welcome to have that debate because you will lose. the american people support that. >> i was completely opposed and i still am opposed. jennifer's right. what is so courageous about the president spending the taxpayers' money on his union friends?

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rate. adds a 2% increase to that key debt to gdp metric in 2020. so let's say for argument sake an 85% participation rate right now, that translates to a debt-to-gdp number of 126%. too high arguably are for the imf in this deal so weigh wait. more details interest venizelos. the question over how likely that is and something the french minister hinted at. ross, back to you. >> well, of course we spent months trying to get this deal together so we don't get into position where we trigger cds so maybe we'll see what happens as far as that is concerned, julia. the key point is it doesn't really do anything about the long-term stainability. there are still those who think we'll be back with a third restructuring at some point. at that point it will be public holders of debt that will have to be involved. >> reporter: yeah, absolutely. after this debt down if this goes ahead then the split is more 50/50 of the official holders of this debt, and that is the key question and what we've seen in th

whenever the type comes for the fed to raise interest rates we can do so by raising the rate of interest we pay to banks in reserves. so that will lock up those reserves, raise interest rates and seven to tighten monetary a the balance sheet stayed large could tighten monetary policy. the second tool we have is what's called draining tools. basically we have various ways that we can drain the reserves from the banking system and replace them with other kinds of liabilities even as, again, a total amount of assets on our balance sheet is the third and final option is to let the assets run after as they mature or to sell them. these are treasury securities. these are government guaranteed securities. it's certainly possible that the interest rate that will prevail when we sell the securities will be higher than it is today. in other words, we'll have to pay a higher interest rate in order to make investors willing to acquire them. that will be part of the process. that will be time when we're trying to raise interest rates. it will be reserve what we did when we bought them. at that point,

they will weigh on the rates.ut some actually believe a little rise in rates gets some potential home buyers off the fence because they're worried they might miss out on those low rates, might want to buy now. little hopium, maybe. a little more on the blog. >> there is always a silver lying, diana. >>> we know home building stocks like d.r. horton and le nar and others have had a big year and really a big 52 weeks. if you want to invest in the whole housing turn, assuming you believe we are going to get one, you've got to look at what makes up a house. we did a little bit of work for you because that's kind of like what we do. here's our housing halo, right? not a complete list. but just some of the bigger names and companies in the space. you buy a home, you're going to put some furniture in it, right. ethan allen up 13% year to date. lay z boy has done better. don't like the lime green walls with the shag rug and mirror on the ceiling, baby, you want to repaint it. ch sherwin williams. gf the biggest roofing ma

when you look at how much interest rates change including mortgage rates and how much interest rates move, based on historical relationships and can only explain a very small part of the increase in house prices. in other words, it was way too large to be explained by the relatively small change in interest rates associated with monetary policy in the early part of the 2000's. the final piece of evidence i would raise is the timing of the bubble. any economist who is well known for his work on baubles, including the housing bubble, argued that the housing bubble began in 1998. that was well before the 2009 recession and before the cut in federal reserve interest rates. moreover, house prices rose sharply after the tightening began in 2004. the timing does not line up particularly well. what the timing does suggest, there might be a couple of other possible explanations. 1998 was right in the middle of the tech bubble, the tech boom. it could be that the same psychological optimism, the same mentality that was feeding stock prices may have been feeding house prices as well. another po

see unemployment rates for blacks thatre dble unemployment rates for whites. so if you are an unskilled worker out there looking for employment, regardless of whether or not you are male or female, you're the person that's really struggling right now to find a job. >> suarez: diane swonk, quickly-- quickly before we g you heard lisa lynch talk about headwinds. what will you be looking for in the coming months to see whether these job growths have legs, whether they can sustain for the rest of 2012. >> well, the first one is there was a bit of a help from the weather. and so e weather id help some of those leise jobs. we were golfing, i wasn't but i knew people who were golfing in chicago in january and that just doesn't usually happen. and so that did help some of the leisure jobs that we saw there. but more importantly, you really want to look for oil prices. oil prices are the biggest nearterm risk. you want to watch that labor force participation, is the hope going to stay, are people throwing their hat back in the ring. that's really criticalment and most

