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tv   U.S. Senate  CSPAN  September 19, 2011 12:00pm-5:00pm EDT

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adding that to the bill and getting rid of something elsesome. >> well -- >> the corporate we werings -- >> let me say from a political perspective, the obama administration, i think what president obama did was stake out his ground in a speech last week that i think was very pleasing to many democrats, obama the fighter. i think his nature is a pragmatist. i think they value compromise politically because they believe it is what independents want. remember, 40 % of people are going to vote against barack obama if unemployment rate drops to 4%. 40% are going to vote for him if unemployment rate goes up to 14%. it's the 20% or probably less in the middle that they're fighting over. those people in the obama administration believe want compromise. they want to feel like government is working, they want to feel like he is what he promised to be which is a change
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agent to solve intractable problems. that mentality makes me think that they are open to certain compromises because they want to get a deal done. um, he may well choose this to be his moment in which they don't want to get a deal done. but i believe there will be some, some flexibility there. >> right. >> can i comment on that? tell me if you think this is right. i think, particularly, with the pay-fors, they'll throw them overboard tomorrow because they were trapped into the pay-fors they've got. they can't propose entitlement reforms which is what they should do because they're afraid of that politically. they can't propose discretionary spending cuts which leaves them with taxes. it has to be taxes. so they go back to the political philosophy that's been there since 2007 when he started running, let's tax rich people. so you go after this collection of pay-fors that looks like rich
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people and oil companies, and then gene sperling arrives today and says if they want to do it some other way, that's fine. they want the politics, but they don't care about the policy. >> i mean, i think i said this with the debt ceiling too, i believe that they want a deal because they think a deal is what the american public who are still persuadable and undecided about the election want. >> despite all polls to the contrary. >> do you think i'm wrong, though, andy? >> i think they do want that -- >> yeah. >> i think they've failed in terms of convincing independents with what he's been doing. >> right. >> so it's not as if he's holding firm in one level of the direct rate. he's losing everything, so it does make you think he should reconsider a little bit. >> but do you think independents have just, they're tuning the president out, or are they still persuadable? is. >> i think 14 months before an election nothing matters, you know? it's kind of like your lehman
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brother predictions. someone wants to do predictions. 14 minutes before an -- months before the election and see the accuracy. >> one thing that the obama administration and his political team have taken, to andy's point, is that, you know, 14 months, let's say 14 months before the 2008 primary or let's say four months before the first vote of the 2008 primary what was the storyline? why isn't barack obama moving? hillary clinton's going to be the nominee. i think that they view this conversation as well as many conversations going on in washington including everything that i write as something that is fundamentally disconnected from regular people, that they believed in conventional wisdom, barack obama would never have run, and conventional wisdom has been wrong throughout and it's wrong again and they will be right. obviously, we're going to have to wait 14 months to figure it out. they believe he is in the white house because he did not listen to people like us, and that does
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not surprise me then that they are kind of going their own way despite the fact that even independents are actually more pessimistic about president obama's handling of the economy than the overall electorate. >> andy, do you think looking back now that we had this huge debt fight, now we're having the supercommittee and another round of stimulus that would have been smarter for the president to have embraced his own debt panel back in december? >> >> yeah, absolutely. i mean, i think everybody gets 20/20 hindsight, you know? i think the disappointing thing about the simpson-bowles commission was that three republicans who had sort of been heros historically for debt reduction, hensarling, ryan and kemp, voted against it, and the president didn't embrace it, and now everybody looks back -- at least for the sake of the country -- and realizes that might have been a safer way out for everybody to sort of move forward. so, yeah, i think it was a very big strategic mistake that when it came around to the debt ceiling, it was kind of like where were you when we were having the discussion when it might have really mattered?
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>> and do you agree with that? >> oh, i absolutely agree with that. >> and i think they, i mean, it is the nature of presidencies to never admit you're either wrong or thought anything other than the decision that you made, but i think they would, i think they would acknowledge that. privately, certainly not publicly. just because i think so much of the way in which the debt ceiling fight played out and the way in which it alienated people from politics in general, congress, president obama, the process became the story. the process of the nastiness of it, the dealings back and forth and the process anticipated everyone. embracing simpson-bowles, i think, may have saved you from that protracted process fight that made washington just look terrible. >> i think this is actually a key moment because, um, you know, the president did not embrace the bowles-simpleson commission, there's nothing in his budget that reflected any
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concern about this problem. it then exploded into a big process story. they had a crucial moment, spit the bit on a deal with john boehner that actually was a good deal for them, bad deal for him, and he was willing to do it, and they got greedy politically and wanted more, and i think that was a huge mistake. now the question is will they, in fact, change the way they operate? is there's a lot of evidence out there that it hasn't been working. will they change what they do? if you look at the joint select committee, the supercommittee, you know, the 12 apostles, whatever you want to call this process, it's really just congress legislating. yeah, there's expedited procedures and there's lower thresholds, 50 votes, but this is congress passing legislation to address national problems. but when you have big national problems, congress legislating never works without white house leadership. and the question is, will he lead on this process or not? and if he doesn't, if he continues the start sort of tradition of the obama administration, we're not going
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to get anything out of the joint committee. >> i mean, the president keeps saying that this new package is full of things that republicans have supported before and bipartisan. do you see it like that? is it full of republican ideas? >> no. this is full of warmed-over proposals. that is for sure. all the pay-fors and all the proposals that we've seen before, and there are some republicans have, in fact, voted for it. there's no question about it. but i don't think of extending 99 weeks of unemployment insurance as the heart of republican orthodoxy. >> i think it's just unfair to say that, first of all, there's a lot of hypocrisy in this town in the case we haven't all found it recently. i think it's amazing we spend $ 120 million to rebuild iraq and afghanistan, but we won't rebuild our own country. we're for taxes except when the president proposes tax cuts in social security. so i just say, you know, there's only one job that the republicans are worried about, and that's getting the presidency, and they will do
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everything in their power to look like they really care as long as the one honest man in town, mitch mcconnell's, dream comes true. >> i don't know if anyone watched the republican debate last night. what i've noticed -- >> everyone watched it, come on. [laughter] >> certainly. >> and chris' tweets. >> that's how i followed it. [laughter] >> bless you. [laughter] >> it seemed to me that the average voter probably maybe other than jobs and one economic issue that's affected all their lives is what to do about housing. it's an issue that has not come up, i think, hardly at all in any of the republican debates. what can be done to do something about housing both economically, and what could actually pass? andy? doug? >> can i be brief? i have a very strong view on this from my experience in the mccain campaign. there is no economically
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rational large-scale housing policy that would make a difference and is politically feasible. and that's it. and so we're going to get policies that don't do anything because they're good political cover, but the only thing we're going to do in housing is muddle through, and that means that we ought to put a premium on actually growing faster so that we can help the people most lickly to end up in -- likely to end up in foreclosure. it's not the people underwater, if they lose a second job and get a reset on their mortgage, that's who's walking away from their mortgage. >> mortgage right down, principal right down. >> there's $750 billion of equity, that means the government would have to give it to somebody else. americans will not -- >> i do think this refinancing idea that is a republican be idea or at least glenn hubbard -- >> no, i understand that. >> a thing to do because it's allegedly rewarding the people who did the right thing, kept
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paying. taking advantage of cheap money. i think that's good. once we mark down which one of these days we're going to have to mark down the value of this real estate for banks, we are going to have a huge, huge fiscal problem in this country because we all thought if we closed our eyes, it would go away. and now the market's still falling. >> i would say i do think it's, um, just this is briefly and what off point, but i do think it's interesting that mitt romney gave his jobs speech in north las vegas, las vegas and nevada in general hit as badly if not worse than anywhere in the country by the housing crisis and foreclosure crisis. and mitt romney literally never stops talking about the economy, jobs. you know, last night in the debate i found it amazing, i thought, golly, this couldn't have worked out better if mitt romney had scripted it. you have rick perry being attacked on hpv, mitt romney is
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standing next to rick perry. i mean, he was quiet externally, but he must have been just been slapping himself five internally because he could talk about the economy, jobs, housing, all of these proposals where, you know, you're fighting in a republican primary over an issue that matters to some republican voters and, clearly, hurt rick perry but is not of broad concern to the general electorate, particularly at a time where we are with the economy and jobs. so, i mean, it's a fascinating thing, and i think validates in a lot of ways the strategy mitt romney has employed thus far which is just to talk about the economy and president obama relentlessly, do not get off topic under any circumstances. >> all right. we're out of time here. thanks to the panelists. majority leader eric cantor is next. [applause] >> today both the house and senate will be gaffing in. the house will be in for a brief pro forma session that east underway right now with no legislative business scheduled. later this week members will work on federal spending for
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fiscal year 201 which begins in october, and you can watch the house live on our companion network, c-span. the senate gavels in at 2 eastern for general speeches, and senators will turn to legislative work at 4:30 when law lawmakers will consider extending trade practices. it's the first step congress needs to eventually consider trade agreements for three countries. and as always, you can watch the senate live right here on c-span2. and on c-span we'll be live online today with ellen schultz, the author of "retirement heist," looking at how employers have used employee pension plans over the past several decades. and the discussion will be hosted by the national retiree legislative network. you can watch that live online at and join us for "the communicators," our weekly look at telecommunications issues. tonight our focus is the proposed at&t/t-mobile merger
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starting at 8 p.m. eastern, and again, that's here on c-span2. >> which part of the u.s. constitution is important to you? the that's our question in this year's student cam competition, open to middle and high school students. make video documentary, 5 of-8 minutes long, and tell us the part of the constitution that's important to you and why. be sure to include more than one point of view and video of c-span programming. entries are due by january 20,2012. there's $50,000 in total prizes and a grand prize of $5,000. for all the details, go to student >> next, a look at congressional republicans' proposals for improving the economy and creating jobs from this morning's "washington journal." >> host: well, this morning it't more about jobs, specifically what the congressional republicans have put forth. and, again, this is a follow up to our chat about the president's job plan that we recently had.
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this is a follow-up to our chat on the president's jobs plan we recently had dean baker is co- director of the center for economic and policy research. we are also joined by james sherk of the heritage foundation, a senior policy analyst in the area of labor economics. first broad question for each of you. dean baker, how would you describe what republicans are trying to put forth on jobs? guest: essentially a do-nothing position. we have been hit with this calamity. the housing bubble collapse, we lost an annual demand due to losses in construction -- lost $1.20 trillion in an old man due to losses in construction. republicans say do nothing, don't have regulation our taxes, and i hope that somehow, out of whatever, we will see businesses create jobs. herbert hoover tried this. it is not really work. you have to create demand, and it does not really happened.
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host: james sherk? guest: what you have to be doing is reducing barriers to business. you have to remove them so that you have a better business climate. guest: we had them in place in the 1990's when we are creating 3 million jobs a year. obviously, those areas don't prevent the economy from growing and creating jobs. in terms of the stimulus, it is a matter of proportion. we are trying to counter $1.20 trillion in lost demand, and some professors at dartmouth did a good analysis of the stimulus and in their analysis shows there was more effective than the obama administration projected. guest: that is not what the administration projected at the time but they said if we passed it would be around 7% unemployment right now and obviously it is not the case. japan tried this for decades.
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stimulus package after stimulus package that make our packages look like to change. they are still stuck in this slump. obviously, if you have something like the tech bubble going on, it is not an issue for the economy, but when the economy is taking a body blow, you want to make sure you are not doing anything to slow down growth. that is what the proposals coming out of the house are aimed at. host: let me get the numbers on the screen for our viewers. james sherk, senior policy analyst with the heritage foundation, and also joining us is dean baker, center for economic policy and research.
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let's get a take of what john boehner is saying about jobs. >> the president's proposals are a poor substitute for the pro- growth policies that are needed for job creation in america, the policies needed to put people back to work. host: any defense of the president's approach to jobs? guest: the problem is that it was not big enough to james referred to the prediction that unemployment would be at 7% and of course it is not. the problem is projection. they thought if we did nothing, the unemployment rate would not get above 9%. to 10% and it went o it would have gone to 11% absent this to be listed the problem you can blame on that
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projection, but that was not the fault of the stimulus. guest: look, deficit spending just has not worked. is the slowest recovery since the great depression. not that we have history on the great depression, hoover was activist on boosting government spending and intervention. roosevelt was building a lot of hoover's policies. it at length in an extended the great depression. we would have recovered sooner had not been for these interventionist policies. why are we having the slowest recovery we have had in basically living memory? the recession we have had with the most government intervention since the downturn. guest: the slowing recovery is due to the fact we have a different sort of recession. postwar recessions were from raising interest rates.
