Transcripts For CSPAN Public Affairs 20130924

10year budget window where people say the problem is about a 4 trillion or 5 trillion problem. That maybe stabilizes the debt over the next 10 years, what happens in the 11, 12, and beyond . I got white hair. 30 years to you seems like a long time, its not. The time to address these challenges is now, but you have to do it with real information. Its a fiscal problem. You have to look at numbers. I realize peoples eyes glaze over real quick when you talk about numbers rbling but thats what we need to grapple with. Whats the numerical problem, and whats the numerical parts of the solution. Host heres james from caramel, yip, democrats line. Caller good morning, senator. I have a question about the Health Care System. That you want to repeal. We need a Health Care System. I remember in the 1960s when my wife had Insurance Plan and i had an Insurance Plan, its like we both owned Insurance Plans separately, but they covered each other of us. So its just like you buy two products and you get two items for it. Well, they used to pay double if we had 1,000 instance, we get 2,000 from our insurance company. Well, the Insurance Companies finally found out there is a way to get together and stop that and they did. Now even though we pay for two plans, we only get the service of one and 20 or Something Like that. What i have seen Health Design and declean, we have had cancer now and its going to be harder for me to get Health Care Insurance in the future. Everybody wants to repeal obamacare because its not a good plan. I would like you guys, in the senate, in the congress, to come up with a better plan and replace obamacare rather than repeal it. We need something. Im tired of going to the emergency room i see hundreds of people in there just going in there for common doctor appointments that have no insurance, that will never pay. Lot of them are illegals. They dont turn them away. They raise the cost of my insurance. Host thank you. Guest theres an awful lot of cost shifting. You mentioned the 1960s. What happened in the 1960s . We instituted medicare. When they initially passed medicare, they projected out 25 years and said medicare would cost 12 billion in 1990. It ended up costing 109 billion. Almost 10250eu78s the original timate 10 times the original estimate. It has driven up private insurance. We are subsidizing the government care within medicare. To me thats part of the root cause of the problem. Instead of increasing governments involvement in health care, lets start decreasing it over time. Put ourselves on a path, recognizing this is the system we have. Over time recognize that the only way you truly contain costs, the only way you truly improve quality and customer service, is through that free market system where individuals are in greater control of their own health care spending. Its a shame about obamacare from my standpoint. I provide health care for 31 years. Over the last three years of my involvement in my business we shifted to high deductible plans to reduce premiums. I didnt pocket those savings. I invested them in h. S. A. s. Within three years every one of the people who worked with me had 5,000 that was their honey in their h. S. A. Account to pay for those first dollar coverages. This is how the marketplace responded to that. Because of h. S. A. s, you had walgreens, walmart, c. V. S. Develop walk did in clinics, staffed by nurse practitioners. Sort of the first step in triage of medical care. Instead of as a parent taking your iled child to an emergency room, they are clogged. Now the marketplace gave you an option to go into walmart, rather than pay 200 for an midgecy room visit, get your kids ear infection diagnosed for 35. The free market is a marvel. It works well. We need to rely more on that type of freedom in the free market system rather than look to the federal government to solve the problem. Look how much harm they have done to our Health Care System since the 1960s. We want to provide a Strong Social safety net. We want to make sure elderly individuals have good Quality Health care. We are not going to have that system if government takes it over. We would be far better off if more individuals take consumer choices. Host whats the timetable you expect starting wednesday as far as a vote is concerned . Guest nobody knows. Thats the problem. Coming from the private sector it drives me nuts the utter dysfunction of this place thats not only september 30 is a surprise. I was talking to my colleagues about lets get a c. R. Passed before we left on august break. If you want to deFund Obamacare, lets do it, throw it on there, lets debate it. Lets have that discussion. Lets be prepared to in the end negotiate and compromise so we dont threaten a Government Shutdown. Thats not what we are in. Maybe the thing to do is pass a couple shortterm c. R. s from my standpoint. I like to work with people across the aisle. Lets fund the things we agree on. Lets get that done. Lets get this big shutdown off the table. If there are things we disagree about, lets leave that. That will be a small part of that budget. It would be far better than playing this brinksmanship. Host senator ron jon republican from wisconsin. Thanks for your time. Senator ron johnson is a member of the budget committee. He and his colleagues will be gathering on delill chill for a hearing looking at the possible effects of a Government Shutdown on american jobs and the economy. Among the witnesses is mark zandi, panel will start at 2 30 eastern live here on cspan. The senate is in recess right now after earlier today confirming todd hughs to be u. S. Court of appeals judge for the federal circuit. The vote was unanimous, 9le0. The senate is now in recess until 2 15. Just before they gavel back in, we are expecting comments and reaction following their meeting and then it will be back to work on temporary spending legislation. The first test vote on the bill is set for tomorrow. And you can see the senate live when they gavel back in at 2 15 eastern on our companion network, cspan2. Remarks now from virginia democratic congressman james moran. He joined us this morning to talk about the congressional ebate on the federal budget. Host joining us now is democratic representative serving the eighth district which includes arlington, compearna, and falls church. Welcome. Give us your thoughts on whether you think a shutdown will happen or not . Guest i do not think a shutdown will occur as of october 1, but if the continuing resolution to continue funding government for the next 45 days is not resolved by november 15, i think there is a higher likelihood we could have a Government Shutdown then because there is a confluence of the need to fund the government as well as the need to raise the ebt ceiling. Both of those will come due by then, and right now we do not have a plan to get us beyond that point of contention. I would not be at all surprised if there is a Government Shutdown before the end of the calendar year. Host if the senate sends back a clean bill to the house, are there any indications as to what Speaker John Boehner will o . Guest i think he will turn to the democrats to get him the votes to get it past the white house has indicated they would sign a clean bill for a short ime. Now, that level of funding and you dollars that level of funding is going to be in a hundred 80 total. 988 billion dollars total. All a 21 billion reduction all of which comes from the Defense Department because the sequester is a calendar year. It begins january 15. I think the white house figures it has 15. A level by mid november or mid december to get a deal that will not only raise the debt ceiling until the end of 2014, but would also keep the government funded and perhaps shelf the whole idea of the sequester. Host what does that 900 900plus figure do as far as how the government operates . Guest it is still invasive financial reduction. The 960 7 billion is almost a drastic cut to the defense establishment, not only contractors, but federal employees. A number of our weapons programs and intelligence and Technology Programs within the defense epartment. I expect a whole 21 billion in the final analysis will not all be taken from defense. Is the discretionary programs that have taken all of the reductions since last january. The increase in spending is actually occurring in the nondiscretionary programs, the socalled mandatory entitlement rograms. That is where the money is going, yet cuts are coming in he discretionary area. Of course, that is really what provides the secord in the uture. In terms of education, research, infrastructure, National Security, all of those programs that we think of as the government, but thats where we have taken the cuts. Thats where well continue to take the cuts unless we resolve this sequester which no one wanted. Frankly, unless we put more revenue on the table, as well as reforms to entitlement rograms. Host you serve arlington, alexandria, falls church how is that area affected by sequester . Guest we are affected as much as any part of the country. It is part of the washington metro area. I have tens of thousands of federal employees, and even more people that are on contract with the federal government in defense and every other iscretionary agency. So, it would severely impact our economy and the lives of our citizens. It needs to be avoided, but the sequester, unfortunately, is death by 1000 cuts over the next eight years. Frankly, its a brief Government Shutdown was to resolve result in a its a brief Government Shutdown was to result in resolving the sequester, it would be worth t. Host you can reach out to us on our twitter page and send us email. What should be done about the debt limit . Guest the debt limit should be abolished. Denmark is the only other country you visit. Country that uses it. It is to decide whether or not we will pay the bills that are already do. If we do not want to incur the debt, we should not authorize programs, but this is after the fact. This is to say those treasury bills, notes, and bonds that are outstanding, are we going to pay interest on them, are we going to pay them when they are due . Thats what anyone does. To default on the debt is unthinkable. The fact that members of Congress Take this in a cavalier way is astounding. The debt limit was raised 17 times under president reagans term, who seems to be there theological hero. The idea that they would hold the government hostage and jeopardize the currency system for the whole world the dollar is the most stable currency. They could shake up International Financial markets in a way that would produce chaos and suffer substantial losses to not only the American Economy, but economies all over the world. Obviously, we are interdependent now in a Global Economy, and we are dependent on a stable economy in the United States, and certainly a stable urrency. This would introduce the kind of instability that could have longterm damages. So, even the thought of it destabilizes International Financial markets. Certainly, if we delayed paying our debt, it is almost inconceivable. No matter how irresponsible the congress has shown itself to be, i cannot believe that it could possibly be that irresponsible. Host our guest joining us until 9 15 a. M. The first call is from albany, georgia. Ohnny. Caller i am just calling to say if we change the name of obamacare to some caucasian senators name, it would go through with ease. It to republicans are so determined to shut the government down to keep a black mans name from being on legislation, shut it down. It would be the weakness of the democratic government to stand by and allow the republicans to press their will on the country like they are doing it. Let it shut down. Do not argue with them. Guest i appreciate your thoughts and perspectives, sir, but if we shut it down, a lot of people will suffer. Head start families will not be able to go to school. Social security benefit applicants will not be able to have their Social Security applications process. The same thing for the veterans dministration. National parks will be closed. There will be real suffering across the board if we were to shut down the government. We would realize the role that the government plays in our lives in a beneficial way. With regard to obamacare, president obama had some issues with calling it obamacare initially, and i think he realized it was going to be his legacy. It is the law. It is going to continue to be the law. It is going to be implemented, and over the long run i think president obama is going to take pride when it is implemented and the cost of health care goes down, insurance rates go down as well, and where when people do not suffer because they do not have affordable, accessible insurance available to them. Host rosemary from rome, georgia. Republican line. Guest caller two quick points. Clearly it is senator harry reid threatening the shutdown to make political points, and one part of the process is a supported supposed shutdown could have been avoided if this was worked out in july and august instead of taking six weeks off in august and part of september nstead of working. Whether republican or democrat, we are paying you to work, and that is what we expect. Thank you. Guest well, we did work through july. I agree with you with regard to august. Of course, i live not far from the capital, so it is easy for me to say. I generally work anyways when we and my staff works even harder district work periods. The congress doesnt take the time off. They are back in their districts listening to their constituents. The problem is we have not done anything when we have been in session. We will go back into session tomorrow, wednesday, but on the house, we will have to wait for the senate to act. With regard to senator harry eid, he made it clear that the house version of the continuing resolution is not going to pass because obamacare is not going to be repealed, but he is going to put forth a continuing resolution that will be signed y the president. So, i do not know why you have decided that senator harry reid is at fault. He wants to put forward legislation that has a chance of passage, and that is what we are all supposed to be doing. Host our previous guest said the law was not ready, and there is a front page story on usa today on what they describe as a glitch that could leave some kids out of it. Is it ready . Should there be a pause to maybe think some of these things before the full rollout happens . Guest we have to look at the history of other such rollouts of large programs. With regard to medicare, there was a great deal of resistance from the Republican Party in 965. In fact, there were some glitches after it went into effect. You do not know what the glitches will be until after it goes into effect, and there were refinements to the program that took place over months and years to the point where people on medicare want to keep their medicare, are loath to anyone that wants to take it away from hem. I think we will see a similar thing with the Affordable Care act. There are glitches in legislation and regulations that will begin implementation. I think this particular issue hat denied some people affordable coverage is because the law applied to individuals that are working, but did not specifically identify their families. So, there are some children of people who would be covered by employers that might not be included. We can fix that, and i would hope we could do so in a bipartisan basis. Host was it a good decision to delay the employer mandate . Guest i do not think it matters a whole lot. I just assumed we had not elated. I think it would delayed it. I think there would have been glitches there as well, but there was pressure to do so and so many things to do by october 1 and the implementation by next year, i think the administration said we do not need the employer mandate immediately. So, he really does not matter a lot in the long run. Host donis from romney, west virginia. Republican line. Caller good morning. My comment is my Health Insurance, we have been notified in west virginia, that it could increase as much as 50 . I believe that the republicans re going to let this bill take effect, and by june of next summer you will see an outraged public across this country because they will hit him so hard in their pocket books. Congressman moran, im wondering if the Democratic Party has any plans for this outraged ublic . My mother manages a business in winchester, virginia, and they are beside themselves. He did not know how they will afford all of this expense. It is concerning that congress can not discuss things instead of having a person like harry reid telling everyone the way it is going to be here and i will like to see more cooperation on both sides of the fence. Thank you for listening to my complaint. Guest thank you, sir. I, too, would like to see more cooperation on both sides of the fence. Do not believe you will see the increases in insurance premiums that have been suggested by Insurance Companies and brokers. People do not know what they will be paying because the exchanges will not be set up, and then you could compare what you choose to pay and what coverage you want to the benefit of competition. You will have several plans. It was planned to be more comprehensive. The prices so far, across the country, have been significantly less than anyone anticipated. Ealth care inflation, in fact, has been less than it had been before obamacare was legislated. Insurance companies are limited to not taking more than 20 off of the top for their own urposes. 80 has to go into health care. We are going to bring in the socalled free riders who do not have insurance and go to the emergency room when they need health care. That is the most expensive type of care possible. We all pay for that in higher insurance premiums. That is not going to happen. There are going to be any number any number of preventive programs that will be free to people and we know that will save tens of billions in the long run in terms of reduced illness. In the long one, i think we are going to come more in line with other countries that spend half as much as we do, live longer nd live healthier lives. Host george is from fairmont, west virginia. Democrats line. Good morning. Caller good morning. Good morning. My senator is mr. Mansion, and i have a couple of things here. If the government is shut down, why are the democrats continuing to scare the elder people that theyre not going to get Social Security checks . That money comes out of people that are working every day of the year, and every paycheck takes Social Security out and that goes into Social Security. That is not part of the budget. Social security is not part of the budget. Why are you trying to tell people it is in the budget . It is not in the budget. It is a separate account like our savings account. The government should not be able to go in there. If they do, they should go into prison, just like anyone else who went into someones bank account. As far as health care, when it was first brought out, the Democratic Party did not put this on the table for everyone to see including both parties on both sides. They did everything behind closed doors, and nancy pelosi even came out on national tv and said lets pass the bill first and then we will read it and see what is in it. How can you pass bills like that . Host thank you. Guest do you have many many republicans that call on the democratic line . Host we get all kinds of colors. Guest i bet you do all kinds of callers. Guest i bet you do, and this is one of them. I do not think we are scaring people about the loss of Social Security benefits, and i certainly did not suggest that is going to be the case for current beneficiaries. Current beneficiaries will continue to get their check. Social security is paid for by discretionary funds. People that are eligible because they turn 65, if the government were shot down, you would not have your claims processed, so it could affect a new beneficiaries, and it could have other longterm consequences as the program does have to operate with personnel that are paid for out of the general fund in the labor, health, and Human Services appropriation bill, and that has not been passed. That is part of the continuing resolution. In terms of your other things, i have heard those talking points, and i think some of that was more rhetorical than asking a question, as we obviously have some difference of opinion on the politics and the policy behind the Affordable Care act. Host wesley. Wesley chapel florida, independent line. This is kathy. Caller how is the medicaid going to be handled for all of these people that were encouraged to sign up on october 1 . The parents were filmed under by thumbed under by Michelle Obama . Who is going to pay those remiums . If they do not have the money to buy insurance now, how are they going to pay for it . Explain medicaid. Guest first, you said edicare. Medicare is going to continue to operate the way it is. And it really is not significantly affected by the Affordable Care act. In terms of medicaid, that is a program for lower income eople. 