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that's not why rates are going up. market goes up along with the economy, along with interest rates. >> are we saying that if the fed even begins to gaze at the punch bowl, thinking, even just thinking about starting to move, nudge it just a little bit, you don't think the stock market would go down on that? >> as long as they are expectations of growth in the economy and expectation is not out of control, i think steve made the right point there, no, not necessarily. i don't think mr. bernanke is necessarily going to be controlling this thing as much as he thought. steve's comment about pushing on a string there is the applicable phrase there. >> bond yields are at the highest level in more than four months. if yields keep going higher, that represents some competition to stocks, i think that's what you're saying, right, phil? >> right. >> but what bob is saying is absolutely accurate. even four-month high on yields are still talking about really rock bottom. >> remember a week ago, some traders were talking about the

growth rate of real gdp. the labor force and in the level of productivity, real gdp close to the rate of growth of its potential is normally required just to hold the unemployment rate steady. to reduce the unemployment rate, therefore, the economies must grow at a rate above its potential. more specifically, according to currently vepd versions of oakin's law, to achieve a 1 percentage point decline in the unemployment rate in the course of a year, real gdp must grow approximately 2 percentage points faster than the rate of growth of potential gdp. for illustration, if the potential gdp rate is 2%, oakin's law says gdp must grow at 4% for one year to achieve a 1% reduction in the rate of unemployment. in the light of this historic regularity, it is something of a puzzle. resolving this puzzle could give us important insights into how the economy and labor market are likely to evolve. to illustrate the tension, i'll show you a picture, consider the relationship between the recent changes in unemployment rate

you asked about interest rates on the second part of your question? >> will it risk fueling asset bubbles? >> obviously that's something we have to pay close attention to. we have greatly expanded our ability in the feds who monitor the financial system broadly to take a sort of macroprudential approach. right now we don't see any obvious bubbles in the economy, but certainly that's something we're going to look at and continue to monitor. >> thank you for your response. and mr. chairman, many citizens in the nation are concerned about the rise in gasoline prices at the pump, especially the working class. what measures can the federal reserve take to stabilize the recent rise in gas prices? >> well, we're concerned about it as well. it has a direct effect on inflation and it also is bad for growth because it takes away buying power from households. so it's a real concern for us. on the other hand, overall inflation is low and stable, so it's really a question of this particular product becoming more expensive relative to other products. and again, as

i want to to go back to an answer earlier on interest rates. you thought the risk of default was not a series -- obviously, it was catastrophic if it happened, but that the risk is you're worrying about interest rate risk for our financial institution to the economy. could you talk more about that, what would that ka that interest rate risks and what's the effect of the more normalized interest rate than the one we have today, which is at a historic low, isn't it? >> both short-term and long-term interest rates are quite low. our current expectation, as we said in our statement, is that the short run rate will stay low for a good bit more time. eventually at some point the economy will strengthen, inflation may begin to rise and the fed will have to begin to raise short-term interest rates. at the same time, stronger economic conditions here and globally will cause longer term rates to begin to rise. that's a good thing. that's a normal, healthy thing as the economy returns to normal. but if you have this, you know, of course depending on how y

their return rate of growth is 1%. what's the return rate of growth for the u.s. economy? the u.s. has population growth, strong immigration, and innovative economy. you add those components together and the japan like experience for the united states economy is a growth rate of 2 1/2%. >> if i could add one point there, productivity growth in the u.s. for gdp over the last year has been negative. the trend over the long run may be 2 1/2% but because capital formation in the business sector has been so depressed and because we went -- we had a huge boom inivity in the recovery we may be looking at several years.1/2%. labor force right now with the aging population is growing about 3/4%. maybe we get a little bit of rebound in labor force participation to discourage workers but there's no question that productivity growth is going to be quite -- could very well be quite depressed over the next several years which says 2 1/2% gdp growth which is pretty close to consensus gives you a fair amount of improvement in employment, okay, and one final point is that the data on employment are

a 90% high school graduation rate by the class of 2020. presidents since john kennedy have set goals for the nation to boost our educational outcomes. but today this civic marshal plan is a specific plan of action that puts in place benchmarks along the way to ensure that we make progress and chart our progress over time. it takes that national goal seriously, adopts a cohort approach. the class of 2020 is in fourth grade today. the plan targets the high school dropout factories where we're losing about half of the nation's students every year. and their feeder elementary and middle schools that brian gallagher will help us chart. it focuses on data driven, research. like all 50 governors in 2005 when they came together on that graduation rate compact, we worked with organizations to encourage such big institutional plays in alignment with these benchmarks of the civic marshal plan. high school, as we know, is insufficient. so we also highlight the goal of having the highest college attainment rates in the world. we have to double our rate