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we have a collapsed a bubble. it is a qualitatively different type of recession. it is much, much harder to get out of it. i take issue with your reading of the great depression. if you look at what happened with the new deal, the economy grew at 10% a year until 1937, when roosevelt got the fear of god and said that we have to balance the budget. we had a very rapid economic growth, and the unemployment rate fell from 25% to 10%. nobody will be happy with 10% unemployment, but that is a very sharp fall. guest: the civilian conservation corps, the works progress and an assertion -- the works progress administration -- the unemployment rate was never below 18%. the supreme court upheld the national labor relations act, which, whatever you want to argue for the merits, is very
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well established that unions are essentially chopped cartels, whose purpose is to restrict the supply of labor in the industry. it has a negative affect on the companies they organized t. you could argue that there are benefits, but this from professors and researchers at the minneapolis fed, this was harmful to the recovery. host: let's hear from the house speaker as he talks about the recent nlrb action on boeing. >> the boeing co. recently completed a plant that will create thousands of new full- time jobs for american workers, only to be sued by a federal agency that wants to shut it down. let me make sure i've got this right. american companies are free to create jobs in china up but are not free to create jobs in south carolina. host: dean baker, your response. guest: we have to understand
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what is at issue. the question is whether boeing deliberately used the threat of moving to north carolina as an anti-union tactic that is what nlrb is saying, we should investigate that and look into whether this was an anti-union threat. it is inappropriate, it is illegal, to say that if you x, y and z, we will move it elsewhere. companies do that all the time. whether or not the facts support that are not, that is what nlrb is trying to determine but let me get back to the issue of unions and the unemployment rate. you have countries with high unionization rates, much higher than the united states, countries like sweden, germany, denmark, norway, that have a very low unemployment rates, much lower than ours. there is a lot of research on this, and most of it shows that there is no correlation at all between unionization rates and unemployment. host: i have got to get some calls in. brookfield, massachusetts, you
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are up first. what, you are on the independent line. caller: thanks for taking my call. i have a question for the fellow from the heritage foundation. we keep hearing that we need to remove impediments for investment. it seems that there is a lot of cash around waiting to be invested in corporations right now. i know you are going to tell me they are not investing because there is an environment of uncertainty, but there is always uncertainty in business. that is not an excuse to sit on your hands and not make investments. you have assets to invest. maybe the problem is they don't see any productive use for the assets in this country, and that is a scary thought, too. guest: i would largely agree with that. the problem is that the businesses don't see investment opportunities, and that is why they are not investing. if they thought that they could profit from these investments, it would of course do that. that is what businesses do, they
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try to make profits. you cannot centrally plan the recovery, citing we will invest in this company or that company. we don't have -- the government does not have the information. we saw this with solyndra. what we should be doing is removing the barriers that raise the risks to businesses, raise the cost to businesses, thereby encouraging that companies take the risk themselves. we should not be raising a needless barriers to business success. host: steven, welcome to the program. caller: i would like people to keep in mind that everything comes from the earth, and scholars can shuffle money around here and there and do all these things and talk about -- everything comes from the earth, and you have got -- we have got to create wealth and jobs -- everything has got to come from a mining, from farming, from drilling, it has got to come
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from the earth. you cannot just robbed peter to pay paul. you have got to take the wall from the earth and bring it up, and that is the only way we are going to do it. you cannot keep shuffling money around. host: thanks for calling. dean baker, let's go to you for this. i wanted to dig into some of the details of what the republicans are putting forth. this is from the house republican conference, the ideas that they suggest will create jobs. a 25% top tax rate for people and businesses. they want a congressional review of regulations, something house has started doing and will continue to do this fall. they would like to see the columbia, panama and south. trade deals enacted. and also, expand domestic oil drilling and a reaction to what
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the caller was saying. guest: there are few jobs at stake with this idea of domestic drilling. we're not going to have energy independence. if you drill the oil out of the ground today, it is not there tomorrow. if we are concerned that at some point the bad guys are going to cut us off, the most foolish thing we can do is to drill in out today. why on earth would you rush to drill out? i cannot understand that. of course, there are great environmentalists. those of us who remember the bp spill, we know what those are. second, the top tax rate -- we have done this before. how many times, do the same thing? president bush awarded the tax rates and we had a horrible -- lord the tax rates and we had a horrible job growth. you go back to the 1950's, 1960's, 1970's, we have the top
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tax rate to 70%, very good job growth. at the idea that is the key to job growth does not make any sense. host: let me discuss what "national journal" says about this. they would like to see at delay in epa standard for cement farm does, from bes -- greenhouse gases. guest: the problem is that what these regulations are going to do is massively raise costs in industries. we have had three decades of improving quality. there is cleaner air today than in decades. at a time when we have already made great progress but the economy is weak, you do not want to raise additional areas to businesses and sink money into investments that don't help them expand and grow the economy. in texas, just a few weeks ago,
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and energy company announced they would have to shutter two power plants to comply with these regulations. company was planning and investing millions of dollars and creating construction jobs at a new plant in alabama. they announced they had to shut that down because of the regulations. when the economy is this week, we don't want to put barriers up into businesses that want to expand. another problem with these regulations is that because they are going to raise energy prices, that affects everyone. consumers hahave less money in their pockets. it is not a sensible strategy. host: david, independent, you are on the air. caller: i am a high-tech robotics and information executive engineer. the conversation left and right does not seem to deal with the causes. everything is focused on the
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symptoms. we have put together a different paradigm shift the week of the redistribution of work. -- that we call the redistribution of work. if you look at things in america today, what we do for a living forces acting in our economy -- there are not as many jobs for an educated people any more. to read this edition of work -- the redistribution of --work -- which put out of it that describes the paradox, what we can do in the short-term and long-term to deal with this factor. i encourage these gentlemen and viewers to go to, watched a short video, and see if it changes their perspective. host: redistribution of work -- what does that mean to you? guest: it is an interesting
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question, because one of the things that is striking about this downturn is the difference with other countries. germany has an unemployment rate today that is half a percentage point below what it was at the start of the downturn. it is that because germany has at better growth than the and -- and it states. it is not because germany is that -- it is not because germany has had better growth than the united states. it is because they have a better work-sharing policy. they reduce work hours. that would make a lot of sense here. we have unemployment assistance in 20 states for the take-, rate is low, but if we could promote the jobsd adopt proposal includes work-sharing -- a government in germany that is a big promoter in this is a conservative government. there is no obvious public interest encouraging people to
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be unemployed rather than having them work short hours. guest: the problem is, most of the studies published in peer review literature on his work share programs showed that they are relatively ineffective in reducing unemployment. i do think the caller has a good point in terms of what is happening to manufacturing. in 2007, up with a downturn, we were producing more manufactured goods in nine the u.s. than ever before. the move from the firms into the factories was good for the economy. the question is, what do these workers do? one of the problems we have in the economy is occupational licensing, where 1/3 of the economy is off limits. you need a license and is several years of education to apply for these jobs.
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studies even by liberal economist say that this is bad for job growth. we need to focus on workers displaced by new technology rather than shuffling jobs around. host: james sherk joined the heritage foundation in 2006. educated at lulzsec college and the university of rochester. we also a -- joined by dean hillsdaleducated ant college and university of rochester. we are also drawn by dean baker, who was a professor at bucknell university, worked at the world bank, educated at the university of michigan. has written several books, a long list of books. .uest: keeps me busy host: democrat, good morning. caller: i have one question that i keep hearing over and over
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again from republicans, the tax as corporations pay, if we could just get it down. i would like to know from the man from heritage, the name of a company, just one, that actually pays 35% in taxes after deductions in loop holes. i want an aim of one company. if you cannot give me the name of one company, everything you say is disingenuous. host: put you on the spot here. guest: i think she actually has a good point. if you are -- there are different carve-outs and deductions that get stuck in it the tax code. the actual effective rate is closer to 18%. you are paying the full rate, more or less. it acts as a disincentive to job growth.
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speaker boehner and president obama said that one of the things they would like to do is motivate the tax rate, the highest in the industrialized world, but eliminate these deductions and credits so that there are fewer barriers for companies. host: we will put up more details regarding healthcare on the screen. the republican health care proposal, this from "the hill," wants to exempt health plans in 2010tence before the 20 health-care law from the law's requirements. any reaction? guest: this is kind of making a joke of the plan there was ample opportunity to change the plan. 50, 60, 70 republican amendments were accepted. you want the insured to spend more than 20% of what you are paying them on administrative the fees on the process.
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it hardly seems like a very harsh conditions to say that they have to spend at least >> host: anything on health care you want to add? >> guest: obamacare has been a disaster. a poll done recently and what are greatest obstacles to hiring? more than a third. health care law first greatest or second greatest obstacle. it makes sense. what is the health care market going to look like in the next five years? you don't know. how do you plan for the future when you have this enormous risk hanging over your head? >> host: we go to new york. chris, republican. thank you for waiting. >> caller: thank you for taking my call and thank you for c-span. i first like to start off by saying, mr. baker, can you please explain why it is that the government government must be a business partner with everybody that goes into business? and how is it that the government is so smart, that they can pick, wonderful, fantastic winners and losers in the marketplace all the time? just remember, ronald reagan
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said, scariest words someone can say is, i'm from the government, and i'm here to help. and i'll get off by i just want to ask both guests one thing. when did millionaires and billionaires start at $200,000? from my math, that is very, very far below $200,000 and, you know. i'm from new york, so i'm very, very used to a lot of people talking about redistribution of wealth and fairness and all that other stuff but my main point is, the government is not a business partner with us. should not be and can not be if we're going to be successful. thank you. >> host: dean baker. >> i'm not sure what chris means, government is everyone's business partner. i don't know anyone that really holds that position. president obama and others said they want to create the supportive business environment. you have things like the small business administration that has been around. i have to go back and look how long that has been around and that enjoyed bipartisan support. i have mixed feelings about that.
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in any case out there ostensibly to support business. i'm not sure if that is what the caller is attacking. the government in general i don't think is great picking winners and losers. it sometimes can have a useful role. we have some good technologies like the internet which came from the government. the government can play a useful role promoting technology. the government spend $30 million a year on biomedical research from the national institutes of health. republicans conservatives, far. suit call industry all think it is money very well-spent. the government can do lots of good things creating a good environment for business a good economic groundwork. i don't know anyone suggesting that the government is picking winners and losers. >> guest: you might want to talk to the president about his green jobs proposals. we spent 10 of billions of taxpayers dollars on these companies if they were viable companies the private sector would invest in expectation of earning a profit. the reason they don't want to attract private sector
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investment investors are looking at this and says no way these companies can succeed. so the administration comes in gave billions of dollars of in loans. evergreen solar and this past week with solyndra. these companies have gone belly-up t was not a good use of taxpayer dollars. the caller is right. government shouldn't pick which get investment because politically popular technology. step back to allow investors have their own money, not our money on the line to make the risk. >> you're opposed to small business administration. >> i think the small business administration does a lot more than it should? >> host: back to health care. question via twitter this morning. ask james sherk if you thinks foreign corporations have advantage because many of their governments handle health care. >> guest: not necessarily. i'm actually from canada. canada you have nationalized health care. the argument if you look at business in canada got lower costs. actuality canada has much higher taxes than the u.s. so that, you're paying for one way or another.
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it is not free. somebody pays for it. as milton friedman once said there is no such thing as a free lunch. >> host: dean baker you seen all the headlines the president coming out the 10:30 to talk about the debt reduction plan. "wall street journal" says make nearly half the point of this proposal will come from taxes. i wanted to show you a piece from john boehner last, just under a minute. he clearly says that tax increases are off the table while, if you look at the headlines, tax increases from the president's standpoint are very much on the table. let's take a look and get reaction. >> tax increases i think are off the table and i don't think they're a viable option for the joint committee. it's a very simple equation. tax increases destroy jobs. and the joint committee is a jobs committee. its mission is to reduce the deficit that is threatening job creation in our country. we should not make its task harder by asking it to do things that will make the environment for job creation in america even worse.
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i hope the president will meet this standard when he puts forth his recommendations for the joint committee next week. when it comes to producing savings to reach the $1.5 trillion target, the joint select committee has really only one option. spending cuts and entitlement reform. the joint committee can achieve real deficit reduction by reforming entitlements and taking real action to preserve and strengthen social security and medicare and medicaid. >> host: dean baker, connect all this if you can back to job creation in this country. >> guest: again the idea that any sort of tax increase is just going to kill jobs just defies volumes and volumes of economic evidence. we've had much higher tax rates in the united states, in the '90s, in the '50s, '60s, '70s. we've had strong growth. we point to countries all around the world have much higher tax rates and tax share of gdp with good economies, strong growth and lower unemployment rates.
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this idea you can never raise taxes is kind of silly. >> guest: even keynesian economic theory says if you raise taxes you have effect reducing demand. classical theories say it will be harmful. america has had the strongest economy in the world for a very long time and part of that has been because of our lower taxes and more attractive climate for investment and risk-making. america historically has far higher rates of entrepreneural business start-ups than certainly the european nations or france or germany or these other country is. what research shows you raise the taxes paid by entrepreneurs you actually get fewer business start-ups and those startups that do occur hire fewer workers. if the government is going to be taking more and more of the wealth you create there is less of an incentive to take the risk and take the leap which can be in many cases quite costly if the company goes under. >> host: maria is on the line from new jersey, independent, good morning. >> caller: yes. good morning. >> host: morning. >> caller: just wanted to
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say that i wanted these gentlemen to tell me when we're going to have honesty about the dragon in the room. the dragon in the room is globalism. what we're getting is window-dressing. president obama said he had no silver bullet. he has at least three i can think of. i'm a layperson. he can state with six months notice he will abrogate all the trade agreements unfavorable to our country. and, get consent of the senate and he would have immediate he results. second thing he could agree that the federal reserve which has been gambling with our money and paying off foreign banks should be investigated and if necessary abolished. and the third thing is, he could call back all our troops from these wars of adventure and put them on our borders. actually, it's a big, just, common sense. we have to be self-sufficient. globalism and, the idea of international gangsters and
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fascists is ruining our country and i think buddy roemer, some other people, even ron paul have had pieces of this that address it. but until everybody agrees that this is madness, we're not going to get anywhere. i would appreciate your comments. >> host: let's hear from our guests beginning with mr. baker. >> guest: i want to jump back quickly point james made before tax rates. the united states ranges last of employment in small businesses. tax rates don't seem to have helped that much. in terms of the caller's comment, i think globalism of course is a mixed story. we have gains and we also have big losses. my biggest concern is the trade deficit because that creates a fundamental imbalance in the economy. that is accounting identity. that is no way around it. if which have large trade deficit we do, 600 billion a year, 4% gdp you have to have negative public savings. means budget deficits or negative private savings.
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zero savings rate we had at the peak of the housing bubble. there is no alternative. that is logically true. so i'm very concerned to get the trade deficit down, the way to do that in my book, lower the value of dollar. make u.s. exports more competitive. u.s. domestically-produced goods will be purchased instead of imports. if we got the trade deficit close to balance that would create over 4 million manufacturing jobs. i think that would be a really good policy i'd love to see president obama embrace it again. first and foremost, want balanced trade, get the dollar down. make u.s. foods goods more competitive in the u.s. economy. >> host: james sherk. >> guest: her bert hoover tried this. passed smoot-hawley tariffs. shut down trade with the world. destructive of the economy. economists say we shouldn't have done that. smoot-hawley tariffs and shutting international trade were terrible for our economy. free trade is one of those areas where economists agree of all stripes. paul krugman got his nobel prize in? his work demonstrating the
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benefit of trade. comparative advantage gains of trade both nations are better off. i think shutting down trade or trying to severely restrict trade wouldn't work any better now than it did in the 30s. >> host: we have a call from chicago this morning. doris on the line from democrats. welcome to the program. >> caller: thank you. for "washington journal" i have just one, i mean i have a comment but first i want to say every week you have the heritage foundation on. some weeks you have the heritage foundation and the cato institute. so are these your new best friends going here? and heritage, guys, that one-third of businesses said it was health care? i read that same thing. two third said lack of demand. now, the rich do not invest in america. they invest in, quote, emerging markets, unquote. those are in china, and india. and then, they want to say
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they're not committing class warfare. they refuse to take away those subsidies for corporate jets that would bring in $3 billion but they cut the nutrition program for infants and children by 830 million. so who is committing the class warfare? >> host: thanks for calling, doris. james sherk, you want to response? >> guest: i think there is a lot of room in the tax code as i said before to improve it and lower the overall rate and eliminate some of these deductions less efficient. that is again something both the speaker and the president have said they're interested in doing and i think that could be quite helpful. but in terms of the broader point, look, who is invests? who is it creates jobs? entrepreneurs and investors taking risks in america. there is awful lot of investment that takes place here in this country. we want to encourage more of that. you can have a policy all right, the goal of government reduce wealth and
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take money away from successful entrepreneurs and investors. you can can do that and have economic effects. that will not encourage more people to invest and try to create wealth in this country. you can't do one or the other but doing both at once you're pushing and pulling at the same time. >> host: all our guests are friends, if you want to use the word. we try to get balanced opinion on the air as we're doing this morning. keep watching, watch over time you will find that out for yourself. want to dig in while we have the last couple minutes. a little bit more on regulations. dean baker we'll get your response to what "the washington post" is reporting. something called the reins act, r, e, i, n, s. regulations from the he can tiff in need of scrutiny act. detail they require vote on major regulations with impact over $100 million. and the post-reports that, 50 to 100 quote, major
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regulations are enacted annually. let's hear more from speaker boehner as he outlines gop plans to reduce the regulation. >> we'll pass the reins act with, which would require congressional review for any regulation that has impact on the economy. we identified thousands of job crushing regulations that keep our economy from producing jobs. we'll repeal the 3% withholding rule which serves as effective tax increase on those that do business with our government. we'll stop excessive federal regulations that inhibit jobs in area as varied as cement, to farm dust. >> host: job-crushing regulations. dean baker. >> guest: well there's long history of blowing up the, sort of negative impact of various regulations. most of which actually serve very important health and safety purposes. my favorite hear is the clean air act which was passed back in the '80s and before that passed, all the people running around saying
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this would cost hundreds of thousands some said over a million jobs. someone recently did a study of that and looked at industries that were supposed to be worse effected. they had more job growth than the industries that weren't affected. the environmental agency said gains of bill were in trillions of dollars in better health. over a million people are alive because we had the onerous regulation, the job-killing clean air act, didn't kill a lot of jobs. kept a lot of people alive. >> host: james sherk, explain something that the speaker talked about this 3% withholding rule and why it's so important. let's get some detail on the screen about this. this is from "the hill." the 3% withholding rule requires federal, state and local governments to withold 3% of payments to contractors. the 3% returned at end of the year if all taxes were paid. this would be effective as of the start of 2013. as we read the president wants to delay this by a year. republicans want to eliminate it. why is this so important?