70 of medicaid money is spent on longterm care in nursing homes. A lot of middleclass families, for example, will do what is called spin down is so that they are financially eligible to put their grandparents in a nursing home. That will be paid for out of medicaid. Medicaid is a joint, federal, and state program. In some states the government pays 50 . In new york, massachusetts and northeastern states. In the southern states, the federal government pays a much higher proportion of the cost of edicaid. It is determined in that fashion. Now, in some states are going to are going to take advantage of the expansion of the healthcare overage. They will pay 100 the federal government will pay 100 of the cost. Many states have rejected that. My own state of virginia, for example, has rejected that, so there would be 400,000 people eligible for medicaid, single people with less income than 12,000, for our family of four, it would be less than 32,000. States that have opted in will include as many people as are eligible, and in many cases that is hundreds of thousands of new people in what is funded jointly by the federal and state government. Of course, those are folks that i referred to previously. It is because you are poor and do not have insurance does not mean you do not need and cannot get adequate care, and, other people pay for it, and they generally pay the most expensive show nimaginable. Now theyll get Preventive Care and hopefully drive the cost of health care nationwide down significantly. Host bill bennett in the washington journal wrote this for the car out word carve out portion, what were your houghts . Guest at this point in time, members and their immediate staff are not exempted. They are under the exchanges in their individual states. Now, host they get a subsidy assistance now or do they not . Guest they do now. They get less than large corporations. The federal government divides federal employees Health Benefits. On average, the employer pays 72 . The employee pays 28 . That is a little less than most corporations provide in terms of the proportion of the employer benefit. The thinking was, as is the case in the private sector, you continue to offer Insurance Plans that are working. This is an Insurance Plan that is not broken, so people would suggest why should we be trying to fix it because the employer contribution is not out of line with the private sector. Nevertheless, members and their immediate staff will have to go into the exchanges just because of questions like this why are you exempting yourself . Of course, the congress was not planning to exempt itself because it has insurance now and a plan that works. Ome of the people on the committees, they will keep their federal employees Health Benefits plan. It is just the members that are carved out for exceptional treatment in that they will not be able to keep the current land. They will have to change it current plan. They will have to change it and go into the exchanges as if they did not have insurance. Host fred. Kentucky. Republican line. Good morning. Go ahead. Caller yes, my question is this, as little as 20 years ago, budget , our budgets was where we could afford to give in excess we had some moneys left over out of our pocket my question to the gentleman we appreciate your service also to our country, is this, what amount of our budget do we give away to other countries . In other words, i cant go down the street now because of the amount of retirement that i get and get to my neighbors like i used to be able to. So how can we continue to give our budget money or money that we have borrowed to other countries Carte Blanche . I heard a big of 1 billion given to a country the other day. Are we going to stop giving that to them because they did something . My question to you is, when do we stop giving all of our money away to other countries and start giving it to ourself and helping ourselves so that we can continue to help other countries later on and get our economy back on its feet . Thank you. Guest well, thank you for the question. That spending comes under the foreign operations appropriation bill. Its one of the smallest of all f the appropriation bills. In terms of giving money, we do provide over 3 billion each year to for aid to israel. Thats exempt from the see questionser. We also provide about half of that amount to egypt as part of an agreement made between egypt and israel to maintain peace in that part of the world. And its likely that egypt will continue to get its money. In terms of money that goes to other countries, theres not a whole lot of assistance, and that assistance has been cut back subtanksly because of the su sanctionly because of the sequester because those are considered multilateral contributions to International Organizations were cut substantially in the foreign operations appropriations bill. So if youre concerned about that, you should appreciate the cuts that have been made. Now, there is other assistance that goes out under the Defense Department, but thats related to military conflicts. We obviously have provided over 1 trillion to iraq, for example, and some of that is in rebuilding. Ultimately well probably provide almost as much to afghanistan. We still got troops in afghanistan. Unlike iraq. Then there are other conflicts around the world that we are trying to address. But thats in a different budget and thats probably not what you were talking about. You were talking about foreign aid. Its been cut significantly and most countries dont get a whole lot of assistance from the u. S. Government anymore. Host our guest is the Senior Member of the Appropriations Committee. Hes representative jim moran of virginia. Serves the Democratic Party, serves the eighth district, arlington, alexandria, and falls church. There was an oped in politico, by david price, also a member of the Appropriations Committee. Twilight of appropriations. He writes this. Guest david is a close presented and he is 100 correct. I couldnt agree with him more. We discussed the column that he wrote and i appreciate the fact that he wrote it. I wish everyone would read it. Host as far as the process, though, does guest the process isnt working. Host future acts and motions by the Appropriations Committee . Guest the Appropriations Committee is what funds the government. And the constitution gave the legislative branch the power of the purse. And that power is exercised through the Appropriations Committee. But in recent years the Appropriations Committee has been stymied in its ability to perform its work. It used to be a bipartisan function. We used to be able to get our bills passed on time. We would work within the confines of the revenue that was coming in. Back in as recently as 2000, we had a surplus of projected 5. Of frill 5. 6 trillion. Two tax cuts were passed, 2001 and 2003, all of those were deficit financed. Then we started a war of choice in iraq and another war in afghanistan. None of those were ever paid for. E expanded part d of medicare. And then we had financial implosion, largely due to deregulation of the financial industry. So now we are in the situation where we have seen about a 10 trillion fiscal reversal instead of the deficit surplus, we have a deficit that as far as the eye can see. But its because we took so much revenue off the table without ever paying for it, and we started wars that we have chosen not to pay for, and the babyboom generation, my generation, is taking down more money from medicare than on average its ever paid into the program. Plus the expansion of Social Security. About 10,000 new baby boomers join the rolls every day. There will be about 77 million who will be living longer, living better than any previous generation. Some of whom will absolutely need Social Security, which is about 1,200 a month on average. Others dont need it. Some who are absolutely desperate for the health care that medicare provides. Others dont need it. But the fact everybody gets it and this country cant afford that unless we anything out a way to bring additional revenue into the picture. And until we do, its the discretionary programs that the Appropriations Committee discretionary programs that the Appropriations Committee will cut. Thats the n. I. H. Research, roads, bridges, and transit. And thats our educational system. Thats our research and innovation. Thats our National Security. And thats our domestic law enforcement. Thats whats being cut. Host here is melvin from temple hills, maryland. Democrats line. Caller one thing, i just wonder why no one is upset and got upset when the Prescription Drug program had those major problems when they had the doughnut hole that a Senior Citizens couldnt pay for a prescription. That didnt get worked out until the health care program. In addition to that, i find it strange that the senator prior to representative moran, johnson, indicated that it may be good for walmart to open up some Health Care Centers. They are not already doing creating a lot of problems for Small Businesses in the community. Walmart, you have three of the people most ridged people in the world, now talking about giving them additional business by them opening up their own Health Care Centers to look at people with minor illnesses and that rather than pushing the Health Centers that obamacare is supposed to set up. I find theres a lot of things to mention walmart. One of the biggest problems they had and dealing with a lot of the Small Businesses and taking the businesses away. Guest thank you for your comments, sir. Holeregard to the doughnut in the Medicare Part d Prescription Drug program, that will be closed under obamacare. I might as well call it obamacare, since everybody else does. With regard to walmart, you mentioned it is true that the walmart family alone has more income than 30 of the entire american population, more than 30 million working Families Together dont earn as much money as the walmart family alone makes out of this economy. But thats not to say that walmart doesnt provide affordable goods and services. And the extent to which they are willing to provide insurance to their employees and services, i would assume thats a good thing generally speaking. Host he says the u. S. House controls the entire government. Get used to it. Guest thats not true. The u. S. House hasnt done much of anything in the last four years, certainly. The last term the thanks primarily to the u. S. House, less legislation was passed than at any time since world war ii. And in this current term, we have passed less than half of what we did in the last term. The u. S. House is largely dysfunctional. And i dont believe that its serving the short or longterm needs of the American People in terms of controlling it. Yeah, they can make things difficult. You can keep many digging holes in the road, but eventually we are going to move on. Its just a matter of time before the u. S. House is replaced with people who believe in getting things done. Host juneau from florida, independent line. Caller hello. How you doing today, representative james moran. This is gino. Hi a couple questions about whats recently going around on youtube and most of the conspiracywide internet websites. As a young individual, im 21 years of age, and it came to me as kind of a shock that a lot of people are talking about which are currently representatives of the government, who are supposed bohemian recipients, how do you feel as a representative that our country is run by the same people that are in a group that, as was adolf hitler, as was many im not going to say name by name, but research i found out on my own, our government is not its just confusing me as a young kid in florida struggling to provide for myself and my girlfriend. I guest i would suggest you might want to broaden your research somewhat, sir. Im not sure i can follow all of the conclusions of your research. But even though im disappointed with the u. S. House majority, of course obviously when i gave the last pejorative comments i was talking about the Republican Leadership in the house, which has not been very successful in getting the work of the people accomplished, but i certainly dont think that they are following any path of some of he worst people in world history. These are people who are trying to carry out the wishes of their constituents. They have an ideology i dont happen to agree with, but they are working within the democratic system. Some of them are quite intelligent. Most are quite committed to their objectives. And most are fairly transparent in what they want to accomplish. Far different from any kind of dictatorial system. Again i dont know where youre going to school or what sources of research you are using, but you might want to look at some alternative views of history and current events. Host a story on politico saying the House Minority leader is spearheading a plan to advance a comprehensive immigration bill and the chamber saying it would introduce legislation combining the comprehensive bill that passed the Senate Judiciary committee and made with a bipartisan security plan in the House Homeland Security committee. Any addon to that . Have you heard about this . Guest i hope we can get some form of imgration Immigration Reform passed. Im not optimistic. But its possible if we could get a bill that would come through the house. Even if it was just to authorize the socalled dream act. Children who were brought here not making any decision of their own. Students should they be able to afford higher education, isnt that in our nations economic interest . Something like that. If we could get some bill no matter how limited passthrough the house, then it would go over to the senate where we would go into conference. And the conference is going to write the bill. The conference between the house and senate. Id love to see that done. I doubt that it will be. But anythings possible. And if we can get comprehensive Immigration Reform, it would be a good thing for our economy and society. Host representative jim moran of virginia, member of the Appropriations Committee, also serves the eighth district. Hanks for your time. The attack left 240 casualties. Including 61 dead civilians and six of his security forces. He said five terrorists were killed and another 11 suspects have been taken into cussed toy. He also declared three days of national mourning. Terrorism was one of the topics president obama touched on this morning during his remarks to the u. N. General Assembly Meeting in new york today. The president has also directed secretary of state john kerry to pursue a Nuclear Weapons agreement with iran and say he firmly believes the diplomatic path must be tested. The president told the United Nations General Assembly today hes encouraged that iranian president is pursuing a more derate course, but he said rouhanis words have to be transparent and verifiable. Irans new president will be speaking to the United Nations General Assembly this afternoon around 4 00 p. M. Eastern. We plan live coverage here on cspan. We have president obamas remarks coming up in just a moment. Very quickly a reminder that we are going to be taking you live at 2 30 eastern to capitol hill for hearing by the Senate Budget committee on the possible effects of the Government Shutdown and american jobs and the economy. A number of economists scheduled to tefment among them mark zandi of moodys. That starts at 2 30 eastern live on cspan. Now president obama and his speech earlier today tot u. N. General assembly in new york. Focusing on peace efforts and the situation in syria, among other topics. The assembly will now hear an address by his excellency, barack obama, president of the United States of america. I request protocol to escort his excellency. On behalf of the General Assembly, i have the honor to welcome to the United Nations his excellency, barack obama, president of the United States of america, and invite him to address the assembly. Mr. President. Mr. President , mr. Secretarygeneral, fellow delegates, ladies and gentlemen, each year we come together to reaffirm the founding vision of this institution. For most of recorded history, individual aspirations were subject to the whims of identify tyrants and empires and divisions of race, religion, and tribe were decided through the sword and clash of armies. The idea that nations and peoples could come together in peace to solve their disputes and advance a common prosperity seemed unimaginable. If took the awful carnage of two world wars to shift our thinking. The leaders who built the United Nations were not naive. They did not think this body could eradicate all wars. But in the wake of millions dead and continents in rubble, and with the development of Nuclear Weapons that could annihilate a planet, they understood that humanity could not survive the course it was on. So they gave us this institution. Believe it could allow us to resolve conflicts, enforce rules of behavior, and build habits of cooperation that would grow tronger over time. For decades the United Nations has made a difference from helping to eradicate disease to educating children to brokering peace. But like every generation of leaders, we face new and and this allenges body continues to be tested. The question is whether we possess the wisdom and courage as nation states and members of an International Community to squarely meet those challenges. Whether the United Nations can meet the test of our time. For much of my tenure as president some of our most urgent challenges have resolved around an increasingly integrated Global Economy, and efforts to recover from the worst economic crisis of our lifetime. Now five years after the Global Economy collapsed and thanks to coordinated efforts by the countries here today, jobs are being created Global Financial systems have stabilized, and people are once again being lifted out of poverty. But this progress is fragile and unequal and we still have work to do together to assure that our citizens can access the opportunities that they need to hrive in the 21st century. Together we have also worked to end a decade of car. Five years ago nearly 180,000 americans were serving in harms way. The war in iraq was the dominant issue in our relationship with the rest of the world. Today all of our troops have left iraq. Next year an International Coalition will end its war in afghanistan having achieved its commission of dismantling the core of al qaeda that attacked us on 9 11. For the United States these new circumstances also meant shifting away from a perpetual war footing. Beyond bringing our troops home, we have limited the use of droughns so they target only those who pose a continuing imminent threat to the us where capture is not feasible and there is a near certainty of no civilian casualties. We are transferring detainees in other countries and trying them in courts of law while working diligently to close the prison at guantanamo bay. Just as we review now we deploy our extraordinary military capabilities in way that lips up to our ideals we have begun to review the way we gather intelligence so we properly balances the security concerns of our citizens and allies with the privacy concerns that all people share. As a result of this work, and cooperation with allies and partners, the world is more stable than it was five years ago. But even a glance at todays headlines indicates the dangers emain. In kenya we have seen terrorists target innocent civilians in a crowded Shopping Mall event mall, and our hearts go out to the families affected. 150 families work recently killed by suicide bomber in a hurch. In iraq, killing by car bombs continues to be a terrible part of life. Meanwhile al qaeda has splintered into Regional Networks and militias which doesnt give them a capacity to carry out attacks by 9 11 but does pose serious threats to governments and diplomats, business and civilians across the globe. Just as significantly, the convulsions in the middle east and north africa have led to deep divisions within societies. As people grapple with what is next. Peaceful movements have too often been answered by violence, from those trying to create change, and by extremists trying o hijack change. Secretarytarian conflict has reemerged, and the potential spread of w. M. D. Continues to cast a shadow over the pursuit f peace. Nowhere have we seen these trends more powerfully than in syria. There are peaceful protests against a authoritarian regime were met with slaughter. In the face of such carnage, many retreated to their secretarytarian identities, sunni, christian, and kurd, and the situation spiraled in the civil war. The International Community recognized the stakes early on, but our response has not matched this detail of the brutality. Aid cannot keep pace with the suffering of the wounded and displaced. A Peace Process is stillborn, america and others have worked to bolster the moderate opposition, but extremist groups have still taken root to exploit the crisis. Alassads traditional allies have propped him up, and shielded the regime. And on august 21, the regime used the local weapons in an attack that killed more than 1000 people, including hundreds of children. The crisis in syria, and the destabilization throughout the region goes to the heart of the broader challenges that the International Community must now onfront. How should we respond to complex conflicts in the middle east and north africa. Conflicts between countries, but also conflicts within them. How do we address the choice of standing callously by while children are subjected to nerve gas or enbroiling ourselves in someone elses civil war. What is the role of force aimed order to solve disputes in that region . Whats the role of the United Nations, and International Law in meeting cries for justice . Today i want to outline where the United States of america tands on these issues. With respect to syria, we believe that as a starting point, the International Community must enforce the ban on chemical weapons. When i stated my willingness to order a limited strike against the assad regime in response to the brazen use of chemical weapons, i did not do so lightly. I did so because i believe it is in the National Security interest of the United States, and in the interest of the world, to meaningfully enforce a prohibition whose origins are older than the United Nations itself. The ban against the use of chemical weapons has been agreed to by 98 of humanity. It is strengthened by the searing memories of soldiers suffocating in the trenches, jews slaughtered in gas chambers, iranians poisoned in the many tens of thousands. The evidence is overwhelming that the asad regime used chemical weapons on august 1. U. N. Inspect jurors gave clear accounting that rockets fired large quantities of sarin gas at civilians. They were fired from a regimecontrolled neighborhood and landed in opposition neighborhoods. Its an insult to human reason and to the lemcy of this institution to suggest that anyone other than the regime carried out this attack. I know in the immediate aftermath of the attack there was a question of legitimacy of even a limited strike in the absence of a clear mandate from the Security Council. But without a credible military threat, the Security Council had demonstrated no inclination to act at all. However, as i have discussed my preference has always been a diplomatic resolution to this issue. And in the past several weeks, the United States, russia and our allies have reached an agreement to place syrias chemical weapons under International Control and then to destroy them. The Syrian Government took a first step by giving an accounting of its stockpiles. Now, there must be a strong Security Council resolution to verify that the assad regime is keeping its commitments. And there must be consequences if they fail to do so. If we cannot agree even on this , then it will show that the United Nations isnt capable of enforcing the most basic of International Laws. On the other hand, if we succeed it will send a powerful message that the use of chemical weapons has no place in the 21st century. And that this body means what it says. Our agreement on chemical weapons should energize a larger diplomatic effort, to reach a political settlement within syria. I do not believe that military action by those within syria or by external powers can achieve a lasting peace. Nor do i believe that america or any nation should determine who will lead syria. That is for the Syrian People to decide. Nevertheless, a leader who slaughtered his citizens and gassed children to death cannot regain the legitimacy to lead a badly fractured country. The notion that syria can somehow return to a prewar status quo is a fantasy. Its time for russia and iran to realize that insisting on assads rule will lead to the outcome that they fear, an increasingly violence space for extremists to operate. In turn, those of us who continue to support the moderate opposition must be sper waded persuaded that the Syrian People cannot afford a collapse of state institutions, but a political settlement cannot