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tv   This Is America With Dennis Wholey  WETA  October 3, 2010 10:00am-10:30am EDT

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you say, they're now living in the real world. talk about how you perceive washington. >> ronald reagan talked about washington being an island surrounded by a sea of reality. that is right. the island is it the circumference that is the so- called washington beltway. for the record, i live outside the beltway bond land at george washington used to own. basically, we have a predominance of carrier politicians, people who may or may not have spent much time in at the real world before they entered politics. then they come to washington, which is definitely not the real world, and are just out of touch with reality. i think there is a growing disconnect between those who are our elected representatives and those we represent. >> there something in the book which i found humorous. i think it is jefferson that talk about the congress being made up of lawyers. as i recall, 56% of the people
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in the senate are lawyers. and 37% of the house are lawyers. is that a good thing or a bad thing? >> some people have argued that if we exported half of our lawyers, we would not only help our economy but the balance of trade because we would be better off on the other side. do not get me wrong. they are good lawyers. but the fact of the matter is we need a better cross-section of america. >> people who have been in the trenches and know how to run a business. >> the founding fathers intended for people to come out of the real world, to be able to do short to medium term public service, and then to go back to the real world. that way, you understood more about the world and you're part of the world, and he did not were disconnected. that is not what we have today. >> how much of a financial mess are we in in this country? try to keep the number so i can understand. >> i will do my best. first, obviously, we have huge deficits right now. last year, it was $1.42
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trillion. the president announced for fiscal 2010, it will be $1.60 trillion. $1.30 trillion for next year. the debt right now, the accumulated deficit, if $12.30 trillion. but if you think those numbers are becoming the real problem is that we have unfunde obligationd for medicare and social security. our financial hole is over $60 trillion and growing. >> so does the deficit number and the dead numbered -- am i correct on that? >> the deficit is a one-year number. the debt is a cumulative number. they have a situation where you have other things that are not dead yet, but under our current path, they will be because we need -- we made promises we do not know if we will be able to keep. >> today, it says on the front page, the president has submitted his budget for the
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2011, i guess. >> correct. >> how much did he summit? >> $3.80 trillion. >> in spending. how much are we going to collect in revenues and taxes? >> $2.5 trillion, for a gap of $1.30 trillion. basically, we are going to have to borrow more than one-third of every dollar that we spend. >> ok, so right there is the deficit for this one year. >> it is a pretty big number. >> pretty big number. so you get a budget, and as i gather, 60% is with a call mandatory spending. >> right, autopilot. basically, those are programs that, unless the congress changes the law, you have to pay whatever the bill is. whether it is a benefit like it is under social security or whether it is paying providers for providing services under medicare and medicaid. right now, over 60% of the
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budget is mandatory, on autopilot. here is what is interesting. less than 40% is not on autopilot, and congress has control over it and it includes all these enumerated responsibilities for the federal government. that is what is being squeezed. >> 60% is mandatory. 40% is discretionary. and of the 40%, half goes to the defense budget. >> that is correct. >> so there is not a lot of money to play around with. >> no, there is not. >> about 20%. >> that is correct. in fact, the president has proposed to do a three-year freeze on some less than 20%. while that is a positive step, it is not going to have a significant impact on the deficit problem. we are going to have to make tough choices. >> ok, is also one of the many people, the 300 million people plus in this country, and there's no question that people
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are angry. right? we are all angry. and get hold of today's economy and get into this deficit and this debt. >> people care about two things right now based on public opinion polls overwhelmingly. number one, the economy and jobs. that is number one. and it is understandable that it is number one. and number two, escalating deficits and debt and increasing with foreign lenders to the president has to be able to take steps to try to stimulate the economy, to try to get unemployment down, and he has to put a process in place that will enable us to address the large borrowing structural deficit that will be there, even when we are at peace, even when the economy is growing, and even when unemployment is down. that is the part that is threatening. >> ok, let me take a little break. david walker is our guest. he wrote a terrific book called
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"comeback ameritech: turning the country around and restoring fiscal responsibility." his credentials are amazing. former comptroller general of the united states. former ceo -- to change the name, as a matter of fact, the general accountability office. he is president and ceo of the peter g. peterson foundation. and also, this "come back america." lots to talk about. take a little break. "this is america." "this is america" -- brought to you by -- hyndai motor company -- the national education association, the nation's largest advocate for children and public education.