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>> the problem with this regulation it is essentially, toing small businesses to give a loan to the federal government. that, you perform services, obviously have to pay your workers. have to pay for the materials but the government only gives you 97% of what it would pay you at the end of the year, you get the final 3%. so in effect you have to borrow money in the interrim. you're giving a no-interest loan to the government. great deal for the government but, we shouldn't be turning to small businesses to give that sort of forced financing. >> guest: we have a real problem with noncompliance with taxes by small businesses. i really don't want to pay higher taxes because small businesses try to rip off the government. this is way of getting the foot in the door. we have a track record. most of us pay our taxes every two weeks, every month for taxes. we're not asking anything of small businesses that most workers are already doing. >> host: last couple calls. bradford, pa, frank, republican, good morning. >> caller: good morning, carl. we need an industrial policy,
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just ask yourself a couple questions. do you think if apple computer had to pay $10,000 a year health care, they would have 300,000 jobs in china? i can remember when ge employed 200,000 people in this country. i worked for them. we did fight health care. today if they brought 20,000 jobs back, health care would put them out of business. we do need an industrial policy. and on the deficit, i'm old enough to know you pay 70%. we did not have a $30 trillion deficit after world war ii. probably eisenhower and fdr would probably have warren buffett and dick cheney water board a couple guys like norbert. the country is too
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important. we should have national interests. this is not about me making money. i have made plenty of it and i pay taxes. and i just sent 15 grand in for my quarter. the. >> host: let's hear from our guests. dean baker. >> guest: first off on the deficit the reason we have large deficit people should be really clear because the economy collapsed. we didn't have large deficits in '07 and '08 when the economy collapsed deficit ran through the roof that is really clear. amazes how much distortion. both parties. president obama inherited a trillion dollar deficit. he inherited that because the economy was collapsing. we should be really clear on that. hilt care the caller is absolutely right. per person health care cost is more than twice the average of other wealthy countries. take average, germany, canada, whoever you want to throw into the mix we're paying twice as much per person. that is same thing as a tax. from the standpoint much business how is it any different if money goes out the door to pay health care or government taxes it? from businesses money out of their pocket. >> host: james sherk.
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>> there isn't anything can do the government can do to bring back the manufacturing jobs. it is automation and technology. we have new robotics and computers we can produce same number of things more with fewer workers. if you're high-skilled worker that operates the machine that is great for you. if you're one of the guys on assembly line not so much. there isn't much government can to interfere with that. look at china. china clearly has industrial policies. they have fewer manufacturing workers today than mid-'90s. they had same process of whiching in productivity improvements. goal should be how do we open up additional jobs for workers being displaced by technology. i think one place to look at that would be on pagesal licensing and removing some of the domestic behavior yes, sir to competition we erected here in the economy. there isn't much the government can do to roll back the process of automation. >> guest: well, again i think the main issue i mentioned before with the trade deficit we don't want
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to roll back automation. you about the fact of the matter we could create 4 million manufacturing jobs if we had something close to balanced trade. most of our deficit in manufactured goods. i will say, james and i were talking before we came in here, i am 100% agreement licensing occupations. we don't think bash members have to be licensed. >> host: kingston, georgia, we have time for several more calls, not just a few. johnny one of them on the independent line. hey, johnny. are you there, johnny? >> caller: good morning. >> host: good morning. >> caller: yes. my question is, to the guy, mr. james, i'm a veteran, 26 1/2 years in the military. i want to know how clinton created 22 million jobs during his time and he raised taxes. bush reduces taxes and he lost $8 million jobs. could you answer that question? you were talking about both sides of your mouth. >> host: james sherk of heritage. >> first of all i would like to thank you for your service to our country.
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whatever political disagreements, thank you for that. in terms of the president clinton, he took office basically as the economy was recovering from the 90-91 recession. this was a time when you had far faster growth in the population in the labor force. president bush takes office at the peak of the tech bubble just as it is collapsing obviously you have all the job losses occurring start of his watch. at the same time you've got a slowing down of the labor force growth. you have not as much population growth. not as many people entering the workforce. unemployment rate in 2007 was around 4.85%, very low. but the issue was you simply hadn't had as many workers entering the workforce. and so that is why you didn't see the same number of jobs being created as you did under president clintoners a little more from speaker boehner now as we take a look at the republican proposals for job creation. the speaker talking here about tax credits. >> government job creation has two other components. one is the current tax code which discourages invests
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and rewards special interests. strikes me as odd at a time when it is clear that the tax code needs to be fundamentally reformed the first instinct to come out of washington is to come up with a new host of tax credits that make the tax code more complex. >> host: dean baker, let's hear from you first on the idea of tax credits. again connect this back to job creation. >> well, the tax code is a mess. there's a lot of things you could do there i think that would, you know, make it more efficient and fair. one of my favorites if you look at mortgage interest deduction. vast majority of the benefits of that go to higher-income individuals. seems to me what you want to do is cap it. currently capped at i think 950,000. cap it at a much lower amount. something, 40050 and make it a credit rather than a deduction -- 450. if you're in the 36% bracket, paying 20,000 in mortgage interest, 36% of that is picked up by the government. if you're in the 15% bracket
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you get 15%. make it a credit, 15, 20%, cap it at 400,000, fair b it would be much fairer and cheaper. >> host: james sherk. >> i agree the tax code is a mess. we should look at removing a lot of credits and deductions lowering the overall rates. marginal dollar small businessman he earns when he expands and invests gets to keep more of. in terms of the broader point of tax credits, europe tried all these things. europe had for the past generation 8 t0 10% unemployment. if you're in france, 9% unemployment is the sunrising every day and so i think we should learn from their experience. what we've seen that if you offer, say a tax credit for hiring long-term unemployed it affects who gets the job. doesn't affect the number of jobs that get created. businesses for short-term one year tax credit don't hire a new full-time worker otherwise. they will pick you over you because the one guy has a tax credit. >> guest: we have a interest in gain hiring long-term
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unemployed taking you over you. germany has 6, 6 1/2% unemployment. northern european countries, sweden, denmark, norway, had less than 5%. they have generally lower unemployment rates in the united states. it is a little quick to paint a single tar brush across europe. they have companies with high tax rates and still have had good productivity growth and unemployment rates the same or better than in the u.s.. >> host: james sherk, you mentioned you are from canada. one message via twitter, can't call it up but they do want you to explain something about canada. high taxes they say. national health care. how is it doing and the recession that we're having here? >> canada has the great fortune of resource-based economy at a time commodity prices are rising. >> guest: like texas. >> guest: exactly. alberta, most people don't know, number one nation america imports oil from is not saudi arabia but canada. you have mineral resources. rising commodities prices canadian economy is doing
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quite well. their were such they didn't have the same housing bubble we did. so they don't have to recover from that. i think some credit of that is due to the conservative government. steven harper. i think most of the good fortune canada has is where their economy is diversified into. >> host: madison, wisconsin, john, democrat. good morning. >> caller: hi, guys. i have a question for dean baker. i wonder if he feels part of what he is struggling against to explain some economic issues about stimulus and job creation you're fighting against the american public's lack of understanding about basic economic issues? one of, just an example, talking about the way our currency functions, i mad imagine a lot of people on the conservative side of the ledger still think we live on some kind of gold standard how our currency works. they don't understand how a fiat currency works. they have political discourse where they talk about, we're just printing more money. we're going to print more money like it is the end of the world. that is what the government always does when you have a fiat currency.
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it printses money. i wonder if you feel like you're struggling against the, you know, the lack of understanding of economic issues to try to explain these positions? >> host: thank you, john. mr. baker. >> guest: i think that is a very, very big issue and, you know, unfortunately i think president obama, because really his job first and foremost to explain what is going onto the american people. i think he has really fallen down on the job here. when he did his original stimulus package he did some effort to say, here's the issue. we have all the demand generated by the housing bubble. it disappeared. government has to step up and fill that hole. he sort of did that. started talking about the balance budget. government is like a family. government is not like a family. make the government like a corporation. general electric is borrowing money this year, next year, borrowing forever. maybe at some point they will go out of business. at some point the chairman will come to the board, oh, we paid down the debt, oh our profits are higher this year than last year. the idea that the government is like a family is nuts.
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and furthermore it has the responsibility for creating demand in the economy which certainly no family does thank any. that is a difficulties thing to explain. someone sent me a speech from president roosevelt where he is laying out exactly that argument back in 30 at this six. i wish -- 36. president obama take the lesson and pick up the ball. >> host: donna, asheville, north carolina, welcome to the program. >> caller: good morning, c-span. i just had a comment. last tuesday there was excellent testimony given before the house committee on job creation by a gentleman by the name of peter schiff. that is he actually had a book featured on c-span where he actually predicted, many years ago, much what is going on in our economy today. the man is actually brilliant. he started a radio show on the internet at anyone interested at all going on in the economy today, democrat, independent, republican whatever your
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party tune in into his show at airs at 10 eastern standard time. that is free. schiffraid richard on the line --. >> host: richard on the line for independents. >> caller: good morning. president obama's policies, excuse me have been poison for our economy. there is, tax policies and, they won't work. economy is taxed way too much. president obama last february presented a budget to congress, to the senate. it was voted down 97-0. every democrat and every republican voted against his budget. this health care bill, needs to be repealed. there is over 3,000
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companies right now that are on waivers because they can not do business with this health care bill. president obama said that his policies would necessarily make energy costs go through the ceiling and they have. go make it energy costs through the ceiling and they have. when he came into office, gasoline was a $80 cents a gallon. now it is $3.50 a gallon. -- when he came into office, gasoline was $1.80 a gallon. now is $3.50 a gallon. we are losing business is overseas every day. guest: gas was $4 a down one president bush was in office. you can -- gas was $4 a gallon when president bush was in office. you can play games with gas prices. i think it is silly. in terms of small businesses and
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health care, there is the survey of businesses for decades. they asked about the major obstacles. overwhelmingly they say is demand. one of the choices is regulation. roughly the same numbers save regulation under president bush. -- roughly the same numbers said regulation under president bush. maybe when it is time to vote for president obama, they will say that. that is for political purposes and not the way they conduct their businesses. guest: 25% say that is the greatest obstacle the next one is regulation. 25% of businesses are picking what the government is doing to them. they say that is the single greatest obstacle. 25% are picking poor sales.
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that tells you it is time to roll back some of the red tape. host: let me jump in and get one more piece of tape from speaker boehner. he talks about spending. >> i am not opposed to responsible spending to repair our infrastructure. if we want to do to support long-term economic growth and job creation, let's link the next highway bill to the expansion of american energy production. removing unnecessary government barriers that prevent our country from utilizing the vast energy resources we have and creating millions of american jobs along the way. host: let's hear from james sherk 1st. guest: want to be increasing domestic energy production.
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we have 800 billion barrels of oil we could be recovering but we are not because of bureaucratic obstacles on the gulf coast. i think it makes a lot of sense. we will repair bridges if they are falling apart. i do not think it should be viewed as stimulus. you are taking money from one part of the economy and moving it to another. you are not improving things. a lot of the infrastructure projects were hiring away from other companies and not hiring the unemployed. the skills needed for infrastructure are different from those needed in general construction with the unemployed. guest: the study found it did reduce unemployment substantially where the stimulus was spent. you have stories of people jumping around that would have been hired anyway. this is a very skilled
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occupation. there is a limited number of people with those skills. it poses enormous and our mental harm and does not create a lot of jobs. think of the bp spill. it will take thousands of years to repair the damage in the arctic zone. i would like to leave something for our kids. it does not do a lot for the economy and does a lot of potential harm to the environment. back let's look philosophically. let's get in response to this question. what is the job of the corporation? to create jobs or grow? guest: they are there to make money. it is our responsibility as policy people to insure the ways they make money are going to be good for the country as a whole. guest: more or less, i would agree. corporations produce goods and services. they do it because of the competitive marketplace with the
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fewest resources used. there is more to produce other things. we want to reduce unnecessary barriers to creating the wealth. we do not want to be putting up roadblocks for businesses that can create wealth. host: the next call is from florida, michael, a democrat. caller: mr. boehner said something about a cement plants -- va cement plants shutting down because of regulation. i am a retired truck driver. they are having so much trouble because the chemicals in cement never die matter how long a building has been up. the dust and chemicals from the planes for what they are suffering from. the bush tax cuts are still in. bush said the war would be paid
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for by the oil that we went into iraq for. small businesses will not give health care. thank god for the health care plan. you can work in a small business. it will ensure some people and not others. host: we have time for one final comment on the path for job growth. guest: you want to give the government out of the way. the definition of insanity is trying the same thing over and over again expecting different results. we tried the stimulus. it did not work. i think we should be trying a new path of reducing the barriers to business success and reducing the risks job creator space. guest: i was going to say the same thing. my reading of the evidence on stimulus is that it worked. you cannot contract loss of
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demand with the stimulus. it is not the right size. host: thank you to dean we will have more on "washington journal" tomorrow morning when our guests will be the chairman of the house oversight and government reform committee, california republican darrell isa answering your calls, e-mails and tweets at 8:30 a.m. eastern time. and on wednesday we continue our series on magazines with articles that focus on the federal government's use of energy in "the weekly standard"'s report go green by cutting government. that segment gets underway wednesday morning at 9:15 a.m. eastern time. live on c-span. which is currently,
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>> both the house and senate are in today. the house has gaveled in and back and back out for a brief pro forma session. the senate gavels in at 2:00 eastern time for general speeches with a legislative work scheduled at 4:30 p.m. they will be extending trade preferences for developing countries.
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you can watch the senate live right here on c-span2. >> next a look at the cost of military retirement programs according to the defense business board, military retirement costs $1.3 trillion, of which only about $385 billion is funded. this is about 40 minutes. >> every monday at this time on "washington journal" we have a special feature called your money. it's a chance for you to find out not only about select federal programs but what they do, how much they cost. today segment we will learn about military retirement pay, the programs come how they are structured and andrew tilghman, thank you for joining us this morning. >> guest: thank you. >> host: a lot lately on military retirement pay and programs in light of these debt and deficit hawks at first explain the structure. how does it work for retirees in
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the military? >> guest: current structure has not changed much at all. and what it involves basically is people who reached the 20 year mark who commit 20 years of service end up getting, half their paycheck for the rest of their life. that's a real generous benefit when you think it's very possible you can retire at the age of 38. you enlist at 18, 20 years and then have half a paycheck with which to go and live the rest of your life as well as lifetime health care for very little fee. >> host: and half of your pay? >> guest: half of your paycheck yet in the three years of your service. >> host: and they can go on and do whatever they want? >> guest: they can retire if they can afford it. they can go and get a job somewhere else and the private sector. it gives them a lot of freedom. >> host: >> guest: that's when the current criticism.