be reached without addressing the egitimate fears and concerns of minorities. We are committed to working this political track and as we pursue a settlement, lets remember this is not a zerosum game. Were no longer in a cold war. Theres no great game to be won. Nor does america have any interest in syria beyond the wellbeing of its people, the stability of its neighbors, the elimination of chemical weapons and ensuring that it does not become a safe haven for terrorists. I welcome the influence of all nations that can help bring about a peaceful resolution of syrias civil war. As we move the geneva process forward, i urge all nations here to stop to help to meet humanitarian needs in syria and surrounding countries. Americas committed over 1 billion to this effort. Today i can announce that we will be providing an additional 340 million. No aid can take the place of a political resolution that gives the Syrian People the chance to rebuild their country. But it can help desperate people to survive. What broader conclusions can be drawn from americas policy toward syria . I know there are those who have been frustrated by our willingness to use our military might to depose assad, and believe that a failure to do so indicates a weakening of american resolve in the region. Others have suggested that my willingness to direct even limited military strikes to deter the further use of chemical weapons shows weve learned nothing from iraq and that america continues to seek control over the middle east for our own purposes. In this way, the situation in syria mirrors the contradiction that has persisted in the region for decades. The United States was chastised for meddling in the region, accused of having a hand in all manner of conspiracy, at the same time the United States is blamed for failing to do enough to soven the regions problems and for showing indifference toward suffering of the populations. I realize some of this is inevitable, given americas role in the world. But these contradictory attitudes have a Practical Impact on the American Peoples support for our involvement in the region. And it allows leaders in the region to avoid addressing difficult problems themselves. Let me take this opportunity to outline what has been the u. S. Policy toward the middle east and north africa and what will be my policy during the remainder of my presidency. The United States of america is prepared to use all elements of our power, including military force, to secure our core interests in the region. We will confront external aggression against our allies and partners, as we did in the gulf war. We will ensure the freeflow of energy from the region to the world, although america steadily is reducing our own dependence on imported oil, the world still depends on the Regions Energy supply. And a severe disruption could destabilize the entire Global Economy. We will dismantle terrorist networks that threaten our people. Whenever possible we will build the capacity of our partners, respect the sovereignty of nations and work to address the root causes of terror, but when its necessary to defend the United States against terrorist attack, we will take direct action. And finally, we will not tolerate the development or use of weapons of mass destruction. We consider the use of chemical weapons in syria to be a threat to our own National Security, we reject Nuclear Weapons that could trigger a Nuclear Arms Race in the region and undermine the global nonproliferation regime. To say that these are americas core interests are not to say that they are our only interests. We deeply believe it is in our interest to see a middle east and north africa that is peaceful and prosperous. And well continue to promote democracy and human rights and open markets because we believe the practices lead to peace and prosperity. But i also believe that we can rarely achieve these objectives through unilateral american action. Particularly through military action. Iraq shows us that democracy cannot simply be imposed by force. I believe these objectives are best achieved when we partner with the International Community. And with the countries and peoples of the region. So what does this mean Going Forward . In the near term, americas diplomatic efforts will focus on two particular issues. Irans pursuit of Nuclear Weapons and the arabisraeli conflict. While these issues are not the cause of all the regions problems, they have been a major source of instability for far too long. And resolving them can help serve as a foundation for a broader peace. The United States and iran have been isolated from one another since the Islamic Revolution of 1979. This mistrust has deep roots. Iranians have long complained of a history of u. S. Interference in their affairs and of americas role in overthrowing the iranian government during the cold war. On the other hand, americans see an iranian government that has declared the United States an enemy and directly or through proxies taken american hostages, killed u. S. Troops and civilians and threatened our ally israel with destruction. I dont believe this difficult history can be overcome overnight. The suspicions run too deep. But i do believe that if we can resolve the issue of Irans Nuclear program, that can serve as a major step down a long road towards a different relationship. One based on mutual interests and mutual respect. Since i took office ive made it clear in letters to the Supreme Leader in iran and more recently to president rouhani that america prefers to resolve our concerns over Irans Nuclear program peacefully, although we are determined to prevent iran from developing a nuclear weapon. We are not seeking regime change and we respect the right of the iranian people to access Peaceful Nuclear energy. Instead we insist that the iranian government meet its responsibilities under the Nuclear Nonproliferation treaty and u. N. Security council resolutions. Meanwhile, the Supreme Leader has issued a fatwa against the development of Nuclear Weapons and president rouhani has just recently reiterated that the Islamic Republic will never development a nuclear weapon. So these statements made by our respective governments should offer the basis for a meaningful agreement. We should be able to achieve a resolution that rments the rights of the iranian people, while giving the world confidence that the Iranian Program is peaceful. But to succeed, conciliatory words will have to be matched by actions that are transparent and verifiable. After all, its the iranian governments choices that have led to the comprehensive sanctions that are currently in place. And this is not simply an issue between the United States and iran. The world has seen iran evade its responsibilities in the past and has a biding interest in making sure that iran meets its obligations in the future. But, i ought to be clear, we are encouraged that president rouhani received from the iranian people a mandate to pursue a more moderate course and given president rouhanis stated commitment to reach an agreement, i am directing john kerry to pursue this effort with the iranian government. In close cooperation with the european union, the United Nations united kingdom, france, germany, russia and china. The roadblocks may prove to be too great. But i firmly believe the diplomatic path must be tested. While the status quo will only deepen irans isolation, irans genuine commitment to go down a different path will be good for the region and the world and will help the iranian people meet their extraordinary potential. In commerce and culture, in science and education. We are also determined to resolve a conflict that goes back even further than our differences with iran. And that is the conflict between palestinians and israelis. Ive made it clear that the United States will never compromise our commitment to israels security. Though our support for its existence as nor our support for its existence as a jewish state. Earlier this year in jerusalem, i was inspired by young israelis who stood up for the belief that peace was necessary , just and possible. And i believe theres a growing recognition within israel that the occupation of the west bank is tearing at the democratic fabric of the jewish state. But the children of israel have the right to live in a world where the nations assembled in this body fully recognize their country. And where we unequivocally reject those who fire rockets at their homes. R insight others to hate them. Likewise, the United States remains committed to the belief that the Palestinian People have a right to live with security and dignity in their own sovereign state. On the same trip i had the opportunity to meet with young palestinians in ramallah whose ambition and incredible potential are matched by the pain they feel in having no firm place in the community of nations. They are understandably cynical to Real Progress that Real Progress will ever be made and theyre frustrated about irtheir families enduring the daily indignity of occupation. But they too recognize that two states is the only real path to peace. Because just as the Palestinian People must not be displaced, the state of israel is here to stay. The time is now ripe for the entire International Community to get behind the pursuit of peace. Already israeli and palestinian leaders have demonstrated a willingness to take significant political risks. President abbas has put aside efforts to shortcut the pursuit of peace and come to the negotiating table. Prime minister netanyahu has released palestinian prisoners and reaffirmed his commitment to a palestinian state. Current talks are focused on final status issues of borders and security, refugees and jerusalem. So now the rest of us must be willing to take risks as well. Friends of israel, including the United States, must recognize that israels security as a jewish and Democratic State depend on the realization of a palestinian state. And we should say so clearly. Arab states and those who supported the palestinians must recognize that stability will only be served through a twostate solution and a cured israel. All of us must recognize that peace will be a powerful tool to defeat extremists throughout the region and a emboldin those who are peeped prepared to. Ild a better this could be an engine of growth and opportunity at a time when too many in the region are languishing without work. So lets emerge from the familiar corners, lets support israeli and palestinian leaders who are prepared to walk the difficult road to peace. Real breakthroughs on these two issues, Irans Nuclear program, and israelipalestinian peace, would have a profound and positive impact on the entire middle east and north africa. But the current con vugses convulsions as i rise arising out of the arab spring remind us that lasting peace cannot be measured only by agreements between nations. It must also be measured by our ability to resolve conflict and promote justice within nations. By that measure its clear that some of us have a lot more work to do. When peaceful transitions began in tunisia and egypt, the entire world was filled with hope. And although the United States, like others, was struck by the , we chose ansition to support those who called for change. We did so based on the belief that while these transitions will be hard and take time, societys based upon democracy and openness and the dignity of the individual will ultimately be more stable, more prosperous and more peaceful. Over the last few years, particularly egypt, weve seen just how hard this transition will be. Morsi was democratically elected but proved unwilling or unable to govern in a way that was fully inclusive. The interim government replaced him, responded to the concerns of millions of egyptians who believed the revolution had taken a wrong turn. But it too has made decisions in consent with incluesive democracy, through an emergency law and restrictions on the press and society and pposition parties. Of course americas been attacked by all sides of this internal conflict. Simultaneously accused of supporting the Muslim Brotherhood and engineering heir removal of power. Our overriding interest throughout these past few years has been to encourage a government that legitimately reflects the will of the egyptian people. And recognizes true democracy is requiring a respect for minority rights and the rule of law. Freedom of speech and assembly and a strong civil society. That remains our interest today. And so Going Forward the United States will maintain a constructive relationship with the interim government that promotes core interests like the camp david accords and counterterrorism, will continue support in areas like education that directly benefit the egyptian people, but we have not proceeded with the delivery of certain military systems. And our support will depend upon egypts progress in pursuing a more Democratic Path. And our approach to egypt reflects a larger point. The United States will at times work with governments that do not meet, at least in our view, the highest international expectations. But who work with us on our core interests. Nevertheless, we will not stop asserting principles that are consistent with our ideals. Whether that means opposing the use of violence as a means of suppressing dissent, or supporting the principles embodied in the universal declaration of human rights. We will reject the notion that these principles are simply western exports, incompatible with islam or the arab world. We believe they are the birth right of every person. And while we recognize that our influence will at times be limited, although we will be wary of efforts to impose democracy through military force, and although we will at times be accused of hypocrisy and inconsistency, we will be engaged in the region for the long haul. For the hard work of forging freedom and democracy is the task of a generation. And this includes efforts to resolve sectarian tensions that continue to surface in places ike iraq, bahrain and syria. We understand such longstanding issues cannot be solved by outsiders. They must be addressed by muslim communities themselves. But weve seen grinding conflicts come to an end before. Most recently in Northern Ireland where catholics and protestants finally recognized that an endless cycle of conflict was causing both communities to fall behind a fastmoving world. And so we believe those same sectarian conflicts can be overcome in the middle east and orth africa. To summarize, the United States has a hardearned humility when it comes to our ability to determine events inside other countries. The notion of american empire may be useful propaganda but it isnt borne out by americas current policy or by public opinion. Indeed, as recent debates within the United States over syria clearly show, the danger for the world is not an america that is too eager to immerse itself in the affairs of other countries or to take on every problem in the region as its own. The danger for the world is that the United States after a decade of war rightly concerned about issues back home, aware of our hostility in the region has engendered throughout the muslim world, may disengage, creating a vacuum of leadership that no other nation is ready to fill. I believe such disengagement would be a mistake. I believe america must remain engaged for our own security, but i also believe the world is better for it. Some may disagree. But i believe america is exceptional. In part because we have shown a willingness through the sacrifice of blood and treasure to stand up not only for our own narrow selfinterests but for the interests of all. I must be honest, though. Were far more likely to invest our energy in those countries that want to work with us, that invest in their people instead of a corrupt few. That embrace a vision of society where everyone can contribute, men and women, shia or sunni, muslim, christian or jew. Because from europe to asia, from africa to the americas, nations that have persevered on a Democratic Path have emerged more prosperous, more peaceful and more invested in upholding our Common Security and our common humanity. I believe that the same will hold true for the arab world. This leads me to a final point. There will be times when the breakdown of societies is so great, the violence against civilians so substantial that the International Community will be called upon to act. This will require new thinking and some very tough choices. While the United Nations was designed to prevent wars between states, increasingly we face the challenge of preventing slaughter within states. And these challenges will grow more pronounced as we are confronted with states that are fragile or failing. Places where horrendous violence can put innocent men, women and children at risk, with no hope of protection from their national institutions. I have made it clear that even when americas core interests are not directly threatened, we stand ready to do our part to prevent mass atrocities and protect basic human rights. But we cannot and should not bear that burden alone. In mali we supported both the french intervention that successfully pushed back al qaeda and the African Forces who are keeping the peace. In Eastern Africa we are working with partners to bring the Lords Resistance Army to an end. And in libya, when the Security Council provided a mandate to protect civilians, america joined a coalition that took action. Because of what we did there, countless lives were saved and a tyrant could not kill his way back to power. I know that some now criticize the action in libya as an object lesson. They point to the problems that the country now confronts, a democratically elected government, struggling to provide security, armed groups in some places, extremists ruling parts of a fractured land. And so these critics argue that any intervention to protect civilians is doomed to fail. Look at libya. No ones more mindful of these problems than i am, for they resulted in the death of four outstanding u. S. Citizens who were committed to the libyan people. Including ambassador chris steveness, a man chose courageous efforts helped save the did he of benghazi. But does anyone truly believe that the situation in libya would be better if gaddafi had been allowed to kill, imprison or brutalize his people into submission . Its far more likely that without international action, libya would now be engulfed in civil war and bloodshed. We live in a world of imperfect choices. Different nations will not agree on the need for action in every instance. And the principle of sovereignty is at the center of our international order. But sovereignty cannot be a shield for tyrants to commit one murder or an excuse for the International Community to turn a blind eye. While we need to be mod nest our belief that we can remedy every evil, while we need to be mindful that the world is full of unintended consequences, should we really accept the notion that the world is powerless in the face of a rwanda . If thats the world people want to live in, they should say so and reckon with the mass graves. But i think we should embrace a different future. And if we dont want to choose between inaction and war, we must get better, all of us, at the policies that prevent the breakdown of basic orders. Through respect for the responsibilities of nations and the rights of individuals, through meaningful sanctions for those who break the rules, through dogged diplomacy that resolves the root causes of conflict. Not merely its aftermath. Through Development Assistance that brings hope to the marginalized and, yes, sometimes, although this will not be enough, there are going to be moments where the International Community will need to acknowledge that the multilateral use of military force may be required to prevent the very worst from occurring. Ultimately this is the International Community that america seeks. One where nations do not covet the land or resources of other nations, but one in which we carry out the founding purpose of this institution and where we all take responsibility. A world in which the rules established out of the horrors of war can help us resolve conflicts peacefully and prevent the kinds of wars that our forefathers fought. A world where human beings can live with dignity and meet their basic needs, whether they live in new york or nairobi or damascus. These are extraordinary times with extraordinary opportunities. Thanks to human progress, a child born anywhere on earth today can do things that 60 years ago would have been out of reach for the mass of humanity. I saw this in africa where nations moving beyond conflict are now poised to take off. And americas with them, partnering to feed the hungry and care for the sick and to bring power to places off the grid. I see it across the Pacific Region where hundreds of millions have been lifted out of poverty in a single generation. I see it in the faces of young people everywhere who can access the entire world with the click of a button. And who are eager to join the cause of eradicating extreme poverty and combating climate change, starting businesses, expanding freedom and leaving behind the old ideological battles of the past. Thats whats happening in asia and africa, its happening in europe and across the americas. Thats the future that the people of the middle east and north africa deserve as well. One where they can focus on opportunity instead of whether theyll be killed or repressed because of who they are or what they believe. Time and again nations and people have shown our capacity to change. To live up to humanitys highest ideals. To choose our better history. Last month i stood where 50 years ago Martin Luther king jr. Told america about his dream. At a time when when many people of my haise would not even vote for race would not even vote for president. Earlier this year i stood in the small cell where Nelson Mandela endured decades cut off from his own people and the world. Who are we to believe that todays challenges cannot be overcome . When web of seen what changes the when weve seen what changes the human spirit can bring. Who can argue that the future belongs to those who seek to repress that spirit rather than those who seek to liberate it . I know what side of history i want the United States of america to be on. Were ready to meet tomorrows challenges with you. Firm in the belief that all men and women are in fact created equal, each individual possessed with a dignity and inalienable rights that cannot be denied. That is why we look to the future not with fear but with hope. And thats why we remain convinced that this community of nations can deliver a more peaceful, prosperous and just world to the next generation. Thank you very much. [applause] [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2013] president obama earlier today. We have live coverage of the president of iran when he gives his speech to the u. N. This afternoon. A reminder at 4 00 p. M. We will also go live to the Senate Budget Committee Hearing on the potential impact of a Government Shutdown and now to capitol hill to hear remarks from Senate Leaders with developments on the way forward to temporary funding of the federal government. Obviously it got us nothing because they did not want that bill to pass. As you remember, they had that amendment, another nongermane amendment, another nongermane amendment. There were up to five nongermane amendments. And approximately 40 energy amendments. So we can keep pushing this, i mean, it will help him get elected governor which in my mind wouldnt be a bad deal if you know what i mean. Some of your colleagues said they wanted the c. R. Number at 1058 and you should send it back to the house. Theyre going to support you it doesnt matter. Its sequestration that matters. That does not matter. Lets not have 1058, lets have it one trillion and another trillion. Sequestration is where the problem is. [inaudible] companies with parttime workers inaudible] im sure that none of you have the time like i do to watch the news hour. Last night they had a really good piece about obamacare and about Small Businesses and after watching that, it only made me feel more strongly about how important this is for obamacare for Small Businesses, for people without insurance, for people with insurance. So i think that obamacare is the right thing for the country and its going to people are accepting this. As you know, as i talked about on the floor this morning, the numbers are really pretty good for obamacare and thats an understatement. And once exchanges kick in, it will be just like medicare. People complained about medicare in the early 1960s but not for long. Because once it came into effect, people understood how it worked. Just like me. I was a chairman of a great new biggest hospital district in nevada, prior to medicare 40 of the seniors that came into the hospital had no insurance. And they suffered as a result of that. Medicare came into being, 99. 