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the league of arab states, representing 350 million people in 22 member countries. the rotondaro family trust, the ctc foundation, and the american life tv network. >> i should ask you, peter g. peterson, who is that, and what is that all about? >> pete peterson is a first- generation american. he is really a case study in the american dream come true. his parents came here from greece and went to nebraska. that put him through the best schools in the country. he's been a cabinet secretary, a ceo of several enterprises but he is now a billionaire. he was one of the founders of the blackstone group that went public. and he's putting his money where his mouth is by creating this
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peter g. peterson foundation to fight for america's future. >> what is the mission of the foundation? i guess it would be your mission as well. >> to promote federal financial responsibilities. basically, promote more responsibility and accountability today so we can help create more opportunity tomorrow. >> ok. you say that the financial picture of the united states is humorous and does not need just a nip and a tuck. it needs major reconstructive surgery. i want to walk through the three big items. i want to work through social security, taxes, and also health care. because those are the big ones. going back words, lincoln taxed people to support the civil war. >> yes, and then we came out of the tax. in 1913, we got the modern
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income tax and the federal reserve. >> so 1913 is taxes. 1935, social security. in 1965, under johnson, was health care, medicare and medicaid. ok. if you go back and look as social security, if i read things correctly, 35% of the people who retire live on social security. is that correct? >> primarily. 22% of americans rely on social security exclusively, and it was never intended to be that way, but that is the way it is. >> in the boat, the chapter heading, save social security. how're you going to save it, because you have all this money obligated to pay lots of folks were long time to come? >> the good news is, social security, in basketball terms, is a lay up. you can miss it, but it is a pretty high percentage shot. we can exceed the expectations for every generation. for people right out of
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retirement, you'll make little to no changes because they do not have time to make adjustments. the younger york, the better off you are financially, the more you'll be affected. gradually increase in normal and early-retirement age and the index of the life expectancies, gradually. we will strengthen the benefit for people near the poverty level, provides a much less of a replacement rate for middle and upper income, and you can solve the financing without raising taxes. but a political deal may require you to raise the taxable wage base cap. if you end up doing that, it is a program that is solvent, sustainable, and secure. everybody gets more than they think they're going to get, not more than promised, but more than they think they're going to get. and on top, let's add a automatic savings account to help to the savings rate up and have a supplemental retirement benefit. that would be progress. >> a lot of folks, we have kind
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of a bad savings rate in america. traditionally. and we're a consumer-driven society. we buy things. but i think that like the $4 a gallon gasoline, this deficit business has caused people to all of the seven states -- whoa, you know, this party is not going to last forever. so the savings rates are going up. >> people are scared and concern. americans are head of elected officials. there moderating spending in moderating taking on debt. they're starting to save more. our savings rate is still too low. but it is a lot better than zero or negative, which is where we were for a certain time span. >> i think this would apply to who be a lot of folks or are working in the television facility here. and that is maybe the two -- the 3% of each check to go into an automatic savings account.