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if you do not make it 20 years basically you get in the retirement benefit. and i think the figure these days is about 17% of the force reaches the 20 retirement and the vast majority, 83% serves six, eight, 10 years or so and then moves on and goes on to do something else and leaves the service with no health care, no retirement benefit at all transit what has been the effect of this particular structure over these many years to the stability? >> guest: first of all it serves as an extranet retention tool. basically service members when they hit about the ten-year mark they make a very big personal decision as to whether they want to round the corner and commit themselves to 20 years. very few people leave the military between the years of 12, 15, 18 years. pretty much once you get half, three course of the way through you will stay. that gives the military a real stability in terms of its personnel that they can plan on. they know that they have a
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certain amount of explosive technicians or nuclear technicians or whatever they need, they can plan on having. >> host: to the subject of cost, we're here to talk about the potential changes in light of the deficit situation in this country. the military retirement pay, how much does it cost the country? >> guest: the military retirement pay is estimated to cost about 2.7 trillion over the next 10 years. and just a couple of years ago the amount that the government pays in retirement now exceeds the amount it pays for active duty personnel. that's very unusual. even the most troubled companies and cities and states can keep their retirement cost below their payroll costs. and the military is not able to do that. the trendline is troubling for a lot of people because the cost is going up in the. life expectancy increasing and the way the wars have brought
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people and an increase the size of the force. >> host: let's talk about the changes but limited the numbers up on the line for andrew tilghman. military is the website if you want to read more about what they're putting out. we have three separate lines, one for retired military, share your situation with us, please do. (202) 737-0001. for retired military, for active duty military, (202) 737-0002, and for everyone else you can call (202) 628-0205. hopefully will hear about personal situations and decisions to try to make, what they think all of this means. but changes. what is out there? >> guest: has been changes discussed over the past couple decades. they haven't got much traction. the debt discussion in washington these days have really changed a lot of things. and advisory group a couple months ago put out a very
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detailed proposal that would basically transform this 20 year pension system that's been around for about a hundred years into a very traditional corporate style 401(k) which the government would deposit some money into an individual service members account and the service members would have that could do whatever he chose with. >> host: let's get the phone numbers on the screen again. i will repeat the phones for people who want to call and. retired military, (202) 737-0001. active duty, (202) 737-0002. and all others, (202) 628-0205. columbus, georgia first. preston on the line. good morning. go ahead, sir. >> caller: yes. on the retirement, it changes everything. i've been retired now for 10 years. yes, have to pay an 2.5 past 20
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added on. but that's your base pay. that's not all the benefits that you would have gotten if you were to in the military. so really it comes out to maybe, and that's just as, an estimate, maybe a third when you're in the military. now, health care, yes, we do pay for health care. a lot of things that are coming out, people are saying this is what's happening but they're not telling the whole truth. the war that we have had, even when the war started, i feel for the young veterans who are coming back because i hate to put it this way, but earlier they may have passed away but now they are living. they have prosthesis and so forth. they are very young. i don't know how da is going to handle the load of the people coming back with their injuries.
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and it's sad but i knew just prior to going into the war. a lot of things we did not plan for, but now all of a sudden we want to cut the veterans benefit, the ones to put their lives on the line. >> host: thank you. andrew tilghman. >> guest: the caller mixed good point. first off, the base pay issue. he points out that military pay is very complex. it's not most like people in the private sector to get a paycheck. the military provides housing allowance, it provides living stipends if you're a pilot it provides aviation set pay. so it is a very complicated equation which is why there's a lot of, you can be confusion around these kinds of proposals. and you know, i think that preston brings up the point of wounded warriors, certainly in these wars there have been a much higher survival rate but i
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think that's a slightly separate issue because we've got veterans affairs and a very extend health care benefits. the bulk of what we're talking about here is just the rank-and-file people that are retiring and receiving their pension checks. >> host: is this issue on the table for this deficit reduction committee? >> guest: that's a very good question. a lot of people are wondering that. it's unclear exactly what they're discussing behind closed doors. the secretary of defense has indicated that this is on the table. but he has kind of, you know, sanded down the edges of it by saying current active duty servicemembers today would not be affected by this. but there's a lot of people that certainly the military associations in washington here are very concerned that these retirement programs will get some traction and is going to be some big changes. >> host: secretary panetta responding only.
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>> i think we are doing with these kind of restrictions, i think it's important to look at all areas. every time i've done a budget summit might approach to it has been to say, let's look at every area to see whether or not we can make the important reforms, et cetera. there is something to be said obviously for young people that do come into the service, decide after four years to leave, that right now under the present system they get nothing. so that is some thought that maybe they are entitled to some retirement, to be able to move those funds to other systems. i mean, i think that's worth looking at. but to respond to the question i was asked, my view is we are not to break faith with those who serve, that serve now, and that if there were any changes that were to be made in the future it would not happen without grandfathering their benefits. >> host: mr. tilghman, he talked about moving money to
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other systems space to that possibly 401(k) style system that some of put out there. how might that work? is a possibility? >> guest: what it would do is basically the government or the military would deposit i think the number they talked about is 16% of your annual salary. which is relatively generous compared to the private sector come into a savings account that the service member would have that he or she left after five years or 10 years, that they would walk way with that savings account. it would really we shuffle the incentives of the entire military career path if you remove that 20 year incentive, you change the way everyone is going to do their careers and what all the personal officials will manage the various communities and would have an extra impact culturally across the board. >> host: what would be the impact? >> guest: to be concerned it will have a real devastating impact on retention. right now as i said that 20 year
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incentive really encourages people who may be feeling tired and a little bit burned out in the years 10 and 12, to really buckle down and follow through to reach 20. if you remove the incentive, you will have people who retired and feel like a good opportunity and the private sector to leave after 10 or 12 years and you will not have those highly educated senior leaders around in the future. >> host: virginia, jeremy, active duty military. good morning. >> caller: good morning. a nicely a navy veteran. my wife is active duty military. i just want to reiterate some of the comments that have been made. i believe that this would devastate more how for the currently serving, and, frankly, based on what has been stated, i'm not sure i believe secretary panetta that this isn't going to impact currently serving active duty military. we had about 16 years in, and i can play from talking to other
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family members this would have a pretty big impact on the currently serving. and the other idea that was just brought up, i think the institutions, you might look ahead and reinstitute the draft because people like us and our family just simply aren't going to serve 20 years. out of patriotism we might serve five years that we would go into another career after that. >> host: to the idea point i guess someone who serve five or 10 or 15 and his 401(k) style plan was out there, would you see that as a benefit? >> caller: you would see that as a benefit but at the same time i do think it's a benefit to our country. >> host: makes a specific point transfer i think he makes interesting points. certainly retention is the number one concern about critics of this plan. because retaining people for the senior leadership positions is a real top priority. but it's worth pointing out that jeremy is a navy veteran, and the services do not, retirement
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system does not benefit all services particularly. right now the air force and the navy basically produce a lot more retirees than the army and marine corps. the maureen core, the bulk of the marine corps is twentysomething riflemen who might serve six or eight years and then they leave. and very few of them will ever get a retirement. weller the navy and -- a lot more of them reach the 20 year mark. >> host: mark, thanks for calling. >> caller: i was wondering if the retirement benefits are paid to the dod budget for the va budget? >> guest: the retirement benefits mostly come from the dod budget. and there is a portion of that that comes out of an alternative treasury fund. it's a very complicated thing but it does not come out of the va.
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the va primary, health care and other benefits. this would basically be coming out of the pentagon's base budget. >> host: once again by the numbers here's what's happening currently with military retirement pay. final pay system. for those who became active duty before september 8, 1980 they get 50% base pay after 20 years. 75% base pay after 30 years. as far as the cost, according to the defense business board, current liability is $1.3 trillion, and we are reading 385 billion of that is funny. future liability, $2.7 trillion by 2034. big numbers. >> guest: obsolete. these are huge numbers and that's why this has been put on the table by some people. basically what you're looking at is a concern that some of these retirement personnel costs are going to begin to eat into the funds that they used to pay for
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active duty troops, that they pay for weapons programs and training programs. and under the most aggressive plans, the pentagon could almost meet a lot of its current budget cutting targets solely through major reform to the retirement program. >> host: jacksonville, north carolina. active duty, good morning. >> caller: good morning, sir. i'm going to retire from the navy on the 31st of october, and i've been listening to a tremendous amount of conversation to come out wanting to change all the benefits. >> host: how long have you been in? >> caller: i been in since october 1991. i've seen a tremendous number of changes in culture when different duties and everything. the one thing that cannot be changed is the retirement plan. there's a reason people stick it out. the duties they have are extremely different.
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they are very diverse. they're not going into an air-conditioned office. they are not enjoying normal regular office type routines. they're going anywhere in the world that they are asked to go. to compare the work that they are doing and put that into the same mindset wise as the traditional 401(k) isn't up to disservice to the members. the retention, that's going to be a big issue. the bigger impact though, and this is were i have to disagree with the secretary, absolute do not believe it will not have impact, even on getting people in. it reduced our medical benefits. they're looking to reduce the retirement. in significant ways. they're looking to turn over to a 401(k) s.t.o.m.p. program, and we know the issues. now we will trust retirements to that? >> host: do have a broader perspective on the financing of all this long-term and what might, what might need to happen?
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>> caller: what might need to happen, start trimming down some of that in the other areas. layover budget, all that money could be into retirement instead. >> host: erin talks but hardware. >> guest: that something that the senior bishop of the pentagon is very concerned about. but aaron brings up a point which i think really gets to the heart of this issue and i think military service members are really took offense to the idea of comparing their service to a regular corporate style of this job, and people suggest they should have a similar retirement system. this issue strikes a real emotional chord in the military because if it gets to the heart of their, the social contract they have with the rest of the country in terms of they commit themselves to the service, and
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they endure a lot of hardship, a lot of personal risk, they are away from their family for a great deal of time and they want some kind of incentive for doing that at the end of all this but i think the retirement benefit is symbolic of so much to them. it's not just dollars and cents calculation. it's really an extraordinary thing that underpins their entire motivation. >> host: do folks on the front lines get more when they retire? and what they get more under any plans that are being talked about? >> guest: right now they did not. right now pretty much every gets the exact same retirement benefit regards of whether you're a paper pusher or infantrymen in afghanistan. the proposal by the defense a couple months ago might change that took one of think it would offer that would offer the services and opportunity to create certain incentives for people to take hardship assignments or for people who
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were deployed. increase the amount of money that was put into the retirement account. the defense business board is a pentagon advisory group, and it's been a up of corporate executives, retired corporate executive very few of them have military experience. it's been provided over the past two years a lot of advice to secretary of defense of how to cut costs and basically make the pentagon operate more like a private business. i think again that sort of the source of the controversy. people think these guys are not military service numbers themselves. they don't understand some of the underlying issues. >> host: airsick question. with the benefit cut affect breast as well as? would they be progressive? how about the leadership? >> guest: it would absolutely. the senior officers would all be
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facing this new equation, this new 401(k) style system which would dramatically reduce their benefits. one thing i think worth noticing, the% of officers reaching that is far higher. about half of officers who began at the age of 22 will ultimately serve 20 years and end up retiring rest the number of enlisted personnel that reached a 20 year mark is closer to 10%. it would affect them, but they've always done a little bit better. >> host: if you want to read more, there's a front-page "new york times" piece on office. the headline says retiree plans. as washington looks just squeeze savings from once sacrosanct entitlement side.
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>> host: we're expecting them in the next many weeks, dod would be required under debt ceiling legislation to fight about $900 billion in savings over the coming decade. some big stakes. >> guest: absolutely. there's a lot of concern over there at the pentagon. >> host: let's hear from ohio. good morning. >> caller: yes. over the last five years or so, there's been, every veterans day when they passed the bill they have been taking stuff away over the last five years, every veterans day. but i mean, but the real problem is you've got people, okay, like the guys are building the
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bridges doing the plumbing, the electricians, the skilled trades, mechanics and things like that, all the skilled trades, these are the guys that are in the service there and then when they get out, they've got these paper pushers and people that's maybe never been away from home except to go to college, and you got people coming in from other countries. they don't even have to go in the service to get these scholarships and things. you have, for 70 years we have, we probably been at war for 30 of the 70. if you count two years for 10, two, we probably been at war 35 years. that's korea, vietnam, the nine we have going on right now.
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and the citizens of, better going into service, the patriots that go into service and are accused of being, being somebody that might be a terrorist by the homeland security, whoever she is, anyway, it's, it's sort of sickening that the people, the real heartbeat of america, and we do it because maybe we was drafted, or, and we didn't have no one to get us out. >> host: we get the points, jerry. and you for participating with the program.
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>> guest: jerry brings up a good point in terms of being at war for the past several years. and one of the things that's really affecting the current numbers these days is that for the past 10 years with the wars in iraq and afghanistan congress has been extremely generous with military pay raises and adding military benefits. and every time you raise military pay, that has a dramatic ripple effect on the way retirement will be calculated in the out years. so when congress raises military pay, say 3% instead of 2%, that has an impact on what the military retirement system is going to cost 20 years out. so that's a key factor here. and also just in terms of what he brings up the point of the draft. i think one of the big concerns that they have over of the pentagon, a real priority is the all volunteer force that the all volunteer force, people forget this, it's only about 40 years old. it's a real priority for the
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pentagon did not have anyone going anywhere near the discussion of the draft. that's why the potential retention concerns about this are such high. >> guest: good morning, tom. >> caller: good morning. thanks for taking my call. i want to point out to the guests he is not telling the whole truth. you started out by indicating that for 20 years after service military service, member would receive 80% of what they were paid on active duty. you did put a screen up a few minutes ago indicating that it is 50% of base pay. and i think it's important to explain that caveat. the bottom line is after 20 years of service, my monthly pay is less than one-third of what i was paid on active duty. i don't complain about that. i knew what i was going to get paid. what i'm complaining about is that you need to tell the people that this is about what the money is going to, and how the money is being spent.