9 now have it. And thats the same thing on obamacare. Its going to be the same. Thanks, everyone. Thank you. [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2013] as you know were moving forward to not only invoke cloture motion to proceed to the housepassed bill that defunds obamacare, that does not raise taxes, and that respects the topline from the budget control act. Cloture will be invoked on the bill. I will be supporting that and i think other members of our conference will. And we think basically the house has sent us is what we wanted. A bill that honored the top line from the budget control act, that didnt raise taxes nd defunded obamacare. So what happened after cloture is achieved on the underlying continuing resolution . Senator reid has set up his redstate democrats to vote once again to Fund Obamacare or to decide they were for it before they were against it and to vote no. So, i think the focus needs to be on why isnt it that we cant get redstate democrats who can read the newspaper, watch the television, read the internet, just like we can, which shows that obamacare has been a dismal failure . You like what you have, you cant keep it. Rather than see premium goes down on an average of 2,500, theyve gone up 2,400 for the average family of four. And this is the very reason why organized labor and other ardent advocates of obamacare are now asking the president and his party for relief. So, i think the focus once clotures achieved on the underlying bill to deFund Obamacare, which will have a strong vote on, the question ought to be, why cant redstate democrats listen to their own constituents and give them and the rest of the country some relief from this bill that is obviously not performing as advertised . Obamacare and the president s Energy Policies really are a onetwo gut punch to the American Economy and the middle class families. I want to talk a little bit about energy. Last week the president announced a policy that is essentially an energy tax on american consumers. In an economy where we have the lowest participation rate, Labor Participation rate, over the last 35 years, and you have takehome pay, average Household Income has gone down by almost 4,000 since the president took office, and 60 of the jobs created here so far are parttime jobs, you have a pretty weak and sluggish economy. Thats why when the president keeps piling on in the form of obama mandates and requirements and now a new National Energy tax, it will hit middle class americans and families squarely in the gut and thats the last thing that we need right now. We need policies that will get people back to work, that will increase the takehome pay for middle class families across this country, and will get this economy growing again. And you can do that by permanently delaying or repealing obamacare. You can do that by passing the Keystone Pipeline which is something thats been hanging around here for a long time and according to the president s own state department would create 42,000 jobs immediately. And you can do it by killing, stopping this National Energy tax which the president s trying to put on our American Economy. The American Economy, the american middle class family needs a break from obamas olicies. There was a picture of a pill beau bot there will and it said promises and reality. Promises that the president made. So this afternoon in new york city, the president is going to his e warmup act for ambassador, if you will, or his secretary of explaining things, bill clinton. So the two of them are going to be trying to explain away all of the problems of the Health Care Law. And im calling on president clinton to actually be honest and apologize to the people who are being hurt by the Health Care Law. That so many people who had parttime jobs, who have had their hours cut, so many spouses who have lost, who have received insurance through work , who are now going to be cut off of their insurance policies, also the young people who are being asked to pay a lot more for Health Insurance. Many people cant afford even with the subsidies, theyre not going to be able to afford hem. And also apologize to the union believe thed president when he said, if you like what you have, you can keep it and your insurance rates will come down. None of these things have come true. So im hoping with both president s together, they level with the American People and apologize for the damage heyve caused. Senator cruz argues that what he is doing is fighting for a very powerful, vocal part of your party and that effectively hes saying the fact that you are not standing with him means that its washington business as usual. Does he have a point . Are you worried about retribution, especially the two of you who are up for reelection this primary calendar . I think we would be hardpressed to explain why were opposed to a bill we were in favor of. Invoking cloture on a combill that respects the budget control act, it strikes me as a nobrainer. And so im not reluctant to explain voting for things that im for. Thats the way i see it. And im hopeful that a majority of the republican conference will see it the same way. Does he just not get it . The flipside of that, may i ask you, do you think i can only speak for myself. Senator reid just said he would like to extend the c. R. Until november 15. As opposed to december 15. What do you think about that . Is that something youll support . I think thats something for the majority leader and the speaker to work out as to what is the appropriate time for this extension. It would basically have to be acceptable to the house and senate. Republicans, as far as in this particular case maybe you dont control all of them, but will republicans yield back some time so that this gets done sooner than sunday night over here . I can speak for myself. As any one senator can object to any effort to shorten the process, my own view is it would be to the advantage of our colleagues in the house or in the majority to shorten the process. And if the majority leader were to ask us to shorten the process, i would not object. I dont know who else in the conference may feel differently. But i do know, but i do know that if the house doesnt get what we send over there until monday, theyre in a pretty tough spot. And my own view is the house, having passed a bill that i really like and intend to support, i hate to put them in tough spot. Below the sequester level [inaudible] is that an important victory for conservatives to i would prefer the 967 level. But heres the way the house looks at it. They view the c. R. As an extension of the current rate of spending. The current rate. And the budget control act controls what the top line will be for the next fiscal year. And if that numbers not achieved, we will fall back to 978ality the end of the year. My personal preference would be to stay at 967 but theyre right when they say the law is going to push us back to that anyway at the end of the year. Thanks a lot, everybody. Can i get reaction to the talks . [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2013] Senate Republican leaders following their weekly party lunches with news that the senate plans to strip out language in the house continuing resolution that would remove funding for the the Nations Health care law. Also proposing a this would be majority leader harry reid proposing a c. R. That will fund the government through november 15. This is different than the house bill that would keep the government operating through december 15. Senators have returned to session this afternoon. Continuing the debate on the c. R. The continuing resolution approved by the house, that would keep the government in operation past the end of this month. Current funding does run out on september 30. The house bill also including language that would strip out funding for the Nations Health care law. You can see the senate live right now on our companion network, cspan2. On the senate floor right now, texas senator ted cruz who is leading a filibuster response. The house will be back in tomorrow. Live coverage of the house here at noon eastern on cspan. Elsewhere on capitol hill, live right now, the Senate Budget committee is meeting. And holding a hearing on the potential impact of a Government Shutdown in six days. This started about 10 minutes ago. Chair pat murray of Washington State has just finished up her opening remarks and now speaking, senator jeff sessions. In the place of your opening remarks which are capable of being written by David Axelrod during the height of a political campaign. Weve got a lot of problems in this country. And we need to be dealing with the fundamental problems in this country. And this recovery is not a recovery at all. Its a very, very weak recovery. Things are not going well with the American People. The growth every year falls below what c. B. O. And what the fed has projected that it will be. Why is this happening . I suggest its too many taxes, too much regulation, too much obamacare and too much government. We need to have growth in the private sector and debt itself is pulling down growth. I would just note of the jobs hat have been so touted this year, since january, 77 of those jobs were less than fulltime, were not fulltime jobs. Thats clearly a direct result of the obamacare. And until we deal with these massive Government Programs and regulations, were not going to get this economy growing in the right way. Were here because weve not resolved the large nagging policy differences that stand in the way of fiscal improvements. The state of middle and lower number americans is worsening on every front. The slow growth of the economy, the slowest economic recovery since world war ii, is restraining the normal upward movement in income that previous generations have experienced. Even after recessions. If you dont have a job, youre twice as likely to only find parttime as fulltime work. If you can find any work at all. Middle class incomes have stagnated, actually fallen, and that means that savings for college and retirement are at alltime lows. Even after the recession, in this recovery period, these numbers are still out there. Young people are not marrying as early as they want due to bad economic prospects. That means families are launching later in life, which gives couples fewer years to pay down their mortgage, create savings and raise their children. Too many of our Public Schools waste taxpayer dollars by consistently failing the children of hardworking parents. Indeed we are missing the american dream. The new normal really refers to the increasingly modest dreams hardworking families allow themselves. Maybe education after high school, maybe retirement, maybe a paidup home and car when you stop working, but increasingly not certain and perhaps even likely. The rapid growth of Government Debt has slowed the economy. Its slowing it now. As has the mounting concern that washington will ever bring its fiscal house in order. Theres a concern were never going to get it into order. The real uncertainty in the Financial Markets deals with our capacity to address our short and longterm fiscal and Economic Policy problems. Solving them, not just passing a c. R. , as if thats going to fix anything. Businesses have been slow to expand their operations, thus further weakening middle and lower income families. Fewer people are working than in 2007. Get this, just before the recession hit in december of 2007, about 62. 7 of the population age 16 and above who were looking for a job were working. If that same percentage were working today, wed have 154 million jobs. But we dont. We have only 144 million jobs. And only 58 of the population is working. I think thats the lowest since 1975. In short, we are missing 9. 9 million jobs when we compare this economy to the one in 2007. So we need to ask some questions here. Heres another way to look at the problems in our job market. 2007 we had 363,000 discouraged workers. People who had given up looking for work but had not yet disappeared from view by the Employment Security offices. Today we have 866,000. Thats an increase of 140 . Heres another barometer of the middle class anxiety. We have 1,988,000 fewer fulltime jobs today than in 2007. We have 3,627,000 more in the total job population on parttime work than we had in 2007. 3. 6 million. Our economy appears to be much better at producing parttime jobs than fulltime. Which is definitely worryiesome. Resolving this jobs crisis for working families will take more than just passing a socalled continuing resolution. Or a new process for adjusting the debt ceiling, just borrow more. As some have suggested. We need a comprehensive review of our economic policies. And i might add even our welfare policies. Obviously our economic policies arent working very well. Perhaps our welfare policies are exacerbating the trend also. Tax more, borrow more, spend more, regulate more, more health care from the federal government side is not improving our situation. Qe3 at the fed, has it really produced growth that we normally see after the recession . It has not. Their projections have been continually off. So lets take this period, this threemonth period, to debate the Spending Priorities and set some muchneeded reforms in motion. That will actually deal with the problems of growth in america and job creation. What will work to create jobs . Tax more, spend more, borrow more . Regulate more . Is that going to create jobs . I suggest to you it will never create jobs. It is a guaranteed plan for failure. If we can come out of these debates with the evidence that weve actually fixed broken programs, confronting our rising debt, investors will thank us by infusing the private sector with new capital and thats when working families might begin to see some economic light at the end of a very long tunnel. I was a United Nations attorney when president United States attorney when president reagan was president. The government was shut down in the early 1980s. Its still here today, i nled. They shut it down in the 1990s. I think there were two or three shutdowns when reagan was president. Some a little longer than others. Some short. Were still here. About the difficulties that are facing us, the need to reach an accord between our parties that will actually create policies that create growth and jobs and were not doing that now and the trends are not good. So this is a good panel. I know well have some disagreements. We already have. But weve got to work on these things ande ve difference of a view about i think how to make this country better. And maybe we can learn something today. Thank you, madam chairman. Thank you very much. With that were going to turn to you again. Thank you to all of you for being here today. Thank you, chairman murray. Ranking member sessions. And other members of the committee for the opportunity to be here today. I am an employee of the Moodys Corporation but the views i express today are my own, my own views. Id like to make three points in my oral remarks. The first one is that Political Uncertainty has been a significant weight on the economic recovery. Political uncertainties general ratesed by the brinkmanship here in washington over the budget or the debt ceiling, over policy and regulation, all those things combined have weighed heavily on Economic Activity. I think thats most of it in terms of the Decision Making of businesses. Most clearly in the terms of hiring. I think i have a chart. I dont know if youre going to be able to show the charts or not. No . There we go. This shows the number of hires to 2000. Month back youll note that hiring in the recession remains very, very low by historical standards. Current hiring rates on a monthly basis are between four million and 4 1 2 million. In a reasonably well functioning economy it should be five million to 5 1 2 million. You can see that, if you go back to the previous recovery or the one before that. So the Political Uncertainty i think is key to the lack of hiring, the unwillingness of businesses to take a risk. Its also evident in entrepreneurship, which is also critical to Economic Growth, short and longterm. You can see that in the next at which shows job gains new establishments and here too you can see the shortfalls are quite significant. Of all things that i worry about in regard to the economy, and i agree the recovery has been very subpar, this is it. Entrepreneurship is key to our longterm Economic Growth. It is what makes our economy tick and why its such a dynamic economy and the most dynamic economy on the planet. This picture has to change and i think the reason it is so depressed is in large part due to uncertainty. To give you context on work ive done with the stimulus act in early 2009, has shaved about 150 billion from real g. D. P. Which translates into a little over a million jobs and has. 7 . Ased unemployment by so if Political Uncertainty had not risen to the degree that it has, the Unemployment Rate today would still be high, uncomfortably high, but at 6. 6 , were currently at 7. 3 , it would be 6. 6 , that would make a meaningful difference to our economys performance. Point number one is Political Uncertainty has been a very significant weight on Economic Activity during the recovery. The second thing, i think its key during the current budget battle, that policymakers come to terms in a timely way on funding the government, funding runs out at the end of this week, and raising the debt ceiling. To give you a sense of the impact here. If the government shut downs for several days, four or five days, no big deal. If its a month it will shave a point and a half and the g. D. P. Rowth will come to standstill. In my view, breaching the debt limit would be cataclysmic. It would mean higher Mortgage Rates, higher borrowing costs for businesses, lower stock prices, lower house prices. A fullblown recession and ere would be no reasonable policy response to it. By definition fiscal policymakers would not be responding. It would be a very, very dark scenario. Its critical that you come to terms on this in a timely way. Finally, my third point is, while i think its entirely appropriate and desirable for you to address our longterm fiscal challenges, and they are quite significant and there is a lot of hard work to do on entitlement reform, in tax reform, i would not add to the near term fiscal austerity. Under current law the policymakers do nothing. Thats quite significant. We do not need to add to it, the economys still quite fragile. Thank you for the opportunity again. I appreciate it. Thank you very much. Dr. Stone. Thank you for the opportunity to testify today on the effect of Political Uncertainty on jobs and the economy. Businesses and households of course deal with uncertainty of all kinds all the time in a Dynamic Market economy. We shouldnt be surprised that people fight hard for their preferred policies. But political gridlock over economic and budget policy combined with brinksmanship over mustpassed legislation has hurt Economic Performance and job creation. Unfortunately things seem to be getting worse rather than better as we face yet another threat to the economic recovery , generated purely by politics and not by economic events per se. I make two overarching points in my written testimony. First, make no mistake, while a Government Shutdown would be disruptive to the economy, a debt ceiling crisis that ends up with a failure of the federal government to honor financial obligations that it has already incurred, whether to bond holders, government contractors, veterans or to host of other businesses and households, could be disastrous. Evidence resolving budget issues to avoid a goth shutdown is only half the battle. A budget deal that hurts Economic Growth and job creation in the short run, increases hardship should not be acceptable. Moreover a stopgap deal, one both sides are not committed to eing enforced, lengthens the showdown. Sequestration was supposedly so unpalatable to both sides it would gearn tee an agreement but here we are with sequestration a possible Government Shutdown and a debt ceiling crisis. Theres a wrodder broader lesson here. Budget committees and rules can not force people to make choices that are unpalatable. Were a long way from the 1990s when a Strong Economy and policymakers willingness to stick to paygo brought down debt. I discussed the broad recognition among economists broad, not universal but broad that the main factor is aggregate demand. If businesses were more confident of future sales and households more confident that they could see their income grow wed see faster Economic Growth and job creation. Were stuck in a he low demand trap. Economic growth is too slow and unemployment remains too high. The economy has generated plenty of uncertainty on its own in recent years. Businesses, house holes holds and Financial Markets had to deal with uncertainty to policy decisions in a run up to critical decisions in each of the past several years 20 10 20, 11, the 2012 fes call cliff. The greatest uncertainty surrounded the showdown over raising the debt limit in 2011 and how that would be resolved. Evidence suggests that businesses, households and Financial Markets experience heightened uncertainty in such times and greater uncertainty acts as