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talk a little bit about that. a lot of people would say that i am living paycheck to paycheck as it is, but 3% is not a bad idea. >> it is not a lot of money. my mother taught me a lot of great things. she says once you touch the money, you'll spend it. in america, they spend it multiple times. so if we can take 2% or 3% right off the top, you do not touch it, and it goes into a real trust fund with a real investment and real liabilities, not one of these trust the government funds were a lot got a long time ago. that way, people can have something for retirement. they can also understand that the miracle of compounding and have an investment in america's future as well as their own future. >> so you're saying the social security benefits will be there. >> they will be there. >> but you also put on the table that probably when nobody's looking, because that is the way it will have to happen -- i do not really mean that to be
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truthful. but if you change the age in which people collect the social security, is not all hell going to break loose? >> we need to do it for several reasons and not just a fiscal reasons or for finances. we need to bid for work force reasons. we're starting to experience slower on work-force growth. we're now in a service-based economy, not the industrial age. it is brain power of the broad power that drives our economy. we need to encourage people to work longer to fuel economic growth. they will have an ability to work longer because the nature of what work is. plus, people are living longer and staying healthier longer. for all those reasons and more, we need to do that. >> let's talk about health care. you say that it costs too much and what we get is poor, not up to standard. and you can compare that with other countries around the world. this was the statistic which at that was fascinating. 27% of the people are either on
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medicare, medicaid, or some kind of military health plan or something. that is a lot of people, almost 30%. talk a little bit about your wife, mary. she had an auto accident, fainted. and what happened as far as trying to get hurt well. >> under our current health care system, it is a fee-for-service system, so the more that you do, the more you get paid. the more you do, the less likely you'll get sick because you did not use in the year should have done. she ended up having a battery of tests, about $20,000 worth of tests. >> $20,000 worth of tests. >> and they never did find out what caused her to faint, if you will. i went to one of her last appointments and said, doctor, why are you recommending for these things to be done, and he said it is because these are the only other things i can think of. i asked how much it would cost,
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and he said i do not know when you should not care because your insurance company will pay. >> that is it right there. >> that is what i said. i said, doctor, you do not seem to understand how insurance works. they paid for it today, we pay for it later. >> in the premiums and things like that. and a lot of people -- well, let's not go down that avenue quite yet. do we have to change that fee- for-service is business? how was i going to work though? >> we have to do several things. first, we're the only major industrialized nation in the world does not have a budget to spend on health care. otherwise, it would bankrupt the country >> so it is just a check. >> we write a blank check. >> it is like to focus on the $20,000. but if he had stopped at $10,000 worth of tests -- >> he could have said, let's look at the evidence, and what does the evidence says more likely to be predicted or not? we have a certain amount of
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money, so let's do the things that are likely to be the most beneficial, the most value for the money. you and i and our employers should be able to spend whatever they want, but the question is, is the difference between us spending our own money, either directly or through compensation, and how much the taxpayers are going to spend and there is a limited amount of taxpayer funds. >> so you are saying that what we should guarantee under these plans are when his basic and what is essential. what i argue is we should have universal health care coverage in this country. but we need to the public discussion and debate about what level of coverage is appropriate, affordable, sustainable. >> what is that always got so much trouble? >> because people would rather have everything today and not have to pay for it tomorrow or ever. the system does not work that way. we have a wimpy public policy. i will gladly pay you tuesday
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for a tax cut or spending increase or an entitlement today. >> what is the thing that just happened in oregon, where there were coming along and they said they were going to cut school time are cut to four days a week, and all of the sudden, the people voted that they would spend more money in taxes, they would be ok with that. >> but there are two systems in this country where we spend double per person, and we get below average results. and those are health care and k- 12 education. the problem is not whether or not we're spending enough money. we're spending twice as much as any other industrialized nation person. and the system is badly broken. if anything, our students need to be in school longer. they also need to be instructed differently. we need to make sure we have teachers that are knowledgeable in the subject they are teaching, and we should have paid for performance. >> let's talk a little bit about
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taxes. as i recall, 40% of the people do not pay taxes. >> over 40%, headed to over 50% +. no, they do not pay income tax. they do pay payroll tax. but here is the key. that 40%, to be 50%, they do not pay income taxes. they fund the constitutional roles for the federal government. even though they pay payroll taxes, those are not adequate to fund the programs that they are related to. >> add another statistic. 69% of the people are paying in their payroll taxes and their income taxes. they are paying more than they're taking home almost. i am off on that one. but help me out. >> most americans pay more in payroll taxes than they do income taxes. and the total tax code is shared by a fairly small percentage of
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americans. we really do have a progressive tax structure when you look at it on a consolidated basis. here is the other issue. we're not generating enough revenues to pay our bills now. >> no, that is what we started off by saying, we're going to be $1 trillion in the hole, and it is going to get worse. >> so we have to figure out what government should be doing, how it should do it, how we measure success, and how we're going to finance it. we have to reconcile what people want but what we can afford. >> i do not want to play politics, but were the bush tax cuts a good idea when you take a look at it? because he rides in, and clinton has a little bit of a surplus, doesn't he? then you have a republican congress and republican president, and they are supposed to be the people who are into fiscal responsibility. what went wrong there? >> well, there's no party of fiscal responsibility today. >> but that is what they say. small government, fiscal responsibility. >> they are not always as
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advertised. actions speak louder than words. >> you want to make the tax system more simple and more fair. but obama is not right either when he says we're going to be more programs and only tax the rich. that is not a fair thing to say. >> there's a new four-letter word in washington, and that word is math. we're not top 25 in the world in high-school in math, and we're not top 100 and washington. the fact is, the president made a promise that he was not going to raise taxes on people making less than $250,000. he should have never made it. just like george bush won. >> george bush won. >> and clinton. president obama will have to put a page out of that but. but spending is out of control. >> dysfunctional democracy? >> yes. >> all right. you are a father, grandfather. let's say there is a child that is 10 years old.