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tell the whole truth. and if you think it's a sweetheart deal, then so be it. but if are going to have an honest conversation, it's important that you become be completely honest. >> guesthonest. >> host: good morning. >> caller: good morning. i'm retired air force, 28 years although i retired out of the reserves so i had about 19 and a half years, which means, and i didn't get my retirement pay until i was 60 although i retired eight years before that. but a couple points on this, as everybody knows, the retiree pay comes out of the dod budget. while the rest of the retiree pay of all of the federal employees, as i understand comes out of the general fund, and maybe a specific thing. so perhaps we need to get that out of that and get it where it is for all other federal
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employees. then when the current political winds are blowing, they can say well, why don't we just cut all federal retirees benefits, start at the top, the president of the united states all the way down to it ever still service may have retired. the other issue, again, it's a little bit disingenuous. we retirees get medical benefits, but not necessary from the military. for instance, i'm 65. when i'm 65, my military retired benefits in terms of medical become medicare. now, i could also tricare for life but that is not the bold. in fact, it only looks at the 20% that medicare does not pay. so i don't get military retiree benefits based on my military service. i get them right now based on the fact that i'm 65 years old
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and i'm eligible for medicare. so i which is kind of backed out of here and listen to your response on the bigger. thank you very much. >> guest: thanks, john. you bring up the good point in terms of the fact that the military's retirement costa, out of the pentagon budget. i think that sort of the source of the problem have is that we have this choice, it appears we have a choice between retirement benefits and current active duty payroll and current military capability. but i think it's a little bit difficult to move those over to the general fund partly, i mean, that would be an extra in a policy change but also different retirement systems. the retirement system the military has is a completely different program than what federal civilian employees would have. and as far as the health care benefit, you know, you point out the fact that you transferred to
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medicare, but there is a supplement for military retirees that goes throughout your life. and that was, actually that's not come it's only about 10 years old which is another factor of how these benefits, congress has piled on benefits to military service members, these costs in the out years have really expanded. that tricare for life is only about 10 or 12 years old. >> host: we have about 10 minutes left. just a reminder with proposals that are out there. the proposed contribution plan, what they're talking about would be similar to the military personnel thrift plan that is available to the government provides an annual contribution as our guests pointed out. the size we depend on circumstances, and the fully disabled would qualify for it immediately. is a statement from the military officers association of america. moaa believes the proposals are focused solely on
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>> host: the republican democrats have different viewpoints on retirement pay? >> guest: that's a really interesting question. first off, most people on health haven't touched this yet because it's so controversial. second of all, you have, this gets to the heart of some of the republican party right now which is very interesting in that the republicans have been very supportive of pentagon budgets for many, many years. but now with some of the inference to the tea party of some of these budget hawks beginning to square off with the defense hawks and some people and the republican party, prioritizing budget cuts over some of these defense concerns, defense capabilities. so i think that's one of things that will be interesting is to
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see really where the republican party comes down, i guess particularly in the house, on this particular topic. that's another reason why i think that people in the pentagon and services are so concerned because the plates are shifting politically. >> host: we move on to ohio. welcome to the program. neil is active military. >> caller: good morning. yes, i have two comments. one is i think all military people, no matter when you retire, should wait until they are 60 years old to start drawing their retirement. that's what i had to do. i'm a korean war veteran. four years regular navy and 16 years in the reserves. and if you really want to save some money you should look at the program that they have where there is a lot of fraud. there's a lot of people on military disability drawing
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tax-free money. and they are way better off than i am. thank you. >> host: any insight into the fraud comment? >> guest: well, certainly there's problems with the system. and i think that the va has a lot of problems and i think it's hard to quantify the way fraud and abuse other too. by and large people don't think that there's enough fraud and abuse out there to resolve this as a financial and policy question. he also brings up a good point. his personal situation had to wait until he is 60 to receive his retirement pension. the other proposals for military retirement several years ago which didn't get much traction at the time was to make retirees wait until they were at a more traditional retirement age, like 60. as opposed to help when you can start at age 38 or 40 or whenever you leave. that may be the ultimate result
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of this business for proposal which is far more radical than that is it makes some of those other proposals we've seen over the past few years look more modest and make it new consideration in light of some of the discussions. >> host: another active duty military call. thomaston colorado. welcome. >> caller: good morning. i was a vietnam vet. i was in the reserves your my trade, i was in keeping and air-conditioning and plumbing what to do today. but there's one thing. a military personal, you're talking on individual with a job but which were doing, getting with individuals who have families who also suffered. they are doing the time, the same time the gis. it affects the wife's job. it affects the kids school. the impact on the family. my family went everywhere i went. i was in italy. i will be honest with you. i have 10% disability.
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i quit giving it a year after they gave it to me. i didn't fight. but i go over there and i see young boys, guys from vietnam, guys from wars before, from world war ii and before. when you say 30 years, that's a disgrace. it's the people who go to the military, it's what you have america today. if we were that way, we would look like the middle east and we would look like what's happening in china and other places. we wouldn't have -- it's the g.i. who makes the sacrifice. and their families. so that you didn't have draft. that's why it's all voluntary. when you take that away there's the incentive for college. it's sad. do you know what? bring it back. take care of your gis. don't ruin what you really fought hard for. >> guest: time makes a good point in terms of the families.
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i think they're saying over at the pentagon that you recruit an individual that you retain the family. and he's right, the retention decision, the decision by service members who decides to stay is something he makes you do with his wife, with his kids. over the past few years i've talked with so many servicemembers who have talked about how the repeated deployment, it's been a strain on their marriage, there's been a lot of studies about how children can have increased likelihood of behavior problems if their parents are away a lot. so this is really, really hard on families certainly, and i think if you remove that 20 year, that security of the 20 year pension, you're going to have a lot of wives out there asking their husbands or vice versa, why are we doing this? >> host: leah, retired military, good morning. >> caller: high there. i wanted to say can you imagine
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a 65 year-old marine going to pick up osama bin laden? there's been a situation of when the soldiers are in the military and in combat they get heart damage in their late '20s. and we called it soldiers hard. so many of them don't survive the other people do. they don't go -- and then with a 45 year-old trying to stay in longer than 20 years, a lot of us have had heart attacks. and many of them pass away when they tried to meet the physical requirements. and then there's high rates of divorce it especially for female soldiers. there's high rates of suicide. so i think people aren't really looking at the correct issues. and we should be able to keep these old retirements. >> guest: well, i can't really speak to the hard problems she
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started but in particular but certainly military service and especially in the combat arms, in the army and the marines, is really hard physically. and you end up with come at the end of 20 years, all sorts of guys who leave with back problems and neck problems. so that's part of what the military retirement is offering is some security, despite those problems you might sustained a but also you have to consider this, this awfully large percentage of the force which is not engaged in that kind of ruling. >> host: here's a passage from today's "new york times" piece. critics argued 83% of former service members receive no pension benefit at all because only veterans with 20 years of service are eligible. those with five or even 15 years are not, even if they did multiple combat tours.
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such a structure would be illegal in the private sector and the company that tried it would be penalized, experts say. why should we have somebody to sustain a system that's unfair by any other measure in our society? but within military circles, they point out here and among many members of congress, the benefits are considered untouchable. where do you think this is going to be headed? >> guest: well, that's really and -- that's an interesting question. they have been touched untouchable for many, many years. there's been discussions over the past couple decades to making to notre dame and gone nowhere. back in the '80s there was a serious effort to change it. it actually passed until some years later when everyone realized it was about to take effect and basically congress holds a 180 on it. so it's just an incredibly political sensitive topic.
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but these are very unusual times in terms of what's going on in washington and you just never know where this could get swept up in these discussions. >> host: one last call. retired military, good morning. >> caller: good morning. i retired after 30 years of military service. the entire 30 years were in combat arms. marine corps special forces. that service as a combat arms i think is much more stressful on an individual than, say, 20 years or 30 years in the air force or the navy. i read the article online from "the new york times." and i've always concerned -- i'm always concerned when we start looking at changing the system we currently have. i think it's very important to keep in mind, if you look at the images of our soldiers coming out of afghanistan, iraq, and
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see the cost of being in the military. there is no way that you could compare a civilian job to what the combat arms military has to go through. >> guest: again, he's touching on that, the emotional side of this argument in that military service never feel like it is their job, comparing their job to a civilian corporate job, it's absurd to them and it really strikes an emotional chord. and i guess one less thing i would like to say on this is the times makes this point in the store today. you would think a service member who had five or 10 years expense would be supportive of this because they would potentially be getting a benefit, but that's not been the case. a lot of service mayors i talked to were young. those who don't intend to stay
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until 20, they have displayed the current system is fair and it should be change. the fact that this is such an integral part of military culture, to change this would just be a really profound change. >> host: told a couple interesting months of discussion. andrew tilghman is with the military times. pentagon military chief. >> the house is out for the day. members dabbled in earlier for a brief pro forma session. >> host: on all of thisit leading up to the event. up to 10:30 the lead star in the new york times. times."
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provided says president obama will until i deficit reduction today that uses entitlement cuts
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one more paragraph here -- " appreciated. one more passage from "the new york times" piece -- who said last week he would not support legislation that included revenue increases in the form of higher taxes.
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they talk about the potential for classic -- clashing. louisiana. ron, independent. good morning. what are you making about what you are hearing so far? caller: republicans got guts to call this class warfare. in 1982 ronald reagan and general motors started shipping union jobs to mexico. there has been class war presents the 1980's. bill clinton put the death blow -- deathblow -- nafta. the rich don't do nothing except sitting on their money. it is time they get off of their money or get out of the country. host: here is the piece from paul riot yesterday on fox news sunday. it -- here is a the piece from paul y n on it yesterday on fox news sunday. >> the cisco commission -- which
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a lower tax rates on investment and job creation by getting rid of a loophole so we can create economic growth. we think this is going in the wrong direction. do not forget under current law the president are ready past the top tax rate on individual and small businesses in 2013 goes to about 44.8%. we employees that pay the tax rate competing against countries that are taxing their businesses 16% in canada to almost 21% in england, 25% in china. and he is saying we are going to tax of these job creators at above 45 -- 44% but the new tax. it adds further instability, more uncertainty, and it punishes job creation and those people will create jobs. class warfare may make for really good politics but it makes for rotten economics. we don't need a system that seeks to divide people. we don't need a system that
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plays on people's fear, envy, and anxiety. we need a system that creates jobs and renovation and remove the barriers of entrepreneurs to hire people and i am afraid these kind of tax increases do not work. host: more of the headlines and all of this. "wall street journal" -- gop opposes fresh levies -- that is a look at "the wall street journal" headlined as women. taking a look as we take the next call. michigan, a cafe, a democrat. caller: i can give you an example of taxes. i am going to be cashing out of my retirement. it is very little, from the state of michigan. 30% between the irs and the federal tax and then i am
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probably going to be penalized for drawing unemployment -- illegal in the state of michigan. what it will do is amount to 50% tax. the current job that i have -- there are a lot of people will come into the store and buying, and a majority of them are well- to-do. if my employer is what to do. she does not share her wealth. i do not see any poor people coming into the store purchasing anything. and i will be heading off a bank to a food pantry in an hour and a half and i don't see what the people at the food pantry, either. -- will see people at the food pantry. -- wealthy people of the food pantry. there are a lot of well-to-do people in the county and i don't see any philanthropy to the most part. we need to close the loops.
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in terms of other countries, at the very least they have health care for their people, which is a huge, huge financial risk when you don't have it. and it is a huge piece of mind when you do have it and it does not cause you an arm and a leg, which is the case in canada and the rest of the world. host: thank you for weighing in. julia, independent line. new jersey. what are you making about what you are hearing? caller: this class warfare idea of paul ryan has been going on for more than 20 years. the company i retired from in 1998, took a voluntar >> we are going to lead this now, take you live to the floor of the u.s. senate. you can find this conversation online at the senate gaveling in shortly for general speeches here
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senators will turn to legislative work at 4:30 p.m. today when lawmakers will consider extending certain trade preferences. with a vote on that measure scheduled for 5:30. it's the first step to eventually consider trade agreements for three countries. you're watching the senate live right here on c-span2. the presiding officer: the senate will come to order. the chaplain dr. barry black will lead the senate in prayer. the chaplain: let us pray. o god, our defender, we call to you in prayer. our nation cannot prosper without your watch care and your gracious providence.
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for your loving kindness and tender mercies, we praise your name. as our senators take seriously grapple with the complex challenges of our time, be for them a shepherd who leads and guides. lead them to live with a generous spirit that comes from a confidence in your abiding presence. may they walk in the path of gratitude, meditating on your blessings and glorifying your name. thank you for being our refuge and defense.
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amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america, and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c., september 19, 2011. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable richard blumenthal, a senator from the state of connecticut, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. the presiding officer: the majority leader. mr. reid: following any leader remarks the senate will be in a
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period of morning business. senators will be allowed to speak for up to 10 minutes each. following morning business senate will resume consideration of h.r. 2382, the trade assistance legislation, tied in with the g.s.p. bill. at 5:30 there will be a cloture motion to proceed on h.r. 2832. we'll move to consideration after the vote. i ask unanimous consent that morning business be extended till 5:00 p.m. today so senators can speak regarding the tributes they wish to make to former senator charles percy of illinois. the presiding officer: without objection. mr. reid: mr. president, i am told we would like to end morning business at 4:45 so i ask unanimous consent morning business expire at that time. the presiding officer: without objection. mr. reid: mr. president, i was saddened to hear the terrible accident on friday which killed
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ten people and injured many more. we just received word an hour ago another person had died in the hospital. my heart goes out to those who were hurt and my thoughts are with the families of those who lost their lives. including the pilot of the world war ii era plane that crashed into the spectators. i commend the many responders who rushed to the scene friday, their quick thinking and skillful assistance saved lives. while this crash was devastating, and it was, it's fortunate and i'm glad the pilot took quick action to prevent additional loss of life. by avoiding a grandstand packed with thousands of expect taters. -- spectators. my four children and my son attended the show on thursday. my oldest grandson, mitchell, was at the event with his scout troop earlier on friday just a few hours before this terrible accident.
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although officials are still investigating the crash, initial reports indicate a piece of the plane's tail broke off prior to the incident and the accident. i hope that this terrible event, the first of its kind in this nation will not deter freedom attending air shows in the future. thousands of people enjoy these shows every year. the late senator ted stevens attended this show many times and told me that it's the best of its kind. it was the best of its kind. i'll continue to monitor the investigation, of course. mr. president, this weekend senator charles percy of illinois, a progressive republican and father-in-law to jay rockefeller died at age 91. he's been failing for some time and i maintained contact with senator rockefeller about his wife's father. i didn't know senator percy,
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only by reputation. but i do know that he was an independent thinker and a moderate who was always -- who always put his country before party. the senate could use more of his brand of pragmatism today. senator percy was a promoter of environmental relations and consumer regulations, an outstoab spoken opponent of the vietnam war and a proponent of nuclear nonproliferation. he was a businessman and was often mentioned as a presidential contender. this body, the senate honors him for his faithful scoffs to his country as a sailor and as a member of congress. my thoughts are with his family including senator rockefeller and his lovely wife sharon. mr. president, today president obama laid out a commonsense plan to substantially reduce the budget deficit. i congratulate president obama for his vision. last week he presented the country with a road map to
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reduce our jobs deficit, a proposal 0 to create nearly two million jobs and niewf unemployment by a percentage point. today he has offered a path way to reduce our budget deficit, our jobs deficit, but a budget deficit. it's a concrete strategy to utt can the deficit by more than $4 trillion over the next decade and to do it fairly. his plan calls for shared sacrifice for all americans including those who can best afford to help. calls on those who have benefited from the tax policies that dunk sunk this country deeper and deeper into debt to help us get out of this debt. americans know shared sacrifice is the best path to fiscal sustainability. all the polls indicate that. republicans believe that, democrats believe that. independents believe that. they believe that many of the richest few should pay more, and one of the richest of all,
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warren buffet, agrees. that's why the president's proposed the so-called buffet rule, that no american making more than a million dollars a year should pay a lower tax than this nation's middle class. this rule would apply to the top .3%, that's all, mr. president, a small group of americans. but they're the richest of the rich, just like mr. buffet. warren buffet believes it's unfair he pays a lower income tax than his secretary. this is we said, "if you're in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%." actually, mr. president, it's more than 99%. it's 99.7%. there are about 22,000 people in this country who make more than a million dollars a year. this is net income. yet pay less than 15% of their income in taxes. the top 400 earners in this country all of whom make more than 110 million a year pay a
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small percentage of their income in taxes, a smaller share than plumbers and teachers and factory workers. more than anyone else these millionaires and billionaires benefited from bush tax cuts that contributed $3 trillion to our deficit. they helped plunge this nation into a financial hole. yet congressional republicans believe middle-class families and seniors, not the millionaires and billionaires, who have enjoyed trillions in tax breaks should bear the burden of getting us out of that hole. a balanced approach means that those who benefited the most from policies that created our deficit should also help solve our deficit. the crisis that we have. a balanced approach means everyone pays his or her fair share, that means the middle class, seniors and those who can least afford it will not bear the heaviest burden. so i commend president obama for insisting on basic fairness as we address our deficit problem.