antistimulus. Weakening aggregate demand. Failure to resolve underlying issues or policies that restrain aggregate command. Resolving the budget policies is no solution. Sequestration is the poster child of misguided fiscal restraint but the pursuit of fiscal policies at the expense of creating immediate Economic Activity has held back the recovery. The international monotear fund gets it right when they say deficit reduction in 2013 has een rapid and ill designed, it and spending in other areas could reduce midterm growth. These should be replaced with measures along the line of the administrations budget proposal. This would help the recovery at a time when Monetary Policy has imited time. My final words, raise the debt ceiling and do it soon and cleanly. Do it like the danes, raise it so high that its not a bone of contention. Theyre the only other country that has anything like our debt ceiling and they make sure poll doesnt get tics involved. Better yet, raze, raze the debt ceiling and get rid of it entirely. Thank you very much. Dr. Melzer. Thank you, madam chairman, senators, im pleased to respond once again to questions if the Senate Committee about the reasons for the slow recovery. The facts about the slow recovery are not in doubt so i wont dwell on them. We understand them you both spoke about them. We see unemployment as high, poverty remains higher, failed efforts to lower the spread between upper incomes and lower incomes have done the reverse. Policy has clearly not achieved the nice things that people would like it to achieve. Fore katzes have been overly optimistic, deficit predictions become more pessimistic. The debt to g. D. P. Ratio reach 2s00 . Long before that happens well be in crisis. Why so much stimulus sooned little recovery . Well, there are lots of reasons. The fed pumps out money but the problem are mainly nonmonetary. My colleagues have talked about uncertainty and i certainly agree with them that uncertainty is a problem and certainty about the deficit and the debt ceiling are problems. They are a problem, they are not, in my opinion, the problem. The problem is a longer Term Position of how the United States gets back on the growth path which has been left since the reagan and clinton years to produce growth, jobs, standards of living, and incomes and all that. There are two overriding problems. One is unsustainable budget deficits, especially entitlements. You know about that second are the demands for higher tax rates and decisions to increase regulation rates expected to heighten uncertainty. Uncertainty is the enemy of investment and thats the main reason why the longterm growth rate is down. Theres no valid economic theory new york theory of any kind that advises shortterm stimulus to consumer spending. John maynard canse is usually voke keynes is often envoked. He never favored consumption, he favored investment. Investment spending. His idea of stimsluss the kennedyjohnson permanent tax cuts or reagan tax cuts. Le to the favor spending help, he didnt believe in deficit spending. Theres no sound basis in economics for the policies we have followed. They have not ended the recession in almost five years, not surprisingly, and most forecasts i have seen call for subpar growth in the next five years. We can do better, should do better and if were going to achee the america we want, we should do better. In searching through past recessions, theres only one recession similar to this one, 1938 to 1940, you can see table six and the paper in my testimony. What president roosevelt did is similar to what president obama has done he calls the businessmen economic royalists, tried to pack the supreme court, passed an exezz profits tax, ginned up the antitrust division to go after businessmen, got congress to acomponent the temp rare commission that was very antibusiness he did a lot of things, he did them until the war. He was a populist until the war. When the war came, the businessmen he was so despising of, he apointed the head of General Motors to be his economic czar. Populism ended. The war was his triumph. Thats what we need to do now. We need to adopt policies that look at the longterm objective of getting the economy back on a stable growth path. Et me read to you not from Economic Analysis but from what real businessmen say. Professorer porter and riff kin asked 10,000 Business School alumni. They run many of the major corporations, about their decisions to locate plants. The respondents cited a couple as problems, the u. S. Tax code, an ineffective political system, a weak Public Education system, poor macroeconomic policies, convoluted regular leagses, deteriorating infrastructure, and a lack of Skilled Labor as reasons for not investing in the yeats. Most of the decisions were to move investment out of the United States. That tells us something, i think, which is critical. Here is one example, one of many, many examples of regulation which hurts our economy. Before sarbanesoxley, half of the worlds new issues for corporations were made in the u. S. Market, mainly new york. After sarbanesoxley, one in 12, instead of one in two. Brokers in london have pictures of senator sarbapes and congressman oxley iner that office. That tells you something about what regulation is doing to us. We are overregulated. You may think there are good things or bad thing about the regulations. One can differ about that. But regulation at the present time and high tax rates impede growth and recovery. Thank you very much. To all three of you. And dr. Zandy, let me start with you. You stated that you expect lawmakers to come together at the last minute because the failure to do so would, and i quote, have dire economic consequences. And i think thats a very sensible and rational position and for anybody to assume that those of nuss elected office and sent here to do everything we can to avoid enflicting harm on our economy and our constituents would do everything we could to do that but i worry because there seems to be a lot of dysfunction and unwillingness to compromise here today and i think many of the people need to understand what the impacts of that is. I wanted to ask you, really, the question that was posed by this hearing, to talk about the uncertainty that we create here and how it impacts people. Lets start with the debt limit. What it would mean for the United States to default and for all of our viewers who are watching at home here today, maybe if you could describe for them what a default on our debt would mean to them ander that families and what they would see at home. Sure. If weve reached the debt limit and it looks leek under reasonable assumptions it will the second half of october, in all likelihood the treasury would continue to pay on the debt. They have the mechanism for doning that and i would be surprised if they didnt. However, that would mean that the treasury couldnt meet all etc. Other bills, and theyre quite substantive. To give you an example, on november 1, theres a very large Social Security payment due. The goth would not have enough cash on hand to make that payment. In all likelihood, the treasury would wait for a day, two, three, five, six, seven days, whatever it took, to raise the cash sufficient to make the full payment to Social Security. And over time, would continue, the lag between the bills coming in and the checks being cut would encrease. Well, i think if we got into that kind of situation, i think it immediately i think immediately there would be pan exand bedlam. If Social Security recipients arent going to getter that checks, enge it could be cataclysmic. Moreover, even Global Investors who the treasury said theyre going to pay, would question whether that would cant. Are we going to pay Global Investors, half of whom are foreign investors, before we pay Social Security recipients . Legitimate questions an investor would ask themselves. The Financial Markets would be sent into turmoil. What does this mean for the average american . It means it would be difficult to get a mortgage, Mortgage Rates would rise, it would mean businesses, Small Businesses, big businesses have trouble raising money to funed funder that activities, cost of funding would increase and become much less available, it would mean house prices would decline, stock prices would decline and it would quickly mean layoffs and unemployment would surge. As i said during my oral remarks, theres no policy response to that, none. We all realize the reserve is at the end of its rope, how would it reserve . By definition you all wouldnt be responding, by definition. So it would be an incredibly dark situation and on par with the great recession, maybe worse, depending on how things played out. We just cant go down that path. Its opening an economic pandoras box, literally. Thank you very much for helping us understand that. The debt limit crisis is the most recent and perhaps the most obvious example of uncertainty but its not the only one. Over the last few years, congress has repeatedly taken the nation from one crisis to the next with brinksmanship, the best example i have is the budget that we passed out of the senate and the house passed the budget and weve been waiting for almost six months now to be able to go to conference to let the country know where our investments are going to bed me and what our priorities are and how were going to manage our budget. I have to say that some of our republican colleagues here in the senate have been pretty clear about why theyre blocking that. They oppose any compromise. Theyve said it on the floor, they say they dont want to compromise even with the House Republicans and they want to wanted this brinksmanship we have today on the budget and raising the debt limit. They seem to believe that solving some problem by pulling the government and economy from one crisis to another is the way to go but i wanted to ask y one of you, is the Problem Congress . And sort of the onetwo punch of brinksmanship and austerity that threatens our economy and economic recovery and jobs and global position . Congress has the pow ore they have purse, they have responsibility over government dealt, over government borrowing and federal spending and taxes. Theyre the ones who have to make the decisions. If the process isnt work, its congress that needs to make the decisions initially. The president has to go along but it starts with congress. Anybody else want to comment . Yes you may be happy to hear, i dont blame the congress. Youre elected by your constituents. The division we see in the couldnt reis a division of the country. Youre sent here, perhaps to represent the voters in washington who want one thing, the other the Tea Party People are sent to represent people who want something very different. And you know that your fate as an elector, as a legislator, depend upon major issues doing things that your voters thats where the split sthesm split is in the public. Neither side has been eable to convince the public they have the truth. Well, i wouldnt disagree. We come from different constituents. But my constituents tell me consistently they expect me to come here to sit down with others who disatpwhree with me and find solutions. And that really is why im so frustrated is because i cant do that. Im not allowed to by a few who are helding the holding the budget hostage. Thats why we are where we are. I agree with you, compromise i have been coming here, testifying before committees since about 1959, before many of the people in this room were born. Im familiar with governments have have been governments of compromise and governments which fail compromise. In my opinion, that depends on leadership. The president is the leader of the country. Its up to him to push for compromise. He doesnt do that. That leaves a problem where it is. I would like to say one other thing. I dont agree with mr. Sandy about the dire consequences of default. The consequences will depend there will be consequences but the consequences will depend on how long the default goes on. It isnt going to go on forever and will probably arouse enough reaction from the public that if we dont get the agreement before, well get it after. If you look at the previous examples my time is running short and i do want to give dr. Sandy to quick second to respond. Even the discussion around we may default, will that have an impact on our my . Sure, it already is. Just to be a little esoteric here, looking at credit default spreads on u. S. Treasury theark jumped to 32 basis points, a week ago they were five basis components, at the high of ight of the julyaugust 2012 shutdown they were 18 basis points. Were already on our way. I disagree with the notion that breaching the debt ceiling would not have major, catastrophic consequences. We had one technical default on treasury debt back in 1989. It was a mistake. Centered around a budget debate but it was a mistake, some vedge investors did not getter that money on time they have Academic Research clearly shows that has cost us tens of billions of dollars that one little mistake and they got paid right back with interest, and were made whole, but that raised the Interest Rates. We are pliing with real fear and not only would it damage the economy, it would be counterproductive for the budget. Long run. Not just next year but longterm. Ive used my time, eneed to turn it over to senator sessions. I would regard with note i would note with regard to debate, it seems to me a showdown over the debt ceiling resulted in grammrudman being passed, resulted in balanced budget act of 1997, it resulted in the budget control act of 2011. All of which i think had over the longterm positive results for the American Economy. And there are a lot of reasons out there that we have uncertainty in our economy, its not because we refuse to change our some of us went to cheage the debt course were on. Thats not the only thing thats hurting the economy. Dr. Meltser would you isnt it true that the uncertainty of the Obamacare Health care thing is impacting employment and businesses in a rather seg cant way in America Today . Yes, i mean, even the labor unions have indicated that obamacare is hurting the 40hour week as it is. As you pointed out in your opening remarks, a great part of the jobs created are temporary jobs. One of my chern a chef, was feared. Her employer said to her you know, we like your work, we think youre great but youre going to put us over the ceiling so we have to get rid of you so youll well be below the ceiling. Thats just one example. Its happening every day to people in the real world. Last week, the Environmental Protection agency announced dramatic new co2 regulations that have been interpreted to be the death of coal. Does that create uncertainty . It creates cost. And the administration does things that they believe are probably good things to do, but that they increase the power of labor unions. Thats a nono for businessmen. They may be right or wrong but it has an effect on the attitudes they have. I read you the list of things that harvard Business School graduates who are in positions to make these decisions, what they listed. They listed regulation as one of the main things. Uncertainty about tax rates. I mean, all those things are and the poor Education System in the yeats. Those are things which we need to do something about and we dont do it. Dr. Meltser in your long and very distinguished career, do you think that the 1 trillion extraordinary deficits we have been running for the last four or five years are creating Economic Uncertainty . Oh, of course. I mean, there may have been a time in the past when people thought the deficits would be selffinancing in the longer term but that time is long past system of now people see trillion dollar deficits, higher tax rates, higher tax rates that fall on those people who have to invest. Thats whats lacking, thats what was lacking in 1938. The 1940s. Thats whats lacking now. The investment part of the economy, its the slowest part of the economy and to add to that, when they invest, they invest in robot exs, labor saving technologies like computing. The ndy, the uncertainty out there, i know, has some basis in fact. We need to work our way through the difficulties we have without breaching the debt ceiling, without having to extend the c. R. , if at all possible. But sometimes these events provide the only opportunity to get a discussion going and to make changes of a significant nature. We thought we had a real opportunity to fix longterm entitlements in the 2011 budget control act process. It didnt occur. But we did get over 10 years a reduction in the growth of spending, from growing 10 trillion to growing 8 trillion approximately and i think that was longterm positive for the country. Guess this chart is that my chart . His chart up there is Stanford Universitys daily news based Economic Policy uncertainty moving average. If you look to the far right, where we are today, its right at the normal level, at 100 on that chart. Weve had spikes, repeatedly, but it seems to come back down. So weve had some spike and down and speak and down, and its preferable that we reach an agreement and that we make ome compromises. Chairman murray, i would note the president says he wouldnt consider changing one jot or one tittle in his Health Care Law. You can do anything, congress can fail to fund it, hell veto it. He will not accept it. He wont talk about anything to avoid the debt ceiling when in the past weve made his toric reforms leading up to the debt ceiling. It seems to me that the president ought to be leading as dr. Meltser said in helping us to reach an accord on some of these issues where we can make some improvements and Everybody Knows the Health Care Bill is a train wreck. Its not working. Its not going to work. We cant even discuss, have votes in the senate, have our colleagues vote on thousand make it better to deal with some of the problems. Slam the door. Harry reid, the majority leader, none. If theres a problem, i suggest its on both sides. Thank you, senator sessions. The president made it clear he will work with us on the law to make it better but hes not going to repile or not fund et. No he hasnt. Thank you, madam chair. Just for the witnesses, i want to start with a couple of what i think are simple questions, maybe they wont be quite socism but if i could get each of you to answer them quickly, regardless of the magnitude of would a Government Shutdown under current circumstances be harmful to the economy . Yes. Obviously the longer the shut down ensue thegs greater the damage. Yes. Yes. But if you look at the chart that was up there a moment ago you see the uncertainty goes up and comes down again very quickly so if its a short period the damage will be slight, if if its a long period, the damage will be serious. Youve all end kated, again, you can argue about the magnitude of the harm but that a shutdown under current serks would be harmful. It is is threatening a shutdown also harmful . Not very. Dr. Sandy. Yes, i think it adds to the uncertain economic environment and will impede hiring, investment decisions, and it is i call it a corrosive on Economic Growth. And dr. Stone. Its not as harmful, its not as harmful as uncertainty leading up to a debt default, the biggest spike in the chart is the debt discussions in 2011. And just as a shutdown only going on for a little while, most of the damage can be undone. A debt default, you cant undo the damage to the Credit Rating of the United States. But just on Government Shutdown you agree it would be harmful, to some degree, and two of the three of you agree even threatening a shutdown has potential for harm. So let me go to default. Would a default on the federal debt under current serks, regard lofse the magnitude, be harmful to the economy . Dr. Sandy. That would be cataclysmic to the economy and our fiscal sitch education dr. Stone. Absolutely. And dr. Meltser. Of course. But you and i both know that major negotiations never people never repealer that reveal their favorite position until the very end. Let me get to that, actually, as the second part of the question. If a default would be harmful, how about threatening default, threatening default on our debts. Does that have some harm to the economy . Significant negative consequences. I think it already is having an impact. It has had an impact. Dr. Stone. Yes, estimates of economic damage from the 2011 show magnitude of possible taj equivalent to damage for what sequester is doning. Dr. Meltser. As you know better than i, the public doesnt have a high opinion of congress. I do know this. This is just one other example of the malfunctioning of the legislative and would you agree lack of confidence in an institution Like Congress will have a negative impact . Longterm, yes. But if you look at the chart it hasnt appeared yet. I think its reasonable to have debates about lots of things but the one thing we cant debate is we pay our debt on time. This wasest tablied by Alexander Hamilton on day one of the country and its reaped enormous benefits for us. If that becomes questioned in any way it will cost us dearly for yen rations to come. Thats got to be rock solid system of all three of you agree it would have harm on the economy and two of the three of you agree that threatening default has negative economic consequences. The last thing ill ask you is, the abc, is the absence of baunlt deal in congress between the two houses something that has a negative economic effect . Yes. Anything that adds to the uncertain economic environment, and this would qualify trk a weight. Its not something that matters on any given day, week or month but over a period of time, certainly over the four years of the economic recovery, it has added up to real dollars and cents and real jobs and unemployment. Dr. Stone . Its a symptom. Its not showing up in Interest Rates at the moment but its a symptom, its a longer run problem, not an immediate crisis. And dr. Meltser, absence of a budget hurting the economy . Absence of a longterm to return a stable budget path. The Current Crisis is one thing, the longer term problem is a major problem facing the United States. Thats what we should be dealing with. Madam chair, just to conclude, i want to be mindful of the ranking members opening comments and try not to be fenger pointing in my conclusion so let me say it this way, i to not know of a single democratic member of the senate or house who either wants to shut down government or is advocating or threatening a shut coun of government. I do not know of a seungle democratic member of the senate or house who either wants to the fault on americas debt or is advocating or threatening a default on americas debt. And i dont know of a single democratic member of the senate or house who has blocked us from going to a budget conference which weve been trying to go to for six months ago yesterday. Ill yield back. Senator portman . Thank you, madam cheer. Thank you to the madam chair. Thank you to the witnesses. Ive spent the august work period talking to constituents about uncertainty. They talk about obamacare, and the proposal the president has for tax