he lowered t marginal rate from 93% to 70%. he instituted the investment tax credit so people would invest in businesses. those are the things thaheanhe country get back on track economically. what did ronald reagan do when he inherited a difficult environment? he lowered taxes and simplified tax rates. now, this is happening around the world too. this is brand new news from great britain. british treasuryosborn on wedne that government will accelerate a cut in the corporate tax rate. they're going to lower their corporate tax rate from 26% to 25%. proposing to do. in addition, instead of raising taxes on higher income workers, they're lowering the top marginal tand re's the reason t they did it. many of you may recall they raised tax rates in 2009 onand . it said the high are tax rates created massive distortions and raised little extra revenue. osborn said other changes in tax laws would ensure the nation's wealthiest because you have greater economic growth. what we want to do is grow the economic pie for everybody and produ

>> lock in the debt. >> even though we said yes, rates will stay low, we are seeing rates with the tenas rates go higher? >> we are working on investments and trying to secure a 10-year paper. it could be that the debt is your best asset in five years. the u.s. is an amazing position because as our debt climbs, 15 trillion on the way to 20, we will be a little like japan paying a point more in interest. that's $200 billion. i'm not sure we can afford it and i don't know how the u.s. with this burden will handle what we call a normal interest rate environment. i don't know how the government will handle that. >> sorry pricing getting out of -- hard to capture now? you have been talking about this that real estate looks good for a couple of years now. >> for pension plans that are trying to achieve an 8% return, real estate provides an amazingly compelling opportunity. probably more so since the early 90s to hit the bogey with less volatility. the equity markets are interesting and bigger and more liquid, but i think real estate has an important place. i know we can hit the eights. the w

what we need is interest rates to go up. the federal government price fixed interest rates. its not letting the market determine interest rates. because interest rates are too low, americans spend too much, they consume too much, they don't save enough. they don't invest enough. the government is enormous. if you want to know why the budget deficits are so big is because of ben bernanke. if he did his job, if he let interest rates go up and refused to monday he ties government debt, congress would have no choice but to cut spending. but because ben bernanke gives them a way out, gives them an easy way out because he buys all that paper, the government gets bigger and bigger and bigger. the same mistakes took place in europe. look at what is happening in greece right now. a few years ago greece had very, very low interest rates. almost low as ours. and then they went up. because creditors got worried that they weren't going to get paid back. we can't pay our creditors back either. pretty soon they're going to figure it out. people think we're different than greece because we

rate. the fees that the d.o.e. can charge are very low. there is no provision for upside in terms of some type of an equity linked gain. so maybe there should be different packaging for riskier projects other than the utility projects. >> i thank you. i thought the senator made a lot of sense when she was saying right from the get go, nobody goes into this thinking that everything is going to be 100%, you know, winner and a dramatic opportunity for creating scores of new jobs and the like. taxpayers deserve better. i think this is another area, mr. allison, i appreciate your answer where we can do better for taxpayers in this country, better for some of the most exciting and promising technologies. i see senator sanders here. he talked a lot about the opportunities and renewable energy. i think we got a chance to make some exciting changes in this country. >> thank you very much, mr. chairman. i agree with my colleague. the taxpayers do deserve better. i appreciate your work on this. there

i mean, excuse me, guaranteed issue and community rating. and that's under the government's proposal would disappear. we would go back to the old system trk and under what i think is the -- the real question the court is asking, should be asking is, would congress rather go back to the old system than to take, perhaps, the risk that you're talking about? >> you -- you're referring to the government's second position. their first, of course, is that we shouldn't address this issue at all. >> that's correct. >> i asked mr. kneedler about what procedure, or process, would be anticipated for people who be affected by the change in the law, and the change in the economic consequences. do you have a view on how that could be played out? it does seem to me that if we accept your position, something, there has to be a broad range of consequences, whether it's additional legislation, additional litigation. any thoughts on how that's going to play out? >> well, if the court adopts the position that i'm advocating, mr. chief justice, i think what would