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last week was a productive one here in the senate. we reached a bipartisan agreement to pass emergency aid for communities affected by floods, tornadoes and wildfires. we reauthorized the federal aviation administration, keeping 80,000 safety inspectors and construction workers on the job. and we passed a highway bill that will keep 1-8 million people at work building bridges and highways. congress has no duty more pressing than people americans back to work and this highway legislation will do just that. but we can and do more to ease the unemployment crisis in this country. that's why we will take up the trade assistance adjustment legislation. the t.a.a. or trade adjustment assistance legislation helps workers who lose their jobs because of international trade to learn new skills so they can re-enter a changing work force. and it helps pay for insurance while training for new jobs. a global economy means fierce global koch digs. unless our work force is
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flexible and well trained we cannot hope to compete. between 2001 and 2008, americans lost 2.4 million jobs because of trade with china. trade adjustment assistance program is retraining messenger of these people getting them back to work an boost owrg economy at the same time. it's unfortunate my republicans who care so much about treatment treatment -- free trade free tre prevented this from moving forward. we've known for a long time we would move this trade adjustment assistance. it's unthinkable that the republicans would stop us from doing that and that's just what has happened. as we struggle to rebound from the worst recession in generations it's unthinkable we would abandon hard-working americans who lost their jobs through no fault of their own, that trade adjustment assistance provides the life line they need to get back on their feet.
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mr. president, would the chair announce the business of the day. the presiding officer: under the previous order the leadership time is reserved. under the previous order the senate will be in a period of morning business until 4:45 with senators permitted to speak therein up to 10 minutes each. mr. reid: i would note the absence of a quorum. the presiding officer: without objection the clerk will call the roll. quorum call:
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the presiding officer: the senator from arkansas. a senator: i ask that the quorum call being dispensed with. the presiding officer: without objection. a senator: also ask for unanimous consent to speak for up to 15 minutes. the presiding officer: without objection. mr. boozman: thank you, mr. president. in the decade that has passed since the devastating attacks of 9/11, we have seen enormous changes in our daily lives. for many of us, these changes have become routine. we have become more alert of potential suspicious activities, accustomed to additional screening procedures at airports, and understanding of additional security precautions in places that could be seen as potential targets for terrorists. for many other americans, though, their lives were altered in ways that are anything but routine.
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these are the families, friends, and brothers in arms of those who are given their lives in the global war on terror, including the over 3,000 lives taken in the horrific attacks on our nation on september 11, 2011 -- 2001. this past sunday was a somber day to reflect, remember, and honor those lives that have been cut short by terror. on sunday morning i spoke at my church about the impact 9/11 had on me personally and us collectively as a nation. it is important to take the time here on the u.s. senate chamber to remember these brave heroes. we all remember where we were at the time the plane struck the towers and the awful feeling when we realized that this wasn't an accident. we remember the emotional outpouring of our nation shared and how the tragedy brought us all closer together.
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what happened after the moments of devastation on september 11, 2001, unified our nation and demonstrated the perseverance and the will of the american people. we remember the people who refused to leave an injured coworker and those who led others to safety. we remember the firefighters, the policemen, and all of the first responders who saved lives that day. many gave their lives in doing so. and we remember the heroes at the world trade center, the pentagon, and the brave passengers of flight 93. we also remember all the brave servicemen and women who fought and continue to fight to keep us free. they do so by choice. they do so out of love of country. and they do so to protect our nation, our freedom, and our values. since the 9/11 attacks,
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thousands of arkansans have been deployed to far regions of the globe to fight terrorism. the arkansas national guard, which has historically been a reserve unit, is taking on a more active duty role in the war on terror. units from the arkansas national guard have played a vital role on the war on terror, with deployments to afghanistan and iraq and some units having served multiple tours on the battlefront. america's military personnel and veterans of the global war on terror can be proud of all they have accomplished. their continued efforts brought bin laden, the mastermind behind these attacks, to justice along with a number of his top lieutenants and numerous taliban commanders. they continue to battle bin laden's fanatical followers and protect us from those who remain committed to inflicting harm on the united states.
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many of the veterans from the global war on terror have returned home with permanent life-altering injuries. we have worked hard here in this body and in the house to ensure that they and all the veterans of this war receive all the care and benefits they have earned and deserve upon their return. we must continue to uphold our promise to our veterans. we must also continue to ensure that our military personnel on the battlefield have everything that they need to successfully accomplish the mission and to return home safely. according to the u.s. central command, more than 6,200 service members have made the ultimate sacrifice for our freedoms in operation iraqi freedom and enduring freedom. each one is a portrait of bravery. navy corps man michael vann johnson jr., a
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native of little rock, was first arkansan killed in the battlefield on the war on terror. he was killed while attending to wounded colleagues in iraq. since his death, another 101 arkansans have given their lives for our country in the conflicts in afghanistan and iraq. this year alone we have lost five service members from arkansas. at the beginning of the year, sergeant ethan c. harden was killed in action in logger province of afghanistan. he was killed when insurgents attacked his unit with an improvised explosive device. sergeant harden was 25 at the time of his death. sergeant harden grew up in fayetteville, arkansas and was remembered by his high school principal as a young man with a pleasant, likable personality. his pastor echoed those thoughts
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calling sergeant harden a warrior who was motivated to take up arms for his country not out of any particular hostility toward the enemy but rather out of a strong desire to keep our country safe. last week after the death of sergeant harden, sergeant zana c. cramer was killed in kandahar province of afghanistan when the insurgents attacked her unit with an i.e.d. sergeant cramer was born in texas. she was 28 at the time of her death. sergeant cramer, friends and family say they will remember her lovely singing voice and her love of country, friends, family and fellow soldiers, including her canine partner joffa, a soldier for more than six years, sergeant cramer was assigned to the 212th military police
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attachment as an army dog handler. she and her canine partner were assigned to check vehicles and facilities for explosives and were carrying out a routine clearance mission when the blast occurred. in march, another i.e.d. attack in the kandahar province once again impacted arkansas. army corporal lauren m. buffalo of mountain pine, arkansas, was only 20 years old when insurgents took his life. corporal buffalo was carrying on the tradition of military service. his father and uncle served in the army and his great-grandfather was a pilot during world war war 2. his father said he was a dedicated military man who wrote music and liked to you hunt. last month two arkansans were killed when their chinook
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helicopter was shot down in the wardak province of afghanistan. the taliban claimed responsibility for the attack which resulted in one of the greatest loss of u.s. military lives in a single incident in the decade-long war in afghanistan. most of those killed in the attack were u.s. special forces personnel, navy special warfare operator senior petty office thomas a. ratliff of green forest, arkansas, was one of those special forces officers killed in the attack. senior which i chief ratliff grd from high school in 1995 and enlisted in the navy to begin the process of achieving his life long dream of becoming a navy seal. ing -- according to the green forest mayor, senior chief ratliff achieved one of the
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highest honors. he was 34 at the time of his death. air force tech sergeant john w. brown of solemn springs, arkansas, was also killed in that attack. an accomplished in his youth, sergeant brown played football and basketball. he went to john brown university on a swimming scholarship. he was known for his positive attitude, his intelligence and his sense of humor. after seeing a video of special operations unit, he abban tkorpbd plans to become -- abandoned plans to become a nurse anesthecist and enlisted in the air force where he was assigned to the 24th tactic squadron. sergeant brown was 33 at the time of his death. this is something that we need to remember not just on anniversary dates but at all times. it should serve as the ultimate reminder that we in this chamber have an obligation to come together and to make this
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country a better place. i ask my colleagues in the senate to join me in honoring their lives and their legacy as well as the sacrifice of all that have fought and died in operation enduring freedom, operation iraqi freedom and operation new dawn. let us never forget their sacrifices and let their legacies be an inspiration for every american. mr. president, i yield back and note the absence of a quorum. the presiding officer: the clerk will call the roll. a senator: mr. president? the presiding officer: the senator from michigan. mr. levin: before the clerk calls the roll, mr. president, are we in morning business now? the presiding officer: we are. mr. levin: mr. president, i want today to discuss two more ways to reduce the budget deficit by eliminating tax loopholes and special tax breaks and restoring fairness to the tax code while protecting essential programs for american families.
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last week i sent a letter to members of the joint select committee on deficit reduction outlining a seven-point plan that could lower the deficit by $1 trillion over ten years through some restored revenues. i spoke last week here on the floor about the necessity of addressing revenues, not just spending cuts, to achieve real deficit reduction. and i discussed in some detail two of the proposals in my plan: combatting offshore tax haven abuse and eliminating the tax loophole that forces taxpayers to subsidize stock option compensation for corporate executives. since i spoke last week here on the floor, president obama has outlined his ideas for deficit reduction. significantly, the president has embraced the need to restore significant revenues to reduce the deficit. i believe the president's proposals are an important step
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towards serious deficit reduction. some of his ideas indeed parallel the proposals which i've made to the joint select committee. today i want to outline and describe two more of my proposals each dealing with a tax loophole that benefits wall street at the expense of working families and our fiscal well-being. one would end the carried interest loophole that allows hedge fund managers to pay the lower capital gains tax rate on their pay for managing investments. the second would end the blended rate loophole. it gives preferential status to income from derivatives trading even in the case of derivatives which are just held for second or moments or minutes. that preferred status is given over the kinds of long-term investments that are more important in helping put capital to work, growing the economy and creating jobs.
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now each of twhaoes loop -- each of these two loopholes amounts to a subsidy. working american families who pay their taxes every year end up carrying an extra burden because these provisions allow wall street to pay a lower tax rate than the rate applied to average workers. i cannot see how anybody can explain to working americans that they must bear a greater tax burden so that hedge fund managers get a tax break on pay that often amounts to millions of dollars a year or so that speculative traders can pay a lower tax rate on so-called developments that they might -- so-called investments they might hold for just a few seconds. first let's talk about the carried interest loophole. hedge fund managers generally make their money by charging their clients two fees. first the manager gets a management fee. typically 2% of the assets.
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second, the manager typically gets 20% of the profits from those investments above a certain level. that 20% is known as carried interest and under current law hedge fund phaerpbgs can treat that -- managers can treat that income as a long-term capital gain taxed at a maximum rate of 15% and not at the higher ordinary income rates. what is the blended rate loophole? since 1981, those who trade in some financial products such as futures, contracts and options have enjoyed a specially created tax loophole that allows them to pay a lower rate than, for example, traders who buy and sell stock. no matter how long a speculator holds on to a futures or options contract, again, even if it's a few seconds, their gains and losses are taxed at a lower
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so-called blended rate. that is part at the capital gains rate, part as ordinary income. so a dealer who buys a stock and sells it within a year must pay taxes at the ordinary income rate while that same dealer who buys an option and sells it 30 seconds later gets to pay the lower capital gains rate on most of that income. these special tax breaks impose an unfair burden on american taxpayers and they contribute significantly to the budget deficit. based on estimates from the joint committee on taxation, eliminating the carried interest loophole could reduce the deficit by $20 billion or more over ten years. that joint committee has made no estimates of the cost of the treasury of the blended rate loophole, but it's reasonable to assume that ending it would reduce the deficit by billions
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of dollars. beyond their fiscal impact, these proposals would help restore fairness to the tax code. these tax subsidies give preference to activities that do not contribute much to economic growth or job creation the way other activities that don't enjoy the same subsidies do. instead they subsidize hedge fund managers and derivative dealers. take the carried interest loophole again for a minute. we tax income that investors receive from hedge funds and other investments at the lower capital gains rate because in theory at least those investments help put capital to work, creating jobs and growing the economy. but the fund manager, the hedge fund manager isn't putting his own capital at risk. he's just doing his job, the same as his employees or the janitor who cleans his office at night. this tax break doesn't reward
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risk taking or job creation. it rewards what is already an extremely lucrative profession. according to a survey by a magazine covering the hedge fund industry, the top-ten hedge fund managers last year each made at least $440 million. six made more than $1 billion in one year. now it's hard to imagine that we need to offer a tax break to encourage people to become hedge fund managers. similarly, the derivatives blended rate loophole doesn't just add to the deficit. it's plainly unfair. it's unfair not only to working americans who have to pay higher tax rates than these derivative traders. it's also unfair to investors who risk their capital in long-term stock and other investments that are more important to job creation, but don't enjoy that same tax break. this loophole gives preferential
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treatment to short-term speculative trades over long-term patient capital. and that's exactly the wrong message to send. so, mr. president, we should end these wall street loopholes. i've encouraged the members of the joint select committee to end them. we should end them because they add to the deficit, because they subsidize activity that does not need a subsidy, and that does not add much to economic growth, and because they're unfair to the millions of american taxpayers who do not enjoy the same tax breaks and have to pay more in taxes to make up for these unfair subsidies. eliminating them would be good for our economy. it would be able to reduce the deficit by billions of dollars a year. it would help to fund important programs that protect seniors and children, programs that make our nation stronger. so i hope that the joint select
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committee will look hard at these and other proposals in my plan as they carry out their difficult task, and i will be back again in the next few days to discuss three more ideas that can reduce the deficit, protect the middle class and avoid draconian cuts in vital programs. i thank the presiding officer, i yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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be set aside. the presiding officer: without objection.
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mr. sessions: each year i nominate outstanding nebraskans as angels in adoption thanking them for their shining examples of caring for children in need, children who want nothing more than a family of their own. mr. johanns: this year i'm pleased to share the story of paul and mandy carney of, nebraska, true adoption heroes who have opened their hearts and home to three young boys. after paul and mandy had their biological daughter lydia and became parents for the first time, they couldn't imagine a child not having the blessing of a loving family. soon after they learned of a young mother award -- a ward of the state herself who was considering making an adoption plan for her then-22-month-old and 4-month-old boys named stevens and edward. in august, 2007, the boys were
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placed in the meeting home and the plan was put in place for an open adoption. however, the birth mother left without relinquishing her parental rights. this was a setback for the meetings but they continued to care and love the boys with the hope that they could still someday adopt them. several months later, the boys' birth mom returned asking for another chance to mother steven and edward. the meetings took time to grieve their loss but did not give up hope of adopting children. in december, 2008, the meetings were informed by nebraska children's home society that another birth mother selected their family and wished to place her soon-to-be born son with them. evan was born in january, 2009. the meetings were overjoyed. they welcomed evan into their family with joy.