increases, theyre concerned about possible tax increases and of course they talk about new york ohio, morely, about whats going on with the e. P. A. Because of the sub starne rble new costs well have in our state, were a state that depends on coal for eelect tresity. And of course uncertainty about the fed. Are interest doctor what are Interest Rates going to be . Weve seen that with market gyrations. I have another question for you, about something worse than urn certainty, the certainty of something bad. That can also have a negative impact on the economy. I go become to the debt, were asking once again for congress to vote on this debt limit. Much of my leagues on the other side of the aisle think we shouldnt have that vote, there should be an automatic encrease. I would observe when you look back over the last few decades, the only time the congress has made a substantial progress on the debt or deficit, efound one exception, but its come in the context of a debt limit. Senator sessions talked about grammrudman, dr. Meltserp, you were probably there as a meltser, you were probably there as a Senior Member of the team, but this is all that worked. I think about the 1990 deal, that was i was at the white debt then, that was a limit discussion. Its not about negotiating, its about getting the votes for something thats unpopular. Our constituents dont leek us to raise the debt limit. Its leek a credit card to them. Weve overspent on the credit card and what are you going to do about it we have to do something on the underlying problem. Enge its irresponsible for the administration to take this position that were not even going to talk to congress about dealing with raising the debt limit to historic levels. Anyway. It seems to me the uncertain the certainty is as much a problem as the uncertainty and the uncertainty is well find ourselves in the most predictable financial cry sess weve ever faced. If congress were to raise the debt limit without addressing the underlying problem of spend, doing nothing on it which is what a lot of folks are recommending, would that make businesses more or less confident about hiring and investing . Less. What people want, what businessmen want, what intelligent Consumers Want is a longterm return to the growth pattern. A stable growth pattern. That we had say very nicely from 1985 until about 2003 and 2004. We met at he hoover institution, by the way. Oh, yes, nice to seat you again. I want to hear dr. Stone and dr. Sandy on this too, but thats the question were facing here, on the debt limit, are we going to do anything . Its not whether were going to do simpsonbowles, were beyond that now. Were not looking at a grand bar gean but at least a bar fwean or agreement or something on the spending side. It moves you in the right direction. And we are living through the weakest economic recovery since the 1920s if you look at it in terms of g. D. P. Or jobs. I know there are lots of reasons for that that have to do with the Global Economy but one of the reasons in my view is were not addressing this problem. Dr. Sandy, dr. Stone, do you want to address that problem, that question . If we did nothing on spend bug simply extended the debt limit again for a year or two years, would that make businesses more or less interested in investing and creating jobs . I dont think raising the debt ceiling with no conditions attach would be more disruptive than continuing to squabble over it. Thats not the choice i gave you. You do something on spending or not and when you raise the debt limit . Which would be bet for the Business Environment . Raising the debt limit. And not doing anything on spending . If thats the choice, yeah. So you wouldnt see any reductions in spending is appropriate. I thought the choice was you sat at the very table and told Us Health Care are going up 100 . Is that su sustainable. I agree we need to address our longterm fiscal challenges but theyre not the issue right now, the uncertainty around so does s p and when we had the downgrade they said, you guys have to deal with this. They said midterm but theyre concerned about longterm obviously. We have to do something about the underlying problem. They indicated the absence of a midterm deficit Reduction Plan consistent with commeck growth, the current negative outlook is likely to result in a downgrade. A deficit reduction even if the debt ceiling is averted. A deficit Reduction Plan. You didnt give me a debt Reduction Plan you gave me an only cut spending. I said reducing spending. Thats deficit reduction could include increasing revenues. Let me polymark sandy. Tax increases and Government Spending cuts over the last three years have put a substantial doctoring on Economic Growth. We have raised taxes over 600 billion and have another 1 trillion in obamacare. If we dont deal with the spending problem, its not ideology, its math. C. B. O. Talked to us about this. We know that spending as a percent of g. D. P. Continues to go up dramatically and taxes as a percent of g. D. P. Levels off. So anyway, thank you gentlemen. Yield back my time. Senator whitehouse. Thank you. This is a lively hearing with different views being expressed. I have to, i think, push back at the ranking members discussion that Everybody Knows the Health Care Bill is a train wreck. I can assure you that if youre a parent of a child who is coming up on 26 and is eable to stay on your health care and not be out there uncovered, thats no train wreck for you. If youre a parent of a child who has a preexisting condition and you either couldnt get insurance for them or you could never move your job because as soon as you did they would become uninsurable and youd have to make them a ward of the state or spend down to medicaid to do that. For them its no train wreck. Far senior who saved on average over 1,000 by closing up the doughnut hole thats no train wreck for the seniors and frankly, i think that when we get the insurance exchanges up and going, thats just stuff we usually agree on unless you put the name obamacare on it, then its controversial. If you took the name off, we agree on real markets. We agree on real prices in real markets. We agree that the products should be transparent. We agree that you shouldnt get special deals, you should be able to sign up for whats there. Thats what this does. It creates an open, transparent market, you have to post your real price, in which a Small Business can get the same deal as a big business, its not all done in the back room of the insurance company. If you didnt wall that obamacare, everybody in this country would think that was a good idea. I have to dispute the proposition that at least Everybody Knows the Health Care Bill is a train wreck. That was a statement of the democratic chairman of the finance committee who worked with the bill. Hes calling it a train wreck, i would just note that with regard to your view that its moderate reform, harry reid, the majority leader, just recently said this is the beginning of a single payer for health care in america. And its a big deal and the American People do not favor it. Well, im someone who would like to go to single payer, so that comes as no threat. But this is not that. We have now is the veterans. We take the people we care most about, the people who fought for this country and we give them the best we have to offer and its single payer, governmentrun health care. Enge its good you acknowledge that. The president has yet to acknowledge that i dont think theres any shame in a gothrun health care program. I think we give it to our best. Enge its a little unfair to say that we dont want to do anything about the debt when ve put 2 trillion of spending reductions into law. 2 trillion of spend regular ducks into law. And on the other side of the aisle, people are still defending on the revenue side letting Hedge Fund Billionaires pay lower tax rates than brick masons, letting Oil Companies get away with huge multibillion dollar subsidies that they visibly dont need because they the most Profitable Companies in the history of the planet, letting Companies Still get tax benefits for offshoring jobs outside of our country. And letting people at high incomes not contribute into Social Security and medicare the way regular families do. So you know, enge youve got to be a little cautious about saying we dont want to do anything about it. Enge weve given and given and given and given again and find it hard to understand some of the things the republicans wont put on the table. Dr. Stone, you said that, in your testimony, i think weve sort of addressed this, experience in the 2011 debt ceiling crisis suggests that debt ceiling brinksmanship is costly even if a lastminute deal is struck. By that, you mean that once you take the debt ceiling hostage, theres harm in just doing that, you dont actually have to shoot the hostage. Its obviously worse if you shoot the hostage but just taking the debt ceiling hostage is bad, correct . Yes. A hostage crisis creates the problem. And you say also the idea that cutting Government Spending in hopes of stimulating Economic Activity, according to the i. M. F. Socalled, what you called expansionnary austerity is invalid. Cutting spending in a weak economy reduces economic output. Thats your own testimony. Could you put it in light of what were seing in europe where austerity was applied and the fiscal multipliers weve seen recently that show substantial economic expansion beyond just spending. The statement that you quoted is from the International Monetary fund, i was talking about looking how tissue we had a debate a few years ago about whether cutting the budget deficit in the short run would be good for the economic recovery because of claims that uncertainty over the debt was the most important thing rather than weak demand in the economy. And the i. M. F. s reinvestment, maced on the european experience, which was worse than ours, and on our experience, is the expansionnary austerity argument is, i think the technical term would be bunk, i said invalid to be polite in the testimony. In both cases, the problem with Monetary Authority not being able to do very much because Interest Rates are so low and therefore the multipliers are larger in a positive and negative direction. When you cut down spending, the rippling effect through the economy is bigger than in an economy with fuller employment or an economy in which the fed could cut Interest Rates to offset the effects. It was worse in europe but it was bad here. Thank you, madam chair. I am very pleased you are having this hearing and apologize for my tardyness, one of the responsibilities of a firstyear senator is to preside from time to time on the floor and thats what kept me hearing your opening remarks. But a very similar debate at least among the senators was beginning to unfold on the floor of the Senate Earlier today, as i was presiding, and the debate on the continuing funding resolution was beginning. And as i mentioned, im a firstyear senator so i just got off a campaign trail in the last year. And over ked over again during that time in the state of wisconsin about just how hard the people in my state re working to recover from the devastating recession. Deep recession. And how much harder they have to work because of these manufactured fiscal crises. So many working two jobs, so many happy to have gainful employment at all but its not what they were making before the recession hit. And i mean, this incredible grit that im seeing. I wanted to come here and see us and the congress match that grit with a commitment to get out of these situations like the one thats unfolding right now. You know, i think certainty and predictability and responsibility are also American Values that weve got against to and so that backdrop and against the commitment that i made to fight to strengthen the middle class, regrow the middle class, its taken its taken such a battering in recent years, i wonder if you could talk a little bit, if you feel expert enough to talk about how this impacts, this uncertainty, the prospect of a shutdown, the prospect of a default, the continuing weight of the sequester, impacts the middle class perhaps as distinct from he top 1 and the working poor , especially, i just ask that in light of seeing how hard my constituents are working to recover from such a difficult economic situation. Why dont we go from right to left and start with you. Thank you senator. You know, it is hard to see how a compromise could be reached. The president would have to give up tax increase, the tea party would have to give up the end of obamacare. That would be the beginning of a compromise. Thats not so hard to realize. I guess i want to know in terms of the empact of a shutdown or default how it affects especially our struggling middle class. Not terribly, if its short. Dr. Stone . It weakens an economic recovery thats already been weak and is not delivering for the people youre asking about. Just to be specific if the government shuts down, you cant get an f. H. A. Loan, many middle income households are very reliant on the f. H. A. In the current context to get a loan, you cant do that if the government shuts down. Cant get a student loan. Many middle income households are desperately relying on Student Loans to send hair kids to college. Cant do that. Cant get an s. B. A. Loan, a Small Business loan, and many middle americans own Small Businesses, right, in wisconsinmark Small Businesses are key to the middle class. Urts would be disrupted, travel and tourism december makes destinations would be december rupted. In the brand scheme of thing no big deal but in the context of the hardships these folks have been struggling with, it adds up. I think the uncertainty hurts so much in the current context because weve been through the ringer, right . Recession has been debilitating, psychologically, on everybody. And were nervous and were scared an we get spooked by even Little Things system of if we Start Talking about defaulting on the debt, start contemplating the possibly of not making Social Security payments, medicare, medicaid payments, even if its not going to happen, and i cant imagine you would allow that to happen, i cant see that, that hurts, that scares people. Again, you know, they could have been theyve been put through so much. Why go down that path when at the end of the day we know what youre going to have to do youre going to have to raise the debt limit and fund the government. Theres no other option. Thank you very much. I want to thank all of our colleagues who participated today but i especially want to thank our witnesses for your testimony and responses. I cant think of a more important topic and as i said at the outset, we have to end this constant uncertainty and governing by crisis. It really is putting our my at risk and our families and our businesses and our communities as youve outlined. Thank you to all of you for your testimony today. Madam chair, can i ask one questionen a slightly different snudget if you can do it fairly quickly. Dr. Meltzer, we have a chart on federal reserve, youve written about the federal reserve, youve been a student of it for longer than any other person. I notice that their projection, this was in the wall street journal, its something ive looked at with regard to congressional budget office, theyve overestimated growth, here this chart shows that for every single report from the 2011, inning in april of and then they projected an average of. 9 growth for 2013. Each year they had to reduce ownward their projection for 2013 growth and september 18, they came in at 2. 15. Almost half what they had projected. I guess ill ask you two things, the congress are intimidated by the fed and tend to accept everything people tell us we have to accept what they say dont do it. Dont accept everything they say. The constitution gives congress, that is, the right to concern for Monetary Policy. Article 1, section makes you, theyre your agent, youre the presence pal. Well, and, this chart in 2011, april, i mean, they studied the consequences they knew what their policies would be, they knew we were passing a stimulus bill and so forth, but they missed it doctormatically, they missed they were inaccurate. That causes me to wonder if theyre as smart as they pretend to be sometimes. Briefly, i have written for many years, and my president ial address to one of the economic associations is all about the fact, economics is not the science that gives you good quarterly forecasts. There is no such science. We do not know how to do that. Just as weather forecasters dont know how to tell you what the weather will be with great accuracy, doctors cant tell you who will get the flu, economists cant tell you what the next quarter will be with great accuracy. The fed is about as good as nebraska else. But nobody is very good. The average error over time is about equal to the average growth rate. Dr. Sandy, do you want to respond sandy, do you want to respond . No, hes a legend, im not going to respond. Thank you. Additional statements and questions for witnesses from todays hearing are due in by 6 00 p. M. Tomorrow to be submitted to the chief clerk. Thank you to our witnesses. Thank you. [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2013] Senate Budget committee wrapping up. If you missed that hearing, you can watch it in our Video Library at cspan. Org. Senate hearings continue this afternoon. Theyre in session this afternoon. The u. S. House is not. On the floor, as a matter of fact, of the u. S. Senate at this hour, senator ted cruz of texas, hes been speaking for the last two hours and 15 minutes or so talking about federal spending and the defunding of the Health Care Law. Of course the continuing resolution passed by the house last friday and thats the pending legislation before the senate. Senator cruz saying hes expecting to see expecting to speak, quote, as long as i can, and he said he will speak until he cant speak any longer. But the roll call but roll goes on ts out if he long enough it will be the job of the presiding officer to stop him because the senate will start a new day at noon on wednesday. And they need a roll call vote on closing the didebate on continuing resolution at noon or before 1 00 on wednesday. Lots of comments on twitter, you may have seen the hash tag cspan chat. Some of the members of congress tweeting. You can follow them, twitter. Com cspan is where to go. Earlier on capitol hill as the senators were wrapping up their weekly party lunches, Senate Majority leader harry reid announced that a proposal to continue the federal government until november 15 would be introduced tomorrow. The house version goes through december 15. S senator reid the senseless, nonending talk from my republican colleagues about the c. R. And the debt ceiling is really ntoward. It involves two shutdowns, the c. R. And of course the debt ceiling is even worse. Full faith and credit of our country. The United States should pay its bills and they should pay them on time. I want to be very, very clear. Again. The senate will not pass any bill that defunds or delays obamacare. Whether its a c. R. Or the debt ceiling. I will not negotiate on any means or any way on extending the debt ceiling because that deals with paying our bills. Full faith and credit of our country. The last time they took us down this path, it cost the economy billions and billions and billions of dollars. Leading business groups all republican leaning, chamber of commerce, business round table, have said that it would be terfble they keep talking about either one of them and certainly not doing either one of them. Business round table said it would be calamitous, thats pretty descriptionive descriptive. The the best way to stop lurching, lurching on this crisis to the next crisis is to get back funding the government the way the forefathers thought. Through the appropriations process. Ive discussed at great length with chairman mcincludesky and murray about whether theres any possibility of funding the government. They believe there is. Theyve had conversations with some of the republican colleagues, so they believe that a funding measure that runs through november 15 will provide a greater opportunity for Appropriations Bills to pass the senate. I agree with them. So the amendment that i file in the next day or so will prevent a shutdown through november 15. So the only thing were going to change, it appears at this stage, on the c. R. We got from the house is the date. The rest will take well take out. Well take all the rest of the stuff. There are a few anomlies that are noncontroversial. Well change those a little bit. But other than that, were going to strip out the obamacare language, the chinafirst language, well get rid of that. I repeat, there have been signs from the republicans that theres an opportunity to Work Together in this process and i hope it will bear fruit in the coming weeks. But one thing is very clear. There are a number of Senate Republicans who recognize the Tea Party Agenda is wrong for the country, wrong for pair theart. So i for their party. I hope these Reasonable Republicans will prevail upon their colleagues in the next few days so that we do not have to shut down the government. You know who pays the price. [inaudible] go by all the time involved. Well finish sometime on sunday. [inaudible] ive said on the floor today in my statement i gave on the floor that if they want to collapse the time, fine. But i want everyone, as i said on the floor, to be very clear. Theres no filibuster going on now. People can come and talk but they cant do anything to change when we vote. On the next vote. So if they want to collapse the time, i hope they have a successful caucus and say, were wasting a lot of time, lets get down to action. Because, you know, the other thing that should be a concern to everyone, if we finish this on sunday, send it back to the house, you know, the house talked about changing it again. And that is a surefired way to shut down the government. So im waiting to see what they have to say. If they want to collapse the time, fine. Maybe it will give time for us to give the bill back a little earlier. Well see. [inaudible] i dont want to be talk like a College Professor here, but, listen, it doesnt matter what that top number is. Lets say were 100 trillion. It doesnt matter. Because the only thing that matters is january and the sequester. Thats what its all about. The 988 billion, we take that because nothing is that consequential until we have sequester, which kicks in automatically in january. [inaudible] theres been some talk from your colleague that either he wants to try and offer that amendment that he tried to offer in the energy bill or that the house, that might be one of the things the house is putting back in if they get it back [inaudible] this is kind of interesting. Were not afraid to vote on his amendment. He had an opportunity under the Energy Efficiency bill. But obviously it got us nothing because they did not want that bill to pass. As you remember, they had that amendment, another nongermane amendment, another nongermane. They were