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and it is 2010. so he will be 30 years old in 200030. >> that is correct. >> 2010. >> it will be 20 more years. >> yeah, so he is going to be 30 years old. what is his tax burden going to be or her tax burden going to be at that point if we continue to spend in this or reckless manner that we're spending? >> between 2013 and 2014, the federal tax burden alone will double. >> will double? >> will double, if we wait until then to make the tough choices. here is the problem. we will never get there. our foreign lenders will not lend us the amount of money that we're going to have to borrow at reasonable interest rates. my view is we have less than five years to be able to demonstrate that we're going to get serious. i actually believe less than two, to demonstrate we're going
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to get serious and take steps to put our federal finances in order. or else we're going to have a super subprime crisis. >> on a personal and professional level, when you put all this together, what is the biggest lesson you have learned? >> well, everybody wants whenever the wind today, but they do not want to have to pay for it tomorrow. we have a societal problem. in the late 1970's and early 1980's, too many americans became addicted to conspicuous consumption and debt. here is the good news, americans now know that too big to fail is a false premise. they know if you spend more than make and take on too much debt that the bubble can burst. they saw happen in the private sector. they know it can happen in government. we must not let it happen. but our politicians do not want to make tough choices. we cannot afford to wait for a crisis because it would be mighty ugly for america and for americans. >> hmm, "come back to america." you have three things that jump
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out at me. you need a plan. you have to get the citizens involved. and you're even toying around with the idea of calling some kind of constitutional convention. put all those things together and talk about that for a little bit. why is the plan necessary, and how are you going to get people involved? >> you have to have two things. you have a good ideas from a policy standpoint. and you have to have processes that will get a chance for those good ideas to become a reality. on the fiscal front, the president has called for presidential commission to look a statutory budget control, social security, health care, and tax reform. and he is right. >> bipartisan, lots of people. >> we need nonpartisan solutions and bipartisan support. they must engage with people outside the beltway. secondly, then we have to lick at baseline the government. -- then we have to look at
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baselining government with a special process. third, we have a dysfunctional democracy. we have a public that is not representative of the public. we have to make reforms in our redistricting system, campaign finance laws, and considered term limits but if we might have to have a constitutional convention, unless we can get congress to act without one. >> "come back america," are you optimistic? >> i am in america. if this book is about solutions with policy and processes. we have to get on with it. 2010 as a critical year. >> our standing in the world is, if china are other states angry with us, we're under their leverage. we do not have the leverage we used to have. >> you have to pay attention to your foreign bankers. the american taxpayers now have
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guaranteed $5 trillion in fannie mae and freddie mac debt because foreign investors abandon them. >> "comeback america," david walker. we will put up on the screen an e-mail and web address that you can get in touch with the people at the peter g. peterson foundation. >> thank you. nice being with you. >> thank you. >> for online video of all "this is america" programs, visit our website, thisisamerica.net. captioned by the national captioning institute --www.ncicap.org-- >> "this is america" -- brought to you by -- hyndai motor america -- the national education association, the nation's largest advocate for children and public education. the league of arab states, >>
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for online video of all "this is america" programs, visit our website, thisisamerica.net. representing 350 million people in 22 member countries. -- representing 350 million people in 22 member countries. the rotondaro family trust, the ctc foundation, and the american life tv network. ♪
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coming up, clergy love their work, but it can come at a cost. also the strain and the satisfaction of becoming a caretaker for someone you love. >> this is the deal you made when you got married. the deal was to be there for
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