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not long after they settled in with their new son, the meetings received yet another call. steven and edward's birth mom had again made a decision to relinquish her parental rights. seeing the move the meetings had for her children, she requested that the boys be placed once again with paul and mandy. this was a big decision. it meant instantly doubling the number of the children in their family from two to four. they knew that providing love and care to three adopted children is a big responsibility. well, you won't be surprised to learn that paul and mandy, well, they didn't hesitate a moment. with open arms, they welcomed steven and edward back into their lives. and the adoption was finalized last year. i'm told lydia has fully adjusted to being outnumbered by
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three brothers. all four are fortunate to have each other, a wonderful home, and loving parents. so it is with great pleasure and admiration that i nominate paul and mandy meeting as angels in adoption. they are a wonderful example of compassion. my hope is that their story will encourage others to open their hearts to vulnerable children whose only dream is a loving and a permanent home. thank you, mr. president. i yield the floor. i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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objection. mr. kyl: and i use as much time as i may consume. the presiding officer: without objection. mr. kyl: this month marks the third anniversary of the federal seizure of fannie mae, freddie mac, the collapse of lehman brothers and other events that marked the turning point in the global financial crisis. at the time many journalists and pundits and policy-makers were eager to interpret the crisis as a failure of capitalism, as some called it, or a failure of free markets. that was a famous "newsweek"
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cover that said we're all socialists now. well, this interpretation is fundamentally flawed, and i want to speak a little bit today about that. blaming capitalism and free markets and deregulation for causing the crisis that occurred three years ago does not tell the real story. we must remember that misguided government policies played a big role in pumping up the housing bubble, and they subsequently played a big role in delaying our recovery from this crash. so today i want to briefly discuss the findings of several economists that highlight these points. loose monetary policy was one such misguided policy that fueled the crisis. writing recently in the quarterly journal national affairs, stanford economist john taylor pointed out that u.s. monetary policy became highly discretionary in the years leading up to the 2008 crisis whereas monetary policy had been
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more rules-based during the previous two decades. taylor has determined -- i'm quoting -- the low interest rates set by the federal reserve from 2003 to 2005 added fuel to the housing boom and led to risk taking and eventually a sharp increase in delinquencies and foreclosures and in the toxic assets held by financial institutions. a more rules-based federal funds rate, particularly one that held to the general approach that characterized fed decisions throughout the 1980's and 1990's would have prevented much of the boom and bust that followed, end of quote according to economist john taylor. in other words, with more prudent housing policy, the bust would have been smaller. another cause of the bubble was federal housing policy especially the reckless activities of government sponsored enterprises, fannie mae and freddie mac operating under an implicit government
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guarantee played a central role in the housing bubble. the government's guarantee permitted them to operate without adequate capital to assume more risk than competing financial institutions and to borrow at a below-market rate of interest. between 2004 and 2007, fannie and freddie became the largest buyers of so-called subprime and alt-a mortgages. as columbia business school economist charles kolomuris observed, logic and historical experience suggest even in the presence of loose monetary policy and global imbalances if the u.s. government had not been playing the role of risky mortgage purchaser in the years leading up to the crisis, mortgage-related losses would have been cut by more than half. end of quote. to be sure, government entities were not the only institutions promoting the growth of nontraditional mortgages, but government policy was the critical factor that made the
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bubble so dangerously large. housing finance expert peter wallace of the american enterprise institute argues -- and i'm quoting -- without the huge number of defaults that arose out of the u.s. housing policy, defaults among mortgages in the private market would not have caused a financial crisis. end of quote. so with better, more responsible federal housing policies, the crisis might have been avoided or been less severe. government failures have also in the words of nobel prize-winning economist gary becker prolonged the crisis. indeed, the economy has not responded well to the prodigious spending, trillions in debt and countless new regulations imposed during the obama administration. the economic policies during the last few years have seemed to hamper the confidence of job creators while creating widespread uncertainty and
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undermining confidence. economist michael boskin noted in a piece entitled "the obama presidency by numbers," said this and i quote -- "the share of americans paying income taxes is the lowest in the modern era while dependency on government is the highest in u.s. history." end of quote. in january, 2009, the u.s. employment rate stood at 7.6%. by october, 2009, it had surged above 10%, despite the passage of the $1.2 trillion stimulus bill, and unemployment has been above 9% for 26 of the 30 months since the passage of the stimulus. in fact, boskin has found that even by the administration's inflated estimates of jobs created or saved by the stimulus, each job has cost
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cost $280,000. each job, $280 million. that's five -- $280,000. remember, that's borrowed money that will eventually have to be taken out of the private sector to pay it back. in addition to the failed stimulus package, the last congress also enacted a pair of 2,000-page bills that were supposedly designed to reform the health care and financial systems. in the view of becker, and again i'm quoting -- "these laws and the continuing calls for additional regulations and taxes have broadened the uncertainty about the economic environment facing businesses and consumers. this uncertainty decreased the incentives to invest in long-lived producer and consumer goods. particularly discouraged was the creation of small businesses, which are a major source of new hires." end of quote. my point here is not to needlessly pile on president obama but to underline the need
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for a new approach. his policies have made things worse, and the uncertainty surrounding his new proposals has crippled america's economic recovery. as karan any melon economist alan meltzer has written -- "high uncertainty is the investment of growth." american job creators are eager to know whether their taxes will be raised at the end of 2012, whether the new health care law will force them to lay off a substantial number of workers, whether the dodd-frank bill will impose unforeseen new costs and whether the administration will impose even more regulatory hurdles. notably, despite the administration's recent rhetoric about regulatory review, the massive new regulations in its two signature bills -- health care and financial regulatory reform -- will not be reconsidered. so in conclusion, mr. president, the 2008 financial crisis was not simply a failure of
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capitalism or a result of free market economic policies. we can reasonably say that the crisis would not have been nearly as severe or may have been avoided entirely without misguided government policies. all of us here would like to see a strong economic recovery, but reckless spending, debt, more regulation and government intervention haven't boosted the economy so far. it's time for another approach, one that eshoos the topdown washington management and focuses on creating incentives and long-term certainty in the private sector. mr. speaker, i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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rrescinded. the presiding officer: without objection. mr. rockefeller: mr. president, i rise today with a deep sense of honor and a deep sense of sadness to speak billion of the late-senator charles haring heresy of illinois, who passed away this past disait with his family completely surrounding him. before i begin, though, i also want to speak about two other losses to the senate family which grieve me greatly. one of course is sarah ken dirk the beloved daughter of senator ted kennedy, and also eleanor mondale, the beloved daughter of the vice president and senator
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mondale. each of these two wonderful people died at the age of 51. and it's incomprehensible, it's terrible, they're far too young to be taken from us, the percy and rockefeller family love flows to their families. mr. president, senator chuck percy was blessed to live a long and accomplished life. he lived to be 91. many of my colleagues know that senator percy was a distinguished republican member of the united states senate for 18 years. that being from 1967 to 1984, which was the year that i came into the senate. he was chamber, as people know, of the senate foreign relations committee and man with an absolutely vast -- vast -- talent that he poured into every aspect of his public service and his private business career also.
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and he was just extraordinary in that way. he had brains, he had vision, he had stem in a, he had -- he had stamina, he had energy, he was terribly athletic. he could do anything for any amount of time and under all this was built this incredible discipline that made him do it all. most importantly to the senator, the one speaking, chuck percy was my father-in-law for more than four decades. since i was lucky enough to marry his unique and beautiful daughter sharon percy, who i might say at this point has many of the characteristics and natures and habit habits of senr percy that i'm ghg to talk about. it just worked out that way. she has those characteristics. he extended to me in every way the great gift of joining that family that he nurtured and watched over and cared for,
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protected all of his life. and for that, obviously, i'm forever grateful. i want to share a few remembrances of senator percy with my colleagues because many of our colleagues here didn't know him. a few did, but most did not. also with the people of illinois, the two senators from illinois will have more to say on that, who put they are trust in him and with all the family and friends who are hurting from the news of his loss. chuck percy was absolutely unshakable in his belief in the future. he believed in our country, and he believed in our ability to make this world a better chance, if we would only put our minds and will and discipline to it. avenues believer and he -- he was a believer and he saw not through a glass darkly but
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through a glass brightly. it was his nature. and he was guided more by what was right than by party label. in 2008, then-senator barack obama noted that his hope was that more republicans would look at current members of their party for inspiration and then compare them to abraham lincoln and chuck percy, two pretty good republicans, he said. what made chuck so magnetic and so successful was his determine initial share his apartment mix, to share his sense of promise with everyone around him, even at a very young age. chuck percy began his business career not at mellon howe where in fact at the age of 29 he became the youngest c.e.o. and president of any major company
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in america, but in fact he did it years earlier at the age of four. his family was impoverished. they had been devastated by the great depression. they were in bankruptcy. they were living and shifted from place to place in some of the most difficult parts of chicago. so chuck percy at the age of four wanted to help. and he knew how to help. the entrepreneurial instinct and so he took cookies, baked presumably at home, and sold them on the streets of chicago for a very little amount of money, but he made money from that, which he then turned over to the family. he helped his impoverished family weather the great depression and pushed himself by force of will. to get an education, all the way through the university of
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chicago on scholarship. before his business career took off, like many men of his generation, chuck percy went off to war serving his country for three years as a naval officer during world war i i upon returning home, he rejoined bell & howell and led that company from 1949 to 1964, through an astounding 32-fold increase in the expansion of sales. in what were then cutting-edge film products. it was a very famous company then. he launched his political career in march, part to get back into public service because he missed it, he yearned for it. one could argue that business might have been his real calling or maybe public service was, but to him he was interested in everything and wanted to do everything. so he had a chance to get back into public service.
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but he had no grand ambition. he simply wanted to find ways to challenge himself, always that, and to help make the country better. chuck percy had a seriousness of purpose. as a young man he resolved to read all of the great books, and i mean that. in tomes. he had a professor -- and i can remember watching him do that listening to some of the discussions -- where he read the great books of his generation, generations that preceded, the master works as well as the constitution, the bill of rights, "the federalist" papers, and he not only read them but he discussed them ought with his professor, and it was a stunning, again, emphasis to drive himself to increase his knowledge to the highest level possible. but chuck also had a sense of
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fun and of sport. he loved to be active. he loved to ski, among other things, and as fate would have it, he was skiing in idaho when then-president eisenhower called him in 1959 to see if he could be persuaded to work on a project to reinvigorate the republican party by leading a commission on national goals. it was an ambitious task, and rife with political risk. for chuck. but chuck didn't hesitate. his work helped pave the way for his election, in fact, to the senate, in 1966, not by design but because of its excellence and because of the depth of his wanting to understand what we had to be ready for by our 200th birthday in 1976. but even more than that, his report served as a template that
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i've mentioned for the reflection, for the soul-searching that went on in this country ahead of that 1976 bicentennial. he really cared about the 200th anniversary of america. everybody did. but he really did. and he wants to know what we could do better, what we could do more of, and that's what he used that commission for. he wanted america to be a better nation. as a senator, chuck percy took a strong interest in the economy and international affairs. he was chairman of the foreign relations committee. he traveled the globe, going to countries whose names are still hardly known at a time when very few senators were even traveling at all. he could do that as chairman of foreign relations, but he wanted to do that. and the he was good at it. and he would get into the tiniest crack of a little, small
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village to try and meet people, maybe even breaking cultural habits by trying to shake hands with people who were not allowed to shake hands because they were considered too impoverished. nothing discouraged him, and he wanted to make himself a better person and a better senator. chuck was on a trip to inspect the battlefields of vietnam, even though he was very skeptical of that war. he was on a helicopter when his aircraft took fire from viet cong in a hamlet about 90 miles north of saigon. the helicopter lifted off for safety, but left chuck with four other men and just two guns between them to huddle against the ground as mortar shells exploded 15 feet awade and small-arm fires whizzed overhead. well, they came back and they rescued them and the story went on.
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he was fearless. chuck, when he came to the senate, he really took on the culture of the senate. he didn't like a lot of what he saw. and i'm looking, as he speak now, at pages. he thought there was no reason why girls could not be senate pages, just as easily as boys. but that was the custom then. girls were not deemed to be able to do that. there was an attitude here in the senate then that the opportunity of being a page was suited for boys. and during the debate, interestingly, some senators worried about girl pages not being able to carry copies of the "congressional record" to the senate desks. he cosponsored the equal rights amendment and spent the better part th of his career arguing tt women should have the same
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opportunities as men. but senator percy new firsthand from the remarkable women in his own life, his own family, and remarkable women in his office that women can do anything that men can do and perhaps better. in fact senator percy was furious when he found out the textbooks paid for by the federal government included sentences like -- quote -- "girls should be nurses and secretaries while boys should be doctors and business mern." close quote. chuck percy also cared deeply about helping less fortunate americans. please remember -- people think of him as always having been very rich. no, he was very poor. his family was even peer. he struggled. thea's he strugged for a long -- he struggled for a long, long tiesm he was pushed the first legislation to create homeownership for low-income
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americans. he focused on older americans. he wrote a book back in 1974 about the daunting process of growing old in america. this is back in 1974. just nine years after medicare. and the shameful living conditions and hospital conditions that the elder poor had to face. his book was a call to action and a moral imperative to restore dignity to aging. chuck favored open government and sunshine laws. at a time when it was not popular. he felt strongly that a democracy -- in a democracy the military establishment should be held accountable and answer specifically to civilian leaders. he also opposed for the most part war and took many positions that undoubtedly hurt him within
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his peamplet but in fact he defied party labels, mr. president, adescribing himself as -- quote -- "ferven "fervently moderate." so aggressively did he seek out even-handed n.a.s. it was known by those who knew him that at his dinner parties at his house, at about wide five a week -- i guess not during a session -- they were always equally divided between democrats and republicans, specifically, one democrat and one republican, and different parts of the government and business and everything. it was a matter of principle to him. he wanted to hear all sides. though he was absolutely resolute when he made up his mind. one of the things that i thought was most captivating about chuck was the fervor with which he held his beliefs. senator percy's desire to be president became to be well known. and he wrote actually about it
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publicly. but the timing was never quite right, and so that didn't happen. he lost his race for a fourth senate term in 1994, just when this senator was coming in to the senate, and was one of several very difficult times that chuck percy faced with his life with courage and with grace. early in his life, number one, his family was literally penniless when his father lost a job, all of their savings, and then later at midpoint of his career he lost a beloved daughter, sharon's twin sister valerie, in an unspeakable and lethal crime that still tears at the soul of our family. and then in his final years, he was struck down by alzheimer's
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for a decade or more. there is no cure for alzheimer's. the end was fated. he was never downcast. he was always, until he no longer could, trying to read, walk, do something, play tennis, have meals outdoors, whatever. but it was through the havel his die -- through the hall of his dynamic and full life that chuck percy became the man i've been privileged to know, admire and love deeply. chuck warmed to a challenge. he leaned in to life in every way, insisting for himself, his children and his grandchildren that the best part of living consists of learning, of improving, and trying to do better each day. his energy and his focus on this process, fueled in part by
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christian science. it was amazing, unmatched, as far as i'm concerned. he was an incomparable father to sharon and to her siblings. he lived what he believed. very simple. never wavered in his unconditional support and love and sought and created truth. america benefited greatly from his life and from his service, and the entire percy and rockefeller families have been incredibly and indelibly shaped by his legacy and by his love. mr. president, i yield the floor. but first i ask unanimous consent that a statement from the percy and rockefeller families be submitted to the "congressional record" and placed just after my statement as if read. the presiding officer: without objection. mr. rockefeller: i thank the