up to five nongermane amendments. And 40 energy amendments. So, he can keep pushing this, maybe it will help him get governor which in my mind wouldnt be a bad deal, if you know what i mean. Your colleague said if they wanted the number, the c. R. Number, 1558, you should send it back to the house at that level. It doesnt matter. Its sequestration that matters. That does not matter. Lets not have 1058. Lets have it a trillion. And another trillion. It doesnt matter. Sequestration is where the problem is. [inaudible] im sure that none of you do to time like i watch the news hour. And last night they had a really good piece about obamacare and about Small Businesses and after watching that, it only made me feel more strongly about how important this is for obamacare for Small Businesses, for people without insurance, for people with insurance. So, i think that obamacare is the right thing for the country and its going to where people are accepting this. As you know, as i talked about on the floor this morning, the numbers are really pretty good for obamacare. Nd thats an understatement. And once exchanges kick in, it will be just like medicare. People complained about medicare in the early 1960s. But not for long. Because once it came into effect, people understood how it worked. As you know were moving forward to not only invoke cloture motion to proceed to the housepassed bill that defunds obamacare, that does not raise taxes, and that respects the topline from the budget control act. Cloture will be invoked on the bill. I will be supporting that and i think other members of our conference will. And we think basically the house has sent us is what we wanted. A bill that honored the top line from the budget control act, that didnt raise taxes nd defunded obamacare. So what happened after cloture is achieved on the underlying continuing resolution . Senator reid has set up his redstate democrats to vote once again to Fund Obamacare or to decide they were for it before they were against it and o vote no. So, i think the focus needs to be on why isnt it that we cant get redstate democrats who can read the newspaper, watch the television, read the internet, just like we can, which shows that obamacare has been a dismal failure . You like what you have, you cant keep it. Rather than see premiums go down on an average of 2,500, theyve gone up 2,400 for the average family of four. And this is the very reason why organized labor and other ardent advocates of obamacare are now asking the president and his party for relief. So, i think the focus once clotures achieved on the underlying bill to deFund Obamacare, which will have a strong vote on, the question ought to be, why cant redstate democrats listen to their own constituents and give them and the rest of the country some relief from this bill that is obviously not performing as advertised . Obamacare and the president s Energy Policies really are a onetwo gut punch to the American Economy and the middle class families. I want to talk a little bit about energy. Last week the president announced a policy that is essentially an energy tax on american consumers. When youve got an economy where we have the lowest participation rate, Labor Participation rate, over the last 35 years, and you have takehome pay, average Household Income has gone down by almost 4,000 since the president took office, and 60 of the jobs created here so far are parttime jobs, you have a pretty weak and sluggish economy. Thats why when the president keeps piling on in the form of obama mandates and requirements and now a new National Energy tax, it will hit middle class americans and families squarely in the gut and thats the last thing that we need right now. We need policies that will get people back to work, that will increase the takehome pay for middle class families across this country, and will get this economy growing again. And you can do that by permanently delaying or repealing obamacare. You can do that by passing the Keystone Pipeline which is something thats been hanging around here for a long time and according to the president s own state department would create 42,000 jobs immediately. And you can do it by killing, stopping this National Energy tax which the president s trying to put on our American Economy. The American Economy, the american middle class family needs a break from obamas olicies. There was a picture of a one of the papers this morning talked about obamacare and said one blow after another and had a little picture of a pill bottle there and it said promises and reality. And so many of the promises that the president made are just not coming true for the American People. So this afternoon in new york city, the president is going to e the warmup act for his ambassador, if you will, or his secretary of explaining things, bill clinton. So the two of them are going to be trying to explain away all of the problems of the Health Care Law. And im calling on president clinton to actually be honest and apologize to the people who are being hurt by the Health Care Law. That so many people who had parttime jobs, who have had their hours cut, so many spouses who have lost, who have received insurance through work, who are now going to be cut off of their insurance policies, also the young people who are being asked to pay a lot more for Health Insurance. In many cases insurance, they dont need, they dont want, they cant afford, even with the subsidies, theyre not going to be able to afford them. But theyre being forced to do that. And also apologize to the Union Members who believe thed president when he said, if you like what you have, you can keep it and your insurance rates will come down. None of these things have come true. So im hoping with both president s together, they level with the American People and apologize for the damage heyve caused. Senator cruz argues that what he is doing is fighting for a very powerful, vocal part of your party and that effectively hes saying the fact that you are not standing with him means that its washington business as usual. Does he have a point . Are you worried about retribution, especially the two of you who are up for reelection this primary calendar . I think we would be hardpressed to explain why were opposed to a bill we were in favor of. Invoking cloture on a bill that defunds obamacare, it doesnt raise taxes and respects the budget control act, it strikes me as a nobrainer. And so im not reluctant to explain voting for things that im for. Thats the way i see it. And im hopeful that a majority of the republican conference will see it the same way. Does he just not get it . The flipside of that, may i ask you, do you think i can only speak for myself. Senator reid just said he would like to extend the until november 15. As opposed to december 15. What do you think about that . Is that something youll support . I think thats something for the majority leader and the speaker to work out as to what is the appropriate time for this extension. It would basically have to be acceptable to the house and senate. Republicans, as far as in this particular case maybe you dont control all of them, but will republicans yield back some time so that this gets done sooner than sunday night over here . I can speak for myself. S any one senator can object to any effort to shorten the process, my own view is it would be to the advantage of our colleagues in the house or in the majority to shorten the process. And if the majority leader were to ask us to shorten the process, i would not object. I dont know who else in the conference may feel differently. But i do know, but i do know that if the house doesnt get what we send over there until monday, theyre in a pretty tough spot. And my own view is the house, having passed a bill that i really like and intend to support, i hate to put them in tough spot. Below the sequester level [inaudible] is that an important victory for conservatives to i would prefer the 967 level. But heres the way the house looks at it. They view the c. R. As an extension of the current rate of spending. The current rate. And the budget control act controls what the top line will be for the next fiscal year. And if that numbers not achieved, we will fall back to 967 billion at the end of the year. My personal preference would be to stay at 967 billion, but theyre right when they say the law is going to push us back to that anyway at the end of the year. Thanks a lot, everybody. Can i get reaction to the talks . [captioning performed by national captioning institute] [captions Copyright National able satellite corp. 2013] Senate Republican leaders from about two hours or so ago talking about the debate over federal spending. The continuing resolution. And defunding the Health Care Law. And on the senate floor, about an hour and 45 minutes ago, senator ted cruz began speaking in opposition to the socalled obamacare. This is ahead of tomorrows vote on the motion to end debate on the motion to proceed to that housepassed bill. Senator cruz has been on the floor along with senators lee from utah and senator visiter from louisiana. And of course you can follow live, continuous coverage, on our companion network, cspan2. Senator and his office have been tweeting about the speech on the floor this afternoon. Other senators, too. Ted cruz, most americans could not give a flying flip about a bunch of washington politicians. Meanwhile in new york today, the u. N. General Assembly Meeting with speeches from leaders of many nations. Including the opening of the u. N. General assembly today. The leader of the u. N. , the secretary general, bang kim moon, calling the situation in syria, quote, the biggest security crisis in the world. Heres some of what he had to say. The crisis in syria over 100,000 people have been killed. Well over 70 Million People have fled their homes. Prime minister under siege, cities and towns lie in rubble. The economy is in ruins. Communities once alive with traditions and faith have been orn apart. The region has been dangerously destabilized. Weve seen the worst chemical attack on civilians in up to a century. A lot of generation of young people now fill refugee camps. O among us can say that they and their mothers and fathers abandoned by el the International Community . The Syrian Government must fully honor the obligations it. As assumed the International Community must bring to justice the use of chemical weapons in syria, confront un [inaudible] u. N. Investigation mission. International Community Must safeguarding an destruction of syrias chemical weapons stockpiles and programs. But we can hardly be satisfied with the destroying of chemical weapons while [inaudible] are still destroying syria. The vast majority of the killing and atrocities have been carried out with conventional weapons. I appeal to all states to stop fueling the bloodshed and to end the arms flows to all the parties. I look for the imminent adoption of an enforceable and binding Security Council resolution on chemical weapons. This should be followed action. Ely by u. N. Human rights monitors could play a useful role in reporting and deterring further violations. I call on the Syrian Government and the opposition to uphold the obligations on the International Humanitarian and uman rights law. [inaudible] end the unconscionable targeting of medical facilities and personnel. They must release the thousands f men and women and children whose detention has no basis in International Law. Full accountability for Serious International crimes is also vital. [inaudible] or by other means consistent with International Law. The response to the heinous use of chemical weapons has created diplomatic moment ummomentum. The first signs of unity diplomatic momentum. The first signs of unity in far too long. Now we must build on it to get the parties to the negotiating table. I have been consistently saying that military victory is an illusion. The only answer is a political settlement. I appeal to the government of syria and the opposition and excellencies, i appeal to all , with this hall influence over them to make geneva 2 conference happen as soon as possible. It is time to end the killing and to reach the peace the yrian people need and deserve. Ladies and gentlemen, excellencies, lifting our side from syria, we can see tremendous success and upheaval across the region. [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2013] part of the u. N. General assembly the secretary generals speech from earlier today. Coming up at 5 00 eastern, well bring you iranian president row hanny, hell be talking to the rouhani, hell be talking to the General Assembly at 5 00 p. M. Eastern. Senior officials are saying that or the president , president obama and the iranian president will not meet while both leaders are at the United Nations. The a. P. Says the Officials Say a meeting proved to be too complicated for the iranians but they say work is under way at the staff level to resolve an impasse over Irans Nuclear program. U. S. And iranian leaders have not met in 36 years. Again, live coverage of the iranian president s speech coming up at 5 00 p. M. Here on cspan. Earlier today in washington, the administrator for the center for medicare and Medicaid Services spoke about the agencys roles in the role in the implementation of the new Health Care Law which begins exchanges a week from today, october 1. This is 15 minutes. Good morning. First of all, i would like to say thank you to karen and to each of you for several things. As i was telling karen earlier, i went into work sunday because i was actually having problems with my blackberry and some sinknyization, so that should really make you feel good about the exchanges in the marketplace. [laughter] it reminded me that i can still be brought to my knees by a malfunctioning blackberry. So i went in to get that straight and im sitting there looking through the week and realized with actually a great sigh of relief that we were at that time, 10 days or so, from the opening of the exchanges of the marketplace. Today, this morning, i continue to be calm because i realize were one week from the opening and i am so ready to quit talking about are we ready and switch to, here are the things that we need to resolve, heres the mitigation strategies, heres what were doing to identifying and correct a problem. We would not be where we are today without each of you in this room. Because many of you have been silent partners, many of you have been alpha partners. I just want to say again, a heartfelt thanks. It is a very exciting time and i try to remember that were going from talking about how insurance works or how hospital coverage works to how do you get individuals signed up for Health Insurance . How do you help individuals who before were either embarrassed to ask or couldnt afford Health Insurance . And now many of you are going to be out there leading the way on helping those people get beyond their embarrassment and helping them understand if theyre eligible for help and how to go about getting that help. So no matter how bumpy the course, what a great statement about us and each of us and our willingness to help people get things done. I looked at the agenda today. Very impressive. I mean, you all are doing started sunday, go through the week, a a lot of work. And there are a lot of my coworkers who i hope will contribute to that. I know john is speaking, i know on oolittle has a piece fraud. Melanie is talking about duals. Cindy talking about medicaid. And then we have several subject Matter Experts who are either part of panels or are doing some individual work. And that is another thing that i want to say thank you for. When i was in the private sector, we always thought of c. M. S. As someone very far away who handled reimbursement and hopefully when they called on you, it was not a bad thing. And now what were seeing is active partnerships where were reaching out to you all, you all are reaching us out to. Are reaching out to us. Were trying to make rational, if you will, a system thats been very complicated for a very long time. And i think most of us realize this doesnt happen overnight. We didnt get here in a year or two. It will take more than a year or two to get where we all want to go. But i think wed all agree that changes need to be made. We may disagree on how those changes are made, but i think we would all agree that theyre critical. The way i like to describe what were doing is kind of a threelegged stool. Folks are always asking me, does c. M. S. Have a Strategic Plan . Indeed we do. And the Strategic Plan is really built around the threelegged stool. Which i will call access, cost and quality. Theyre not unfamiliar terms. Those of you who have heard and over used over and over again but what does it really mean . The way we look at Cost Containment is really through a myriad of paths. But ill try to talk about two or three. Obviously there are ways you can approach lowering costs that none of us are crazy about which is you can start by making cuts or lowering the payments. And certainly we have done some of that. Through our own work weve done some of that, through laws passed by congress, signed by the president. Thats probably my least favorite way to go about it. But sometimes its necessary and sometimes we were overpaying for services. The second way, the way that i much prefer, is realigning incentives. And i know that beginning with ken and others, this whole agenda is really about realigning or aligning incentives so that not only can we look at i think we all understand that costs are going to continue to increase and the number of beneficiaries, especially medicare and with medicaid expansion, are going to continue to increase. How do we look at this on a cost trend, on a probeneficiary, and how do we look at the results . So the way i like to think about aligning or realigning incentives starts with sharing data. And i think c. M. S. Still has work to do on that area. And im the first to say that. While weve begun to share some data, i think the work that we do with pioneer a. C. O. s, among others, has taught us that we have much work ahead. Much systems changes under way in order to have timely data, not only timely in terms of historical but timely in terms of release. And also how do we go about releasing that data at a price individuals can afford . And in a way that still protects the identity in some cases for the consumer. So we have work under way there. And then once we figure out how we release it, how do we share it . The second area where many of you have done a great deal of work has been around consumer engagement. I personally believe that until individuals understand what theyre buying and why theyre buying it, they cannot help be active consumers in this cost, quality scenario, if you will. I also believe strongly in the multipair approach. Multipayer approach. Some of you have been working with us on some of the Innovation Center work around the multipayer approach, where weve just kind of hit the tip of the iceberg, if you will, with seven or eight markets. We have much more work to do and were looking at some of the work around the state innovation projects to give us a better glimpse, if you will, or more data as it results to the multipayer approach. I think we all would agree that we need to get more value for the dollars we spend. Even if we can agree that the cost of health care is worth it, i think we would all struggle with, well, if the cost of health care is worth it in the United States, then why isnt our quality number one or number two in the world . So i think wed agree that if the cost is going to be this high, our quality has to match it. And a lot of the work youll see is focused in that area and we want to work with the private sector. Not only do we want to work with the private sector, we work with the private sector every day. If you look at Medicare Advantage, if you look at part d, if you look at medicaid manage care, we are your partner for better or worse, you are our partner for better or worse, in almost everything we do. So to the extent that we match incentives or at least we understand incentives and quality measures, we will obviously take down the burden and also have a better product overall. Fraud is another area where weve worked together in a publicprivate way and we have a lot more work to do. And i always thought that when i was a hospital c. E. O. , i understood how prevalent fraud was in the industry. I had no clue. Until i went to work at c. M. S. , how prevalent fraud is in the industry. And how much work we all have to do. So i think thats how i look at it from the Cost Containment side. From the Quality Improvement side, i think some of the work weve done with partnership for patients, some of the work that were doing with a. C. O. s, bundle care delivery, but we have much more work to do and part of the reason that we just recently sent out the r. F. I. And we are in the process of reviewing the second round of innovation grants is we realize, while weve done a lot of work around Medicare Part a, if you will, theres a tremendous amount of work to do in the part b space. And the postacute care space and the Home Delivery space, where we know not only do we want the area to grow, because we obviously would prefer home and communitybased settings over institutional settings, but where the opportunity of fraud and overpayment and abuse also will become common and we need to stay focused on that. The last area ill talk about is Quality Improvement. And when i talk about Quality Improvement, the partnership r patients is one way, the hospitalvalue based, the purchases we began last fall, the second way, the readmission penalty, if you will. Not everyone grease these are the greatest measures agrees these are the greatest measures and no one likes negative measures but theyre historic on the work we have ahead. And id also make the argument that it is impossible to separate quality and Cost Containment. It is impossible to separate innovation and quality and part of the reason that it became a natural natural to move Patrick Conaway in as director to c. M. I. , is we realize a couple of things inside c. M. S. As weve gone along. First, a, patricks fantastic. Second, that quality and inowe innovation, if you tie them together on the front end, it saves a whole lot of rework on the back end. The second thing is, what we really need inside the Innovation Center are the tools that measure, evaluate to make sure that we are doing the right work and were getting the right results. And many times we already have the expertise and what ill call traditional c. M. S. Or traditional medicare, so we can loan the expertise about new models but we really needed the work to go on around the research, around the evaluation and the tools. Because this will become the measures that we will share with congress, share with the secretary, and decide what to move forward in meaningful ways. And then the last area that i want to talk about is access. And it would be hard for me to stand up here today and say that im not really excited about october 1, because i am