countries that we're competing with, that it will require some difficult decisions around those up sentives, and we think comprehensive reform involves reviewing all of those in a very thoughtful way. .. but with the some of its parts or a lot of special tax preferences for individual interests that are not going to want to give it up including the preferences that are to the benefit of your companies. >> to be specific when we do most in the u.s. i take it and adjust the r&d credit. we do a lot of manufacturing in the u.s., take advantage of the manufacturing credit and i would trade both of those for a competitive global statutory rate. >> you've got a separate area if this all came to pass and came back to the finance committee and we had to start doing some serious looking at where you take things out of the health care system particularly medicare and medicaid you want to make some suggestions? >> well i think that similar to the discussion that we just had to the previous question in terms of there are going to be put and take i think it is true of our health care system and specifica

24 research and development tax credit around the world, and this is an area where having the up sentives -- inverettives to develop in the u.s. has a real impact on decision making. one small company example which is my own. we, in the last year, 2010, added about 20% to our employee base, about 20% hires, which is good given the economic climate, but only -- that's the good news. the bad news is only about 15% of those were in the u.s., and a lot of folks might immediately conclude the jobs were sent to india or china, but they actually went to canada where they have the most aggressive research and development tax credits. we can learn from them. it's not the only changes, but they do a effective job of making it an incentive to invest in the local market. >> mr. merlo? >> we are a domestic company, and i'll just talk about the u.s.. i'll cite two examples in the remarks in accelerating investments in the infrastructure and creating jobs. looking across the health care space, we have a problem with the health care system. there's about $300 billion spent annually on unnecessary medical

and i think combination of the committee with a strong inge sentive to act now and a backstop that will action either through the automa'am i can mechanism or subsequent action by congress and a national debate on priorities gives us a chance to get beyond the... what washington witnessed. rose: how much do you measure the defense... everybody thinks defense is on the table and a lot of people say it should have been andt should be. do you agree with that? >> i think everything s to be on the table. i do think defense has to be on the table. >> rose: so we've moved to a new place in this discussion about budget in which there's serious people raising serious questions about the size of the defense budget. >> i think defense has to be on the table but it also is important that a decision we make on the defense budget has to be tiedo a strategy for our national security. one of the tngs the president said when he reacted, say, to the recommendations of the bowles simpson report, one of his reservations about it was th it had a much larger cut in defense than he could reconcile with the na

the markets the way they operate today there is a difference in cost particularly with the new up sentive rule -- incentive rules. i think the pricing is identical between a large and small servicer. we advertise we service locally. that's one of our key advertising points, and we're proud of that, and that brings us in business. >> you still don't want national standards that are the same for you as they might be for jp morgan or something like that? >> no, we don't. we do not want the prescriptive standards. we've been successful. our late rates show that. i'm cautious that we have standards that are requiring us to contact people on nights and weekends when we don't have those types of issues. our issue is whether they pick up the phone. we've gone to the point of using cell phones so they don't identify the numbers when they are collecting, and we change the number monthly. >> thank you, i'm over my time. >> as a -- has a comment to make. >> i would just say there are ways to create standards where the regulatory oversight body can work with the smaller community banks or others can s