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presiding officer. mr. durbin: mr. president? the presiding officer: the senator from illinois. mr. durbin: first let me extend my sympathy to my colleague jay rockefeller of west virginia, son-in-law of the late chuck percy, of course his wife and senator percy's daughter shaurpb. they are great tprebdz -- daughter sharon. they are great friends. i know this loss, though they all found it inevitable, still brings pain to their lives. i hope the reflection of so many people on the greatness of chuck percy on the contribution to illinois and to america will help to in some ways alleviate the pain they are going through. i join my colleague senator kirk today in paying tribute to our fallen colleague and friend, senator charles percy, who died on saturday. he served illinois and our nation for 18 years here in the united states senate. although he ran against the two men who were my greatest political inspirations -- senator paul douglas and senator paul simon -- i always regarded senator percy as a friend and as
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an honest, honorable representative of our state of illinois. it's a little known fact about chuck percy that he was near sighted in one eye and far-sighted in the other. that unusual vision was a good metaphor for his politics as well. he described himself as fervently moderate, a progressive republican. he said he was -- quote -- "a conservative on money issues but a liberal on people issues." end of quote. he used the word liberal in the days when you could get away with it. charles harting percy was born in 1919 in pensacola, florida. his family moved to the chicago rogers park neighborhood when he was a baby. his father worked as a bank clerk, his mother taught violin. the bank at which his father worked failed in the depression and percy family was force d into bankruptcy. chuck percy got his first job at the age of five selling magazines to help his family. he sold his mother's home made
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cookies door to door, rose at 3:30 in the newspaper to deliver newspapers and parked cars and worked as a janitor while in high school. he worked his way through the university of chicago on a half-tuition scholarship and along the way had an economics professor, dr. paul douglas. in 1936, while chuck percy was still in college, his sunday schoolteacher encouraged him to enter a training program at the man's company, the company was bell&howell, a small manufacturer at the time of home movie cameras. after graduating from the university of illinois with a degree in economics, he went to work full time at bell and howell. at 23 he was elected to the board of directors. at age 29 he was named bell and howell president and chief executive officer, the youngest person to head a major american corporation up to that time. in 14 years under chuck percy's leadership, bell and howell extended its reach in the consumer electronics market. its number of employees increased 12 fold and its annual
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sales climbed from $13 million to $160 million. in 1964 chuck percy was a delegate to the republican of national convention, the same year he ran unsuccessfully for governor for illinois. two years later chuck percy challenged that former university of chicago professor, paul douglas for his seat in the united states senate. i knew all about that campaign. it was my first. i was a college student and an intern to senator douglas and wefpbt back to work on his -- went back to work on his campaign in illinois when chuck percy challenged him. in the final weeks of that campaign i was with senator douglas in my hometown of east st. louis, illinois. he was staying at the holiday inn and he received word early in the morning that chuck percy's daughter valley had been murdered in their home. senator douglas, i remember this to this day, saw a church across the street from that holiday inn, st. henry's catholic
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church. and though douglas was a quaker and later unitarian, he said i'm going to that church to pray. he went in and he prayed for the percy family. he walked out the door and he said in quiet tones to his staff, this campaign is over until chuck percy announces it will resume. and we will say nothing about this tragedy other than to express our sympathy to his family. what a different day in american politics. both candidates declared a halt to the campaign. it lasted nearly one month. it was the month of september. that decision showed a humanity and respect which is missing in too many occasions from today's politics. chuck percy went on to win that campaign. in the senate he backed consumer protection and environmental efforts, supported international nuclear nonproliferation. when you listen to his agenda of priorities, you find it hard to place it in today's very conservative republican agenda. a navy veteran, he was an
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outspoken opponent of the war in vietnam. it's an act of political courage that earned him a place on richard nixon's infamous enemy's list. he was the first senator to call for an independent prosecutor to investigate watergate. 1970 he joined the foreign relations committee. a decade later when he rose to chair that committee, he explained his views on foreign policy this way -- and i quote -- "i don't want foreign policy developed just by one party and ride roughshod over the other party. i much more value a bill that has bipartisan support. that's what this committee achieved in world war ii, achieved in the marshall plan." chuck percy was reelected to the senate in 1972 by more than one million votes the largest plurality of any senator in the nation that year. he won a third term in 1978, running for a fourth term in 1984, he was challenge tphad bitter primary by an arch conservative, a man whose money came from out of state and was never really traced. although he won that primary, he
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would go on to lose the general election to my friend, senator paul simon, who won with 50.1% of the vote. that same year senator percy's son-in-law, our colleague, senator jay rockefeller, was elected to the senate from west virginia. after leaving the senate, senator percy said his proudest accomplishment in office had been pushing for more opportunity for women in the federal government. his lasting legacy goes way beyond that. in 1970 it was senator chuck percy who persuaded richard nixon to nominate one of senator percy's former classmates for a spot on the court of appeals for the seventh circuit. five years later that former university of chicago classmate, john paul stevens, was elevated to the u.s. supreme court where he served with distinction until his retirement last year. i can recall when senator percy was in office. i had backed his opponent, senator douglas, whom he defeated in 1966. and i contacted his office. i was a student at georgetown
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law school. we had a group of democrats and i thought i will take a flier here. let me call his office and see if he'll meet with us. of course he said yes and the next thing you know ten georgetown university law center young democrats were sitting in chuck percy's office. he knew it and we had a good time, a good exchange. that's the kind of person he was. that's the kind of politics he practiced. that's a reminder of what life was like not that long ago. after leaving office, senator percy became an international relations trained consultant, board chairman of an organization that administers education and cultural exchange programs. two years ago his daughter sharon, percy rockefeller announced that her father had alzheimer's. senator percy had been struggling with the disease for more than a decade. even out of office, he would call me from time to time usually with a request about washington, d.c. illinois was his love and chicago area always his hometown. but he had a passion and love for washington too and he worked hard to make this a better city. i want to offer my deepest condolences to senator percy's
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wife of more than 60 years lorraine, to sharon and jay rockefeller and all the percy children, grandchildren and great-grandchildren. i feel honored to have been schooled in politics in illinois during this era, to have known such extraordinary men when i was just a youngster, a college student starting out. knowing all of them and watching them in public service gave me an impression and an ideal of what this job should be all about. when i heard of senator percy's death, i know that his family had anticipated it but it brought back many memories of the fine contribution he made to illinois and to the nation. we are lucky to have men like him successful in so many ways devoting a major part of their lives to public service. we're also fortunate that they did it with such a feeling of responsibility not only to their state and nation, but also to be public servants in the best sense of the word, working with
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everyone to try to find solutions to problems. it's a lesson we need to relearn today. mr. president, i yield the floor. the presiding officer: the senator from illinois. mr. kirk: i ask unanimous consent to suspend with the time limitation and continue for 8 tphopbts eulogize -- 8 minutes to eulogize senator percy. spoeup without -- the presiding officer:. mr. kirk: i want to eulogize senator percy who we lost on saturday, great and one of the most successful illinois senators. senator percy dedicated much of his life to serving our nation first in the u.s. navy and then for 18 years here in the united states senate. i think i'm the only member of the senate who actually voted for senator percy and volunteered in his campaign along with my mom when i was only 12 years old. senator percy, we knew, was a
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focused and disciplined leader who succeeded at nearly everything that he put his mind to. he graduated from my alma mater, nuture high school and also lived in kenilworth, illinois, my hometown. he later went tour of duty of chicago. after getting a bachelors degree in economics, he joined a small camera company called bell & howell. he then led bell & howell starting at the age of 29, moving the company to making military cameras and movie projectors and then a new product called microfilm, as the leader of bell &howell, he was one of our greatest job engines of the state of illinois. employment grew 12 times under his leadership and earnings 32 times. but charles percy wanted to do
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more for his country. as we heard, at the request of president eisenhower, he helped write better decisions for america as part of the republican platform of 1960. charles percy ran for governor in 1964, but he lost that election. in the not so proud tradition of illinois, that governor then went to jail and percy became seen as a corruption fighter in our state. now, just two years after that defeat, charles percy was elected by the people of illinois to represent them in the united states senate, defeating paul douglas. now, during that campaign, his daughter valerie was murdered in my hometown and his hometown of kenilworth, one of our town's only murders. it was through this tragedy that we saw so clearly charles percy's quiet dignity.
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in the senate, percy was first known as a proponent of a foundation to back homeownership for low-income families. he was the toast of this town in the 196 0's, described by "the new york times" as the hottest political article in the republican party. he even led polls in 1968 for the republican nomination for president. senator percy, though, was at heart an independent who took on corruption in his own state and especially his own party. he moved to the first resolution calling for an independent prosecutor on the watergate scandal. "the new york times" reported -- quote -- "nixon fumed to his cabinet that he would do all he could to make sure mr. percy, who already voted against two nixon nominees for the supreme court, would never become president." senator percy fought corruption wherever he saw it, and in 1977,
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he took on white house budget director burt lance for back dating checks to gain tax deductions. lance later resigned. senator percy was best known for his work as the chair of the senate foreign relations committee. during historic times, when the united states recovered its nerve, it stared down the soviet union and it won the cold war outright. he was a gentle man, disciplined in swimming every day and a devout christian scientist who read the bible each evening. senator percy was a strong, honest and printed man whose integrity remained uncompromised in nearly 20 years in the u.s. senate. he believed that accountability, checks and balances and transparencies should be the driving force of government. we will miss his moderate, fiscally conservative brand of politics. his legacy is one of genteel,
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thoughtful leadership, and his fight against corruption in the state of illinois is sorely missed today. i send my sincere condolences to senator percy's wife lorraine and his children sharon and roger and gail and mark and their spouses, including our colleague, senator rockefeller. and to the grandchildren and great grandchildren and many friends and family that will mark his passing at the funeral on wednesday. senator percy was one of the best-remembered illinois senators. he represents a tradition in some sense followed by me, and as a former volunteer for his campaign and voter for him, we mark his loss today. with that, mr. president, i yield back. the presiding officer: morning business is now closed. under the previous order, the senate will resume consideration of the motion to proceed to h.r. 2832, which the clerk will
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report. the clerk: motion to proceed to calendar number 166, h.r. 2832, an act to extend the generalized system of preferences, and for other purposes. the presiding officer: under the previous order, the time until 5:30 p.m. will be divided and controlled between the senator from montana, mr. baucus, and the senator from utah, mr. hatch, or their designees. the senator from montana. mr. baucus: mr. president, i might say to my good friend from alabama, i don't plan to take a long time. maybe about ten minutes total. i will keep my good friend well informed of where we are at this point. mr. president, i ask unanimous consent that the following members of my staff be granted floor privileges during the consideration of the generalized system of preferences act. the presiding officer: is there objection? without objection. mr. baucus: they include jane beard, sarah babcock, madeleine
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forbes, steven simpson, jonathan goldman. mr. president, in 1934, president franklin delano roosevelt said, and i quote -- quote -- "no country, however rich, can afford the waste of its human resources. demoralization caused by vast unemployment is our greatest extravagance." end quote. president roosevelt said these words at a fireside chat nearly 80 years ago. our economy was slowly on the path to recovery after suffering the worst national crash in american history. and roosevelt had turned his focus to helping the permanent army of unemployed. those are americans that didn't
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have jobs. his resulting investment in america's human resources put millions of people back to work. today we face a similar situation. after a significant financial crisis, our economy is in tough shape, our economic recovery is fragile but improving. housing foreclosures have slowed. investors are looking for new opportunities. we have a long way to go. 14 million americans are still looking for work. 14 million. that's just unemployed. if you add the underemployed, it's probably closer to 20 million. maybe more than that. like president roosevelt, we must bolster our investment in america's human resources, because as in 1934, america's strength is in its people. when people are denied the opportunity to work, they are
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denied the dignity that comes with that work let alone income, let alone providing for their family. trade adjustment assistance or t.a.a. is the right investment in america's workers. t.a.a. provides training, provides income to support thousands of americans so they can get a good-paying job right here at home in our own country. t.a.a. helps them earn that dignity that comes from putting in a good day of work. i worked with my friend, ways and means chairman dave camp of michigan, good man. we worked together on a t.a.a. agreement that improves the accessibility and effectiveness of the program. i heartily recommend dave camp. our staffs worked close over and over again to try to find a common agreement for
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reauthorizing trade adjustment assistance. we worked to scale back the cost of the program while maintaining the important support and training that helps workers secure good-paying jobs here at home. the amendment we're offering today is the agreement i made with chairman camp on t.a.a., it extends coverage to workers in the service sector, which makes up 80% of our economy. it wasn't there before, at least not before 2009. extending this coverage means manufacturing workers as well as computer programs and airline maintenance technicians have equal access to the t.a.a. program. it also extends t.a.a. to all workers. current law does not cover eight of our top ten trade partners, including china, japan, korea. our amendment removes this geographic limitation and expands t.a.a.'s benefits to cover trade with all countries. job training is the heart of t.a.a.
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training. this training has a proven track record of providing workers the skills they need to secure their next job, and we know that it works. it works well in my home state of montana and across the country. al dravis worked at a lumber mill in montana. in january, 2009, al was laid off. with a young family, he needed to quickly find a new job, but after he spent months sending his resume around, he realized that he needed to update his skills. if he's going to get a job, he had to get better skills. so what did he do? he signed up for t.a.a. and began training in recreation power equipment repair. following his classroom training, t.a.a. partnered with him, partnered with al and partnered with a local employer, s.&s. sports which specialized in all motor vehicles and jet
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skis that are so important to a lot of people in our country, and they are a lot of fun, i might add. al did such a great job in the t.a.a. job training that the company hired him full time. because of t.a.a. job training, al now has the security and dignity that comes with a full day's work and can continue supporting his family. in addition to providing essential job training, our t.a.a. amendment also helps american workers maintain health insurance for themselves and their families. t.a.a. eligible workers have access to the health coverage tax credits. that provides a 72.5% tax credit subsidy to make health care more affordable. otherwise, they wouldn't have health insurance. with nearly 50 million uninsured americans, this benefit is more important than ever. and finally, the t.a.a. agreement strengthens programs that help american small businesses and small farmers. these programs, t.a.a. for
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farmers, provide targeted, intensive technical assistance to help small businesses and farmers improve their business plans, and they provide seed money to implement those plans. this bill also provides duty-free access to the u.s. market for imported products from certain developing countries, otherwise known as g.s.p. the generalized system of preferences, g.s.p., lowers the costs on inputs for american employers across the united states. american manufacturers use g.s.p. imports -- again, these are imports from developing countries. the tariffs are reduced so that those imports can come in more easily for americans. american manufacturers use g.s.p. imports to build cars, produce steel and manufacture hydropower turbines, for example. since g.s.p. expired last year, american companies have paid nearly $400 million in tariffs
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on these imports. it's been an added cost to american business. $400 million. by reauthorizing and extending g.s.p., we ensure that these workers and workers in 129 countries around the world have the opportunity to earn the dignity of work. so this amendment in short helps save and create american jobs. it helps americans keep their jobs by providing the low-cost inputs that u.s. manufacturers need. it helps americans who lose their jobs. it helps them by getting the skills they need to secure a new job and earn the dignity that work provides. and the amendment is fully offset and doesn't add a dime to our deficit. this amendment invests in america's human resources, just as president roosevelt envisioned. it ensures that our workers are not demoralized by unemployment, and it ensures that they are
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energized by the hope again of standing on their own two feet. i urge my colleagues to support it. mr. president, i yield the floor. mr. sessions: mr. president? the presiding officer: the senator from alabama. mr. sessions: mr. president, i thank the chairman for his hard work on this bill. i have supported him so many times in the past and hope that over the last several years that we have discussed my little problem in haileyville, alabama, that some agreement could be reached, but the trade representative who talks sympathetically and does nothing and the congressional committees seem to be of the view that any change, even though that's what they are empowered to do, is somehow not possible, and we should make changes in our trade laws. so i have objected today to going to this bill because i'd
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like to see some modest changes made in it. we are facing job losses in america, as my colleague has said. more than 25 million americans are unemployed, are underemployed. the unemployment rate remains above 9%, and in my state, alabama, unemployment is now higher than national average. just a few years ago, we were below the national average. in times like these, congress ought to consider options that create a favorable environment for good businesses without adding more to the debt by spending money to try to stimulate an economy. one such measure would be a small change in the generalized system of preferences, g.s.p., which the senate is considering. some background. the g.s.p. was enacted in 1974 to give developing countries


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