really, really excited about october 1. And sometimes we get so caught up in the d. C. Dialogue, we forget, but i want to give you a couple of reallife examples. I think if all of us can go back to reallife examples, were a lot better off. Last week i went to talk to the Greater Philadelphia Chamber of commerce. And so these were a lot of Small Businesses. And so i started talking about individual enrollment and shop and it became obvious to me that even though we spent the last 3 1 2 years talking about shop, we really still had a lot of confusion around Small Business and what Small Business needed to understand. So what i was seeing is not a negative reaction to shop, but can you help me understand if my business qualifies for credits, if what im doing is the right thing . And this is where i think so many in the industry, from agents and brokers on down, can be so helpful to us, as we go forward with shop. Yesterday i was in florida with blue cross of florida. Looking at their Retail Center. And they obviously will use the Retail Center to sign individuals up for coverage, which makes me very excited. But what was even more exciting is seeing the work thats going on in Medicare Advantage, the work thats going on in terms of community education, it really was the complete package. And i think thats what all of us are moving to, is this complete package of how do get get the individual engaged, how do we help them understand whats important to them . Yes, were using many methods to do that next week. And next week is just the beginning. Yesterday or i think it was yesterday, i saw 100 days to the launch. Well, im going, 100 days, its seven days. But really it is 100 days until the coverage actually begins. Its seven days until we actually people with start to enroll people can start to enroll. So well continue work on this throughout the next six months. So everything from the website to the call center to counselors who trained inside hospitals, to folks who are trained inside Insurance Companies or other venues, from federally qualified Health Centers to health departments, to social services, everyone is going to be learning this as we go forward. Everyone from the navigators who have grants and training, on down to the individual such as you or i who are helping a friend sign up or a neighbor sign up. Were all going to make a difference. And it will take a while for us to get there. Some of the greatest questions i get are, well, did we go from four insurers in one market to 40 . No, we didnt. Thats not overnight. Each of you will know that. Youve been in the industry a long time. But what we are seeing is more transparency, more data, more interest in entering markets, and individuals asking a lot of questions. And to me thats what its all about. Youre learning as you go. Youre learning how to sign up. And youre learning how to make the best decisions for you or your family or your business. So again, ill just end by saying, thank you for what youre doing. I look forward to being in the states over the next several months. And getting to know, maybe seeing your product at an individual level or at a market level, and getting to work more closely with each of you. I will say that youve been a marvelous partner. We would not be where we are today without your help and i know that and im very appreciative. So thank you. [applause] [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2013] meanwhile in new york city, the u. N. General assembly is meeting in about 25 minutes. We plan to take you live to hear from iranian president Hasan Rouhani who will be addressing the General Assembly. News reports this afternoon indicate president obama and the iranian president will not meet. While both leaders are at the United Nations, Officials Saying that a meeting proved to be too complicated for the iranians. But they say that work is under way at the staff level to resolve an impasse over Irans Nuclear program. The u. S. And iranian leaders have not met in 36 years. So live coverage of the iranian president s speech at 5 00 p. M. Eastern. In the meantime, well take you back to that conference for the discussion on medicare and the Health Care Law, the state exchanges. Signups for that begin next tuesday. The first. This discussion runs about 50 minutes. We will show you as much of this as we can until we go live to the United Nations. Good morning. I really want to thank you for the opportunity. I think this time of year and this conference really is a really great time for us to take stock. Particularly with the Medicare Program. The part c and part d programs. And one of the things that i want to do today is to really talk about the status of the Medicare Programs, the trends that were seeing, and the data of sort of the work thats been going on by us and the plan community, the provider communities. Theres really a phenomenal story thats happening within the Medicare Program right now. That i want to sort of demonstrate through data and through trend anal sills. I want to make really the point that we have a much different Medicare Program today than we did three or four years ago. There is growing evidence that it is possible to both elevate the quality of care, grow the programs, add benefits to the programs, and also reduce the total cost of care per capita cost being the best measure. Prior to the med Affordable Care act going into place, many people thought those three things, happening at the same time, to add benefits to medicare, to elevate the total call the of questionnaire toe cal quality of care, and to reduce the toe kl toe cal cost were not possible. There was a fundamental discussion about that you have to trade one out for the other. And i want to make the case, with data today and really kind of see as the part c and part d program, as really primary examples of this, to show that it is possible to do all three things at the same time. We are seeing a different Medicare Program today than we saw, than we had three or four years ago. The benefits are better, there are signs across the board, particularly with the fivestar system, the quality of care is better. And the total cost is coming down. I also want to point out some of the kind of data that were seeing that ive been summarying sharing with many other audiences the past three or four months or so, really to show what were seeing in our data and giving some kind of illustrations, you know, why c. M. S. Is going in a certain direction and what the sort of future world may be. But really i want to kind of make a case for optimism, for a different Medicare Program that is better serving Medicare Beneficiaries. I think its a credit to folks here in this room, a credit to our physician partners, credit to our hospital partners, credit to all providers, credit to our beneficiary stakeholder groups, but there is a fundamental change that ill ry and build a case for today. So as c. M. S. Has put out our files on the part c and part d landscapes, and trying to make a couple points, i want to highlight, but i think this really kind of illustrates the points i started off with. Today overall in the part c and part d program, virtually every Medicare Beneficiary across the country will continue to have access to a Medicare Advantage plan. All Medicare Beneficiaries will have access to part d plans. We have not seen the changes in access that some have speculated would happen post the Affordable Care act. Premiums for both part c and part d are also stable on average across the country. When you compare the average premiums that will be in effect for 2014, on average, and dollar terms, they are lower than before when the Affordable Care act was put into place. So, for a beneficiary perspective, despite predictions, despite those that said this wasnt possible, the average premium thats being offered to Medicare Beneficiaries in dollar terms is lower than it was prior to the Affordable Care act going into place. Ill show some data in a second. But beneficiary takeup and Medicare Advantage products is t an alltime high in terms of People Perspective and also percentage perspectives. C. M. S. Projects and we have a very good track record that total growth during 2014 will be 5 . And we have not seen significant changes in the degree of Supplemental Benefits being offered through part c 2014. 2012, 2013, and so, access continues to be strong, premiums are lower than they were prior to the Affordable Care act going into place. Enrollment at an alltime high. C. M. S. Projects 5 growth. No changes in Supplemental Benefits. The part d benefit is better, more rich, with the closing of the doughnut hole. Part d premiums havent changed. So this is a story to us that describes optimism, that describes that it is possible to add benefits, elevate the quality that ill talk about in a second, without lowering and lowering the cost of care. So who would have thought three or four years ago that all of this was possible . It is possible. And there are growing signs that we can build better benefits, elevate the quality and lower the total cost of care. This is the trend in Beneficiary Participation and m. A. Program over the last i guess eight or nine years or so. The little line is projected what c. M. S. Projected before the landscapes were released. The red line is the actual enrollment. As you can see, since 2007, there has been a steady increase in the percent of Medicare Beneficiaries going into m. A. Plans. And when this trend really took off in the last couple of years, we speculated and said, well, maybe its the youngest beneficiaries, those who are just turning 65, who are going into the program. But when you look across the board, really the demographic character statistics of beneficiaries who are going into m. A. Plans, who are joining the program at a faster rate than the overall growth of the Medicare Program, dont fall to that necessarily turning 65 category. Really the age could he horts across the m. A. Populations and the fee for service populations is pretty consistent, which tells us there is a general secular trend in more Medicare Beneficiaries going into the m. A. Program. You can see in the last four or five years, we have been pretty spoton in our projections for growth compared to the actual growth. Which is why i feel very confident in saying that, you know, kind of based upon the bid analysis that c. M. S. Projects, 5 growth in the part c program, and i feel very confident in saying that we expect the Overall Program to grow 5 over 2014 across the country. Thats faster than the overall growth in the Medicare Program. So, this really is a phenomenal story. But also really kind of illustrates that the program has grown, an alltime high both in terms of people and percent of the medicare population and we expect that trend to continue to grow during 2014. What i think is the most surprising and the most pleasing news to c. M. S. And i think to all of us in this room, and i think its a tremendous credit to changes in focus, changes in perspective, changes in overall sort of how we think about the m. A. Program, is we have seen a steady but dramatic increase in the number of plans and the number of beneficiaries who are in our for or fivestar plans. Really this is our greatest measure. I think its our most sophisticated valuebased purchasing program that we have. And due to both the payment changes and i think due to our overall kind of framework and i think due to our collective mission to improve the overall care provided to Medicare Beneficiaries, we have seen a dramatic increase in the number of Medicare Beneficiaries who are in the m. A. Program, who are in a fourstar, fivestar plan. In 2009, before the changes were in effect, we had about 16 of the m. A. Population who were in fourstar, fivestar plans, that grew steadily. So today, 37 of Medicare Beneficiaries who are in fourstar, fivestar plans and i think most surprising and really the punch of our landscape relief is the fact that more than half of all Medicare Beneficiaries that are in the m. A. Plan are in a fourstar or fivestar plan. And think about what that means. It means, think about what that means to our beneficiaries. This means a couple things. One, it means that plans have really dedicated themselves to quality, to Quality Improvements, and have put in place the programs, the physician contracts to make the change from being a twostar, threestar plan to being a fourstar, fivestar plan. Ive said in various forums that my dad is in a fourstar plan and i feel very confident and very comfortable that he is receiving the best possible care from his plan. So when i think about a fourstar, fivestar plan, what that means, it means that i feel comfortable giving my father the recommendation to be in a plan thats fourstar, fivestar. But more than half of Medicare Beneficiaries in 2014 will be in a fourstar, fivestar plan. Thats coming both from the plans elevating the scale but beneficiaries making active switches from twostar, threestar plans to fourstar or fivestar plans. Again, c. M. S. This year will be helping to encourage beneficiaries, particularly those that are in lowperforming plans, to make the change to go to a higher performing plan. But this is a phenomenal achievement. Again, it really demonstrates this notion that we dont have to trade off quality for cost. We dont have to trade off Quality Improvement for added new benefits. These things go together. Theres growing evidence that we can achieve the threepart aim and across the Medicare Program, quality is improving at all our different systems where were operating, kind of valuebased incentives being a. C. O. s, valuebaseding at our hospitals. But i think the m. A. Program best illustrates the opportunities and the potential to drive Quality Improvement. Which i think is a phenomenal achievement. Tremendous credit to everyone here in this room. In addition to Quality Improvement, as folks in this audience know, c. M. S. Has placed tremendous emphasis and tremendous focus on compliance. And this is a hard chart to read, i know, and i think this has been shared in some context. But i want to really kind of talk through what this chart says to me. And what it means for future c. M. S. Policy direction. So, last year, in 2012, c. M. S. 40 in place a program to do compliance audits. And to really stratify those audits based upon different plans operating systems, much to the chagrin of the fivestar plans, what we called kind of bestpractice compliance reviews for our topperforming plans. Really with the notion that c. M. S. Believes that every plan over the course of a period of time should go through a compliance audit. We should really kind of focus our Compliance Resources over time on those plans that are most at risk. But really its going to the notion that all plans going through this process should be subject to some kind of review. And i had gone through this process with the notion that over time c. M. S. May want to shift its Compliance Resources toward those plans that have the kind of greatest risk, plans who are operating at a higher overall quality score level, fourstar, fivestar really should have less compliance review. But i think this chart, this graphic really causes us to pause, to think through how we should think about compliance together throughout the next several years. So what this chart says to me is that when you stratify the compliance score with a higher score being bad and a lower score being good, if you compare it to a plan star 2011 star rating, this chart compared to the 2012 audit score, we dont see the natural relationship that id hope for that says, when a plan does better on the quality star rating system, they also do lower on the audit score. Really . Theres not much relationship that we see, to be sure, the fivestar plans have an overall lower audit score than the non fivestar plans. But we dont yet see the relationship between quality star rating and compliance scores. So i think over time were very much hopeful to achieve that relationship, to see that relationship that a plans quality score would indicate how they fare or how they predict overall kind of audit compliance perspective. But today that relationships not there which tells us that we have to continue with the pathway and the strategy to focus on all plans during the course of the years, and really with the notion that all plans, whether they be twostar plan, threestar plans, fourstar plans or even our Top Performing fivestars plans continue to have compliance issues with a couple of key areas that ill talk about in a second. But this data tells us, this chart tells us that c. M. S. s Compliance Strategy should continue, needs to continue, but i was personally hopeful to see that relationship between star rating and overall audit score, that its not yet there. Were still hopeful that it comes to be over time. But given this analysis, given this trend, we want to move forward with a very similar strategy to our compliance audits as c. M. S. Has followed over the past year or two. When you break down what are the major areas that were still continuing to see that all plans need to continue to focus on throughout the course of the year, kind of three kind of large themes continue to surface and this is analysis for the 40 plans that went through compliance audits. What were those areas of concern that triggered the immediate corrective action plan for c. M. S. . Really the notion that somebody needs to change very quickly because there is the potential beneficiary concern. And again, consistent with past years, the areas that continue to flag the correction action plan is how plans implement their part deformularies, do they offer the same transition policies that theyre required to, consistent with the law. And just, you know, big area for continued focus, continued improvements on part d transition issues, part d formulary issues. But all plans, the top plans or lower quality plans, seem too to be having struggles with the appeals processes, the coverage processes, both on the part c and the part d side. So Going Forward, this will be really i think part and parcel to our strategy, to ensure beneficiaries who are choosing part c and part d plans, to make sure that theyre getting the benefits theyre entitled to, but were continuing to see ontinued areas of concern, regarding how plans determined coverage policies, how they adjudicate the appeals process, and the continuing need for focus Going Forward. So really when you break down the areas of foremost beneficiary concern, these are the three areas. And they will continue to be of focus for c. M. S. But really to our analysis, all plans have concerns to all three of these areas and they will continue to be a focus for c. M. S. Audit compliance Going Forward for the next calendar year. But again, we are trying our best to tell a story of optimism, to tell a story of growth. And i want to shift topics just a little bit right now and kind of take a step back from the part c and part d programs, Medicare Advantage and the part d programs, and talk about the overall Medicare Program for a second. And one of the reasons why ied to show this slide is why i wanted to show this slide is because in a couple of conversations weve had with the plan community, both in kind of large group forums but also in, you know, kind of small group forums, many plans have come to us at all Different Levels of the organization. We are your solution to your cost challenge. So we are, you know, c. M. S. Should think of the plan, should think of the m. A. Plans particularly as your solutions to longterm challenges, to the Medicare Program. And going back to my opening comments, we have seen a much different trend rate for the overall Medicare Program than i think anyone would have believed four or five years ago. So i think the best possible measure for us to focus on, for us to think about, and analyzing medicare costs, is the growth in per capita cost. We in this room cant change the number of Medicare Beneficiaries coming into the program. Thats demographics, thats the baby boom generation coming into the Medicare Program, and c. M. S. And no one in this room here can control those changes happening in our country, that will continue to drive the overall cost to the Medicare Program. But we can focus on those strategies, those programs per capita cost growth. And one of the key metrics that c. M. S. Has been watching very carefully over the past three or four years to really validate the overall strategies that were put in place by the Affordable Care act is the change in per capita cost growth. This is a chart that our act wears put together actuaries put together to illustrate the trend line in per capita cost growth for part a, part b, part c and part d costs compared to c. P. I. Medical cost growth. You can see theres been a downward trend overall since 2001, huge spikes from the part d benefit went into effect. The last four or five years ago, theres something fundamentally going on with the Medicare Program that is demonstrating that were operating in a whole new environment. And i think theres a lot of speculation right now in the press about what is causing the slowdown. But i think for the Medicare Program, and ill talk more about this in a second, that i dont personally believe that as the economy thats driving the overall slowdown in per capita cost growth. There is something fundamentally happening thats changing the cost projection. Some of that caused by direct payment changes in law. But were also seeing signs of a different care Delivery System that ill talk about in a second, that is driving these changes. And so when various plans have come to us and said, where are the solutions . C. M. S. Needs to think about solutions for longterm cost growth, i wanted to kind of put this chart out just to say, heres the macropicture for part a, part b, part c, part d, per capita cost growth. And we see a fundamental change n costs compared to previous years. Asked our actuaries, ok, lets decompose that growth. And lets really try and decompose what is driving the different the current changes that were seeing in growth. And so this is what breaks down per capita growth for part a, part b, fee for service physician, outpatient, drugs, dialysis, what have you, part c, the managed care side of medicare, and part d. I think theres a couple of things that i think are interesting in this chart. I think it better illustrates whats driving the slowdown in medicare costs. The first takeaway that i take from this graph, and all this can have different takeaways, but my personal takeaway is the economy for the Medicare Program isnt driving the slowdown in overall per capita cost growth. So if it were true that the economy was driving the slowdown, those things that are more discretionary for Medicare Beneficiaries, part b expenses, physician, outpatient, the things that beneficiaries really have more daytoday discretion on, for how they kind of interact with the Health Care System, part b spends, while lower than previous years, really is not driving the overall slowdown. We are seeing dramatic reduction on